Euro Area Economic Outlook
GDP growth is set to hit a three-year high in 2025 before stabilizing in 2026; declining inflation and tight labor market conditions should support private consumption growth. Still, fixed investment and exports will be capped by U.S. tariffs, leaving 2026 GDP growth below all other regions. Germany’s fiscal stimulus is a key factor to watch.
Euro Area Inflation
In September, harmonized consumer prices rose by 2.2%, up from 2.0% the previous month, marking a seven-month high and surpassing the ECB’s 2.0% target. Inflation is seen declining through 2026, kept in check by low oil prices and a strong euro. The impact of U.S. trade policies on global supply chains is a key factor to monitor.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2024 to 2021.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 39,067 | 44,007 | 42,477 | 46,272 | 47,900 |
| Economic Growth (Real GDP, ann. var. %) | -6.2 | 6.4 | 3.7 | 0.6 | 0.8 |
| Private Consumption (annual variation in %) | -7.9 | 4.6 | 5.3 | 0.6 | 1.2 |
| Investment (annual variation in %) | -6.0 | 3.7 | 2.2 | 2.7 | -2.1 |
| Fiscal Balance (% of GDP) | -7.0 | -5.1 | -3.4 | -3.5 | -3.1 |
| Public Debt (% of GDP) | 96.5 | 93.8 | 89.3 | 87.0 | 87.1 |
| International Reserves (USD bn) | 1,079 | 1,224 | 1,217 | 1,268 | 1,449 |
| Industrial Production (ann. var. %) | -7.8 | 9.0 | 1.8 | -1.7 | -3.0 |
| Current Account Balance (% of GDP) | 1.8 | 2.7 | -0.3 | 1.6 | 2.6 |
| Policy Interest Rate (%, eop) | 0.00 | 0.00 | 2.50 | 4.50 | 3.15 |
| Unemployment (% of active population, aop) | 8.0 | 7.8 | 6.8 | 6.6 | 6.4 |
| Merchandise Trade Balance (USD bn) | 390 | 345 | -51 | 282 | 387 |
| Merchandise Exports (USD bn) | 2,397 | 2,876 | 3,026 | 3,051 | 3,043 |
| Merchandise Imports (USD bn) | 2,007 | 2,531 | 3,076 | 2,769 | 2,656 |
| Money (ann. var. of M2 %) | 11.0 | 7.0 | 3.5 | -0.8 | 3.2 |