Euro Area Economy Expected to Grow 0.9% in 2026 Amid Middle East Conflict

The European Central Bank (ECB) staff has projected that the euro area economy will grow by 0.9% in 2026, 1.4% in 2027, and 1.5% in 2028.

This growth is expected to be more resilient to the effects of the conflict in the Middle East than previously anticipated.

The ECB has revised up its GDP growth projections for these years by 0.1 percentage points for 2026, or 0.3 percentage points when adjusting for volatility in Irish data.

Export growth is expected to improve as foreign demand strengthens, but persistent competitiveness challenges are expected to continue weighing on exports.