Euro Area Economic Outlook
GDP growth is seen at a three-year low this year as the spike in energy costs weighs on the disposable income of households, in turn, the growth of their consumption. Additionally, exports will decelerate notably compared to last year amid U.S. tariffs and crude oil supply disruptions for refiners. A resumption of a full-scale U.S.-Iran war is a downside risk.
Euro Area Inflation
Inflation rose to 3.0% in July from 2.8% in June and further above the ECB’s 2.0% target, driven by surging energy prices amid renewed U.S.-Iran hostilities. Inflation is projected to average a three-year high in 2026 and remain above target until 2028 amid higher energy prices, which will also stoke the cost of food, goods and services.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Unemployment (% of active population, aop) | 7.7 | 6.7 | 6.5 | 6.4 | 6.3 |
| Industrial Production (ann. var. %) | 9.0 | 1.9 | -1.7 | -3.0 | 1.6 |
| Money (ann. var. of M2 %) | 7.0 | 3.6 | -0.8 | 3.2 | 3.1 |
| GDP per Capita (USD) | 42,563 | 41,169 | 44,835 | 46,444 | 50,078 |
| Fixed Investment (ann. var. %) | 3.6 | 2.3 | 2.8 | -2.3 | 3.1 |
| Economic Growth (Real GDP, ann. var. %) | 6.4 | 3.7 | 0.6 | 1.0 | 1.3 |
| Private Consumption (ann. var. %) | 4.6 | 5.3 | 0.6 | 1.3 | 1.5 |
| Public Debt (% of GDP) | 93.8 | 89.3 | 86.9 | 87.0 | 87.8 |
| Fiscal Balance (% of GDP) | -5.1 | -3.4 | -3.5 | -3.0 | -2.9 |
| Merchandise Exports (USD bn) | 2,876 | 3,025 | 3,051 | 3,044 | 3,263 |
| Merchandise Imports (USD bn) | 2,531 | 3,077 | 2,769 | 2,653 | 2,847 |
| Current Account Balance (% of GDP) | 2.7 | -0.3 | 1.6 | 2.7 | 1.6 |
| International Reserves (USD bn) | 1,197 | 1,188 | 1,268 | 1,449 | 2,087 |
| Merchandise Trade Balance (USD bn) | 345 | -52 | 282 | 391 | 415 |
| Policy Interest Rate (%, eop) | 0.00 | 2.50 | 4.50 | 3.15 | 2.15 |