The International Monetary Fund (IMF) has released its latest World Economic Outlook (WEO), forecasting a growth rate for the eurozone’s GDP at 0.8% for this year, down from the 1% predicted in an update in January.
Looking ahead to 2026, the IMF predicts a eurozone growth rate of 1.2%, which is also a downgrade from the 1.4% it forecasted in January.
“The eurozone has been experiencing a cyclical recovery, but domestic demand has been weak. With the exception of Germany, the contribution of consumer growth may have peaked in its largest economies,” the IMF stated.
The organization also highlighted the “weak consumer sentiment and high uncertainty,” which “increased precautionary savings” and “weighed on consumption growth.”
Moreover, the IMF noted that industrial activity has remained “weak due to persistent higher energy prices, while services have been the main growth driver, contributing to divergences among European countries, especially those more reliant on these sectors, such as Germany and Spain.”
Germany is particularly noteworthy in the IMF’s forecast, with stagnation expected this year (0%) and a projected growth of 0.9% in 2026.
France is anticipated to see GDP growth of 0.6% this year and 1% in 2026.
According to the IMF, southern European countries, including Portugal, are expected to grow at a faster pace this year, with Portugal set for a 2% GDP growth, while Spain is projected to grow by 2.5% and Greece by 2%.
