Business · Economy · 2 hrs ago
Eurozone growth beats forecasts as energy and borrowing costs threaten outlook
The 21-country eurozone economy grew 0.4% in the third quarter of 2026, down from 0.6% in the previous quarter but above economists’ 0.2% forecast.
Growth varied across major economies: Spain and the Netherlands grew 0.6%, Germany grew 0.2%, Italy was flat and France shrank 0.1%.
Investment and household spending supported growth, alongside demand from abroad; spending on artificial intelligence, defense and infrastructure also contributed.
Europe imports much of its energy, so higher energy prices can weaken growth by raising costs for households and businesses.
Inflation has picked up, and higher borrowing costs could further slow the economy; the European Central Bank has warned that risks are tilted towards weaker growth.
A December interest-rate rise is possible if inflation remains high, but the sources do not say whether the bank has decided to act.
The 21-country eurozone economy grew 0.4% in the third quarter of 2026, above economists’ 0.2% forecast.
Growth slowed from 0.6% in the second quarter, while the economy expanded 1.3% from a year earlier.
Investment, foreign demand and household spending supported growth despite higher energy prices.
Germany grew 0.2%, Spain and the Netherlands each grew 0.6%, Italy was unchanged and France contracted 0.1%.
Rising energy and borrowing costs, along with inflation, threaten to weaken growth.
- Who
- The 21 countries that use the euro.
- What
- The eurozone economy grew 0.4% in the third quarter of 2026, beating forecasts.
- When
- The third quarter of 2026.
- Where
- The eurozone.
- Why
- Investment and household spending, supported by foreign demand, helped growth. Higher energy and borrowing costs are risks to the outlook.
This story does not have two clearly opposing sides.
The eurozone economy stagnated.
The eurozone economy grew 0.6%.
The eurozone economy grew 0.4%, above the 0.2% forecast in a Reuters poll.
- Eurozone membership
- 21 countries
- Third-quarter growth
- 0.4%
- Reuters forecast
- 0.2%
- Year-on-year growth
- 1.3%
- Germany
- 0.2% growth in the third quarter
- France
- 0.1% contraction in the third quarter
4 sources
What people are saying
The eurozone showed unexpected resilience amid considerable economic and geopolitical uncertainty
The outlook for 2027 is becoming more complicated because of the threat of continued inflationary pressure