Euro Area Economic Outlook
In 2025, GDP growth is projected to narrowly exceed that of 2024. Lower inflation and interest rates will boost private spending and drive a rebound in fixed investment. Moreover, exports should remain resilient in the face of higher U.S. tariffs. Still, public spending growth should cool as some countries try to rein in their deficits.
Euro Area Inflation
In June, harmonized inflation hit the ECB’s 2.0% target, rising from May’s 1.9%, driven by faster increases in services prices. Inflation is projected to remain around target in the coming quarters, tamed by low oil prices and sluggish economic activity. Commodity price spikes are an upside risk while a stronger-than-expected euro is a downside risk.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2024.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 38,946 | 43,831 | 42,211 | 45,913 | 47,558 |
| Economic Growth (Real GDP, ann. var. %) | -6.2 | 6.3 | 3.6 | 0.7 | 0.9 |
| Private Consumption (annual variation in %) | -7.9 | 4.7 | 5.0 | 0.6 | 1.1 |
| Investment (annual variation in %) | -6.0 | 3.6 | 2.0 | 2.2 | -1.9 |
| Industrial Production (ann. var. %) | -7.8 | 9.0 | 1.8 | -1.7 | -3.0 |
| Unemployment (% of active population, aop) | 8.0 | 7.8 | 6.8 | 6.6 | 6.4 |
| Fiscal Balance (% of GDP) | -7.0 | -5.1 | -3.5 | -3.5 | -3.1 |
| Public Debt (% of GDP) | 96.5 | 93.9 | 89.5 | 87.3 | 87.4 |
| Policy Interest Rate (%, eop) | 0.00 | 0.00 | 2.50 | 4.50 | 3.15 |
| Current Account Balance (% of GDP) | 1.8 | 2.7 | -0.2 | 1.6 | 2.6 |
| Merchandise Trade Balance (USD bn) | 390 | 345 | -48 | 272 | 393 |
| Merchandise Exports (USD bn) | 2,397 | 2,876 | 3,022 | 3,043 | 3,050 |
| Merchandise Imports (USD bn) | 2,007 | 2,530 | 3,070 | 2,772 | 2,656 |
| International Reserves (USD bn) | 1,079 | 1,197 | 1,187 | 1,267 | 1,448 |
| Money (ann. var. of M2 %) | 11.0 | 7.0 | 3.5 | -0.8 | 3.1 |