Every atomic assertion extracted from the underlying record, ranked by evidence strength.
The impact of the conflict in the Middle East is likely to restrict Eurozone GDP growth to 1.0% in 2026.
Inflation is projected at 3.0% in 2026 and 3.3% in 2027, compared to initial estimates of 1.9% and 2.3%.
The rise in inflation raises the risk of the European Central Bank tightening monetary policy as early as 2026.
Ongoing investment in defence, artificial intelligence, and electrification is expected to continue and boost intra-European Union trade.
The expected deterioration in public finances in 2026 will be significantly less severe than in 2022.
The high savings rate will enable households to mitigate the impact of economic shocks over time.
Economic activity could suffer from less favourable interest rate dynamics.
A 50bp increase in European Central Bank rates is anticipated in 2026.
The conflict in the Middle East is undermining the prospects for a recovery in household consumption in the first half of 2026.
Rising energy prices are weighing on real wages.
Real wages are expected to fall by around 0.5 percentage points in 2026.
Wage growth is expected to fall below inflation from Q2 2026 onwards.
The savings rate in the Eurozone remains high at 14.4% of disposable income in Q4 2025.
More structural factors supporting economic activity remain intact.
Investment in artificial intelligence and digital infrastructure is ongoing.
The recovery in hourly productivity is becoming clearer (+0.9% in 2025 compared with 2024) and is expected to continue.
Investment spending in Germany is already strengthening.
Spending in the European defence sector is set to rise by nearly EUR 80 billion in 2026.
Due to the strengthening of domestic demand, it will be difficult to improve the external balance's contribution to GDP.
The external balance's contribution to GDP was negative in 2025, at 0.6 percentage points.
The growth trajectory in 2026 will be bumpy instead of the smooth growth trajectory expected prior to the outbreak of war in Iran.
Q1 2026 is expected to be resilient for the Eurozone.
A slowdown is expected in Q2 2026 for the Eurozone.
A rebound in activity is expected in the second half of 2026 for the Eurozone.
Monetary tightening by the European Central Bank is anticipated in 2026.
Monetary tightening will likely be accompanied by a rise in long-term rates.
A continued rise in rates for new household mortgage loans began in January 2026.
Rates on new household mortgage loans increased by 10 basis points to reach 3.4% in January 2026.
Rates on new fixed-rate loans account for around 35% of new mortgage lending in the Eurozone.
The rise in fixed-rate loan rates is expected to continue but will be more moderate than that of new variable-rate loans for the remainder of 2026.
The slowdown in new mortgage lending since December 2025 is expected to continue.
The continued slowdown in new mortgage lending will exert pressure on the construction sector and property-related activities.
The rise in market rates and risk premiums imposed by banks, together with their reduced risk tolerance, could push up the cost of consumer credit.
The cost of consumer credit is at a historically high level of 7.5% in January 2026.
The average consumer credit cost was 5.5% between 2018 and 2022.
The slowdown in new consumer credit output is expected to intensify in 2026.
The intensified slowdown in new consumer credit output will weigh on economic activity, particularly in the retail sector.
Retail sector growth was +1.5% year-over-year in January 2026 compared with +1.7% year-over-year in December 2025 on a year-to-date basis.
Growth in new investment loans to businesses was +11.9% year-over-year in January 2026 compared with +15.2% year-over-year in October 2025 on a year-to-date basis.
Interest rates for fixed-rate business loans have remained relatively stable around 3.6% since November 2024.
Business loan interest rates are not currently a main factor limiting investment decisions.
Rising energy and raw material costs are likely to increase demand for working capital.
Demand for working capital is already at an unprecedented level.
The precise magnitude of the price rise remains dependent on how the conflict in the Middle East unfolds and on the second-round effects of the energy shock.
Rising production costs will impact corporate profit margins.
Corporate profit margins were 39.2% of value added in Q3 2025, one percentage point below their historical average.
The likely fall in real wages should mitigate the shock to corporate profit margins.
Firms are expected to limit increases in their selling prices to what is strictly necessary, in light of demand being depressed by the energy shock.
The rise in core inflation is expected to begin only in Q3 2026 and remain contained.
Imported deflation from China remains a significant factor in moderating goods prices in Europe.
Imported deflation from China could diminish with the energy shock.
Import prices for machinery and equipment from China were down 2.3% year-on-year in January 2026.
Import prices for chemicals from China were down 3.2% year-on-year in January 2026.
Inflation is then expected to ease in 2027.
The contraction in real wages is expected to end in the second half of 2027.
The labour market is expected to continue facing headwinds.
Artificial intelligence could have a greater impact on job creation in digital and tech sectors than in the past.
Job creation in the digital and tech sector slowed significantly in 2025 to 41,800 jobs.
Job creation in the digital and tech sector was 198,000 in 2024.
Average job creation in the digital and tech sector was 285,000 for 2022-2024.