Key Points
- The Eurozone is set to release key GDP and inflation data this week. Analysts expect another quarter of very weak growth, at just 0.1%.
- The data will show the impact of U.S. tariffs on the European economy.
- The European Central Bank is widely expected to keep interest rates on hold.
- Germany is showing signs of a rebound, but France’s political crisis remains a major risk.
Europe is bracing for a week of crucial economic data that will give the clearest picture yet of how the region is holding up under the weight of U.S. tariffs and persistent inflation. The main event will be the release of the Eurozone’s third-quarter GDP figures, which come just hours before the European Central Bank’s latest interest rate decision.
Analysts are expecting another quarter of minimal growth, with the bloc likely to have expanded by just 0.1%, the same sluggish pace as the previous quarter. The numbers will reveal how businesses and consumers have adjusted to the new trade landscape, particularly the 15% tariff on most goods heading to the U.S.
“Consumer confidence remains subdued despite a robust labor market,” said a Barclays economist, “and GDP figures will reveal whether the recovery… continues to fail to materialize.”
Despite the weak growth, the ECB is widely expected to keep interest rates on hold at 2%. With inflation hovering around the bank’s 2% target, most officials seem content to wait and see.
There are some glimmers of hope. Recent business surveys showed a surprise jump in private-sector activity, driven by a strong performance in Germany. However, France’s ongoing political turmoil and its massive budget deficit remain a major risk to the region’s outlook.
For now, the story is one of stagnation. The big question is whether the expected economic rebound will finally kick in toward the end of the year, or if Europe is in for a longer period of sluggish growth.
