Euro Area Economic Outlook
In 2025, GDP growth is expected to increase relative to 2024. Cooling inflation will enhance private spending, and lower interest rates will boost fixed investment. Rising exports growth will also aid momentum. Nonetheless, risks to the outlook are skewed to the downside, including higher U.S. tariffs under Trump and a prolonged malaise in Germany’s industrial sector.
Euro Area Inflation
In October, harmonized inflation hit the ECB’s 2.0% target, rising from September’s 1.7% on stronger price pressures for energy and food. Next year, average inflation is expected to remain at the ECB’s 2.0% target, tamed by moderating commodity prices. Faster-than-expected wage growth and premature monetary easing pose 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 | 2.2 | -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 |