Euro Area Economic Outlook
In 2025, the economy is expected to grow at a similar pace to last year, remaining below the pre-pandemic 10-year average. ECB rate cuts and EU funds will boost private spending and revive fixed investment. That said, exports are seen slowing due to intensified U.S. protectionism. Trade negotiations between the EU and the U.S. will be critical.
Euro Area Inflation
In May, harmonized inflation fell to 1.9% from March’s 2.2%, below the ECB’s 2.0% target due to softer price pressures for services. Inflation is forecast to remain near target in the coming quarters, kept in check by subdued oil prices and downbeat economic momentum. Retaliatory EU tariffs on the U.S. pose an upside risk.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2024.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Unemployment (% of active population, aop) | 8.0 | 7.8 | 6.8 | 6.6 | 6.4 |
| GDP per Capita (USD) | 38,947 | 43,834 | 42,211 | 45,921 | 47,504 |
| Economic Growth (Real GDP, ann. var. %) | -6.2 | 6.3 | 3.6 | 0.6 | 0.8 |
| Private Consumption (annual variation in %) | -7.9 | 4.7 | 5.0 | 0.6 | 1.1 |
| Investment (annual variation in %) | -6.0 | 3.7 | 2.1 | 1.8 | -1.8 |
| 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 |
| 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 | 2.7 |
| Merchandise Trade Balance (USD bn) | 390 | 345 | -48 | 285 | 402 |
| Merchandise Exports (USD bn) | 2,397 | 2,876 | 3,023 | 3,055 | 3,069 |
| Merchandise Imports (USD bn) | 2,007 | 2,530 | 3,071 | 2,770 | 2,666 |
| 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 |