Euro Area Economic Outlook
Since the start of the Iran war, our Consensus has dropped by 0.5 percentage points, making the bloc the world’s second-most affected region, reflecting its high exposure to energy-price shocks. GDP growth is now seen at a three-year low in 2026, as higher energy costs weigh on household real incomes and drag on private consumption growth.
Euro Area Inflation
In May, harmonized inflation in the euro area rose to a 32-month high of 3.2% from April’s 3.1%, remaining above the ECB’s 2.0% target for a third straight month. Inflation is set to hit a three-year high this year, and to remain above target until 2029 amid higher energy prices, which will feed into food, goods and services inflation.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Industrial Production (ann. var. %) | 9.0 | 1.9 | -1.7 | -3.0 | 1.6 |
| GDP per Capita (USD) | 42,563 | 41,161 | 44,847 | 46,465 | 50,217 |
| Economic Growth (Real GDP, ann. var. %) | 6.4 | 3.7 | 0.6 | 0.9 | 1.5 |
| Fixed Investment (ann. var. %) | 3.6 | 2.2 | 2.9 | -2.5 | 3.2 |
| Private Consumption (ann. var. %) | 4.6 | 5.3 | 0.6 | 1.3 | 1.5 |
| Unemployment (% of active population, aop) | 7.7 | 6.7 | 6.5 | 6.4 | 6.3 |
| 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 |
| Money (ann. var. of M2 %) | 7.1 | 3.6 | -0.8 | 3.2 | 3.0 |
| Policy Interest Rate (%, eop) | 0.00 | 2.50 | 4.50 | 3.15 | 2.15 |