Euro Area Economic Outlook
GDP growth is projected to strengthen in 2025 from 2024 as ECB rate cuts and lower inflation support private consumption and fixed investment. Nonetheless, public spending growth is seen cooling and U.S. tariffs will hamper exports in H2. Looking at 2026, the economy is seen growing at a similar pace to 2025, thus remaining below pre-pandemic rates.
Euro Area Inflation
In August, harmonized inflation stabilized at July’s 2.0%, remaining at the ECB’s 2.0% target. Inflation is seen near the target in the coming quarters, kept in check by low oil prices and soft economic activity. A fragmentation of global supply chains pushing up import prices is an upside 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) | 38,950 | 43,852 | 42,319 | 46,025 | 47,637 |
| Economic Growth (Real GDP, ann. var. %) | -6.2 | 6.3 | 3.7 | 0.5 | 0.8 |
| Industrial Production (ann. var. %) | -7.8 | 9.0 | 1.8 | -1.7 | -3.0 |
| 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 |
| Private Consumption (annual variation in %) | -7.9 | 4.6 | 5.3 | 0.5 | 1.2 |
| Investment (annual variation in %) | -6.0 | 3.7 | 2.1 | 2.0 | -2.1 |
| Current Account Balance (% of GDP) | 1.8 | 2.7 | -0.3 | 1.6 | 2.6 |
| Unemployment (% of active population, aop) | 8.0 | 7.8 | 6.8 | 6.6 | 6.4 |
| Policy Interest Rate (%, eop) | 0.00 | 0.00 | 2.50 | 4.50 | 3.15 |
| 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 |
| International Reserves (USD bn) | 1,079 | 1,197 | 1,187 | 1,267 | 1,448 |