The Eurozone Economy shows signs of resilience: inflation should stabilize around 2% in the medium term, thanks to a gradual moderation in service prices and wages, while the growth remains supported by the question internand at our consumption and from the sector of services, with an unemployment rate near a record low of 6,4%.
Also markets financials reflect confidence: the stock spread of European states have fallen to historically low levels, supported by the favorable reassessment of the budgetary outlook in countries such as Italy and Spain, while political uncertainty in France has eased without causing lasting turbulence. The ECB emphasizes that the decisions on rates they will continue to be data-driven, carefully monitoring risks international, financial volatility and market evolution.
This is what emerges from thelatest economic bulletin from the European Central Bank.
Inflation: stability and medium-term prospects
According to the macroeconomic projections updated by the Eurosystem, inflation Overall inflation will rise from 2,1% in 2025 to 1,9% in 2026, to 1,8% in 2027, and then back to 2,0% in 2028. Excluding energy and food, average inflation will stand at 2,4% in 2025, gradually declining to 2,0% in 2028, thanks to the slowdown in service prices and the effect of the stronger euro on goods. The entry into force of the new European System of Exchange Rate Trading ETS2 emission allowances In 2028, it will bring a small increase of around 0,2 percentage points in overall inflation. Services inflation, which was 3,5% in November 2025, remains a concern, while forward-looking indicators suggest wage moderation towards 3% by the end of 2026.
Le perspectives however, they remain more uncertain as usual: a strengthening euro, financial volatility, or disruptions in supply chains could slow price pressures, while increased government spending or wage pressures could push them higher.
Economic growth: services, consumption and domestic demand
The Eurozone Economy has recorded in third quarter of 2025 growth of 0,3%, supported by consumption and investment. Services, particularly information and communications, led the expansion, while industry and construction remained stable. Exports contributed positively, especially in the chemicals sector, and domestic demand continues to be the main driver thanks to rising real wages and resilient employment. Additional public spending on infrastructure and defense, especially in Germany, and more favorable financing conditions following the rate cuts that began in mid-2024, further support the domestic economy. On the external front, exports are expected to pick up again in 2026, thanks to reduced uncertainty about trade policies, despite the shadow of tariffs.
Le new estimates they formulate a growth framework more solid compared to the September forecasts, with GDP estimated to increase by 1,4% in 2025, 1,2% in 2026 and 1,4% in 2027 and 2028, confirming the resilience of the euro area despite global geopolitical uncertainties. level world, growth is forecast at 3,5% in 2025 and 3,3% in 2026, supported by investments in artificial intelligence and international trade in technology goods, despite volatility arising from tariffs and political tensions.
Price trends and wage dynamics
La growth salaryAfter peaking in 2025, inflation is expected to slow until 2026, stabilizing around 3% towards the end of the year. Unit labor costs per employee increased by 4%, partly due to wages above contract levels. The ECB expects that wage moderation and the slowdown in services inflation will keep headline inflation consistent with its medium-term objective of 2%. cost of credit for businesses and families remained stable, respectively at 3,5% and 3,3% for mortgages, while Loans banking business loans grew moderately (+2,9%), signaling an orderly transmission of monetary policy.
Geopolitical risks and EU policies
The ECB emphasizes that high international volatility, particularly the Russia-Ukraine conflict, trade tensions, and potential supply chain disruptions, remain sources of uncertainty that could weigh on consumption, investment, and exports.
To address these challenges, the Governing Council highlights the urgency of strengthening the resilience of the euro area by supporting the sustainability of public finances, investments strategic, reforms structural, completion of the single market e integration of capital marketsRapid adoption of the digital euro falls within this path.
Government bond spreads and budget outlook
- spread European government bond yields have fallen relative to risk-free rates, signaling strong risk appetite and a favorable reassessment of the fiscal outlook for countries such as Spain and Italy. As political uncertainty eases in FranceFrench bond yields also showed similar dynamics, while the downgrade of France's credit rating only caused a short-lived reaction in the markets. The dispersion of spreads between countries has fallen to historically low levels, and in 2027 the expected fiscal tightening will be mitigated by German spending plans and the deferral of NRRP spending in Spain e ItalyDespite the complex international environment, GDP growth of 0,3% in the fourth quarter of 2025 indicates that growth, driven by services, will continue in the short term.
