Euro Area Economic Outlook
Economic growth is forecast to rise next year compared to 2024’s expected rate. Private consumption will accelerate as inflation cools. Moreover, fixed investment is seen rebounding on the back of looser financing conditions. Sustained weakness in Germany’s industrial sector and U.S. tariffs in the event of a Trump presidency are downside risks.
Euro Area Inflation
In September, harmonized inflation fell to 1.7% from August’s 2.2%—falling below the ECB’s 2.0% target—driven by a faster decline in energy prices and slower services price growth. In 2025, inflation is expected to average around the ECB’s 2.0% target. Premature monetary policy easing and faster-than-expected wage growth are upside risks.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2021.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 40,315 | 39,213 | 44,151 | 42,586 | 46,348 |
| Economic Growth (Real GDP, ann. var. %) | 1.6 | -6.2 | 6.3 | 3.6 | 0.5 |
| 1.4 | -7.9 | 4.7 | 4.9 | 0.7 | |
| 7.1 | -6.0 | 3.6 | 2.2 | 1.8 | |
| Industrial Production (ann. var. %) | -0.9 | -7.8 | 8.8 | 2.3 | -2.2 |
| Unemployment (% of active population, aop) | 7.6 | 8.0 | 7.8 | 6.8 | 6.6 |
| Fiscal Balance (% of GDP) | -0.5 | -7.0 | -5.1 | -3.5 | -3.6 |
| Public Debt (% of GDP) | 83.6 | 96.5 | 93.8 | 89.5 | 87.4 |
| Policy Interest Rate (%, eop) | 0.00 | 0.00 | 0.00 | 2.50 | 4.50 |
| Current Account Balance (% of GDP) | 2.5 | 1.8 | 2.5 | -0.1 | 1.7 |
| Merchandise Trade Balance (USD bn) | 352 | 390 | 344 | -48 | 277 |
| Merchandise Exports (USD bn) | 2,571 | 2,397 | 2,873 | 3,020 | 3,045 |
| Merchandise Imports (USD bn) | 2,219 | 2,007 | 2,529 | 3,067 | 2,767 |
| International Reserves (USD bn) | 914 | 1,079 | 1,197 | 1,187 | 1,267 |
| Money (ann. var. of M2 %) | 5.7 | 11.0 | 7.0 | 3.6 | -0.7 |