THINK Economic and Financial Analysis

Latest edition · September 3, 2026

ING Think eurozone economy remains resilient 1

The eurozone economy has weathered the recent energy shock better than expected, with Q2 GDP expanding 0.4% and prompting an upgrade to 2026 growth forecasts to 0.8%. However, with headline inflation at 3.3% and projected to stay above 3% until spring 2027, the ECB is poised to hike rates in September with another potential increase in December.

Despite energy shocks tied to conflict in the Middle East, eurozone economic activity remains resilient, driven by a 0.4% GDP expansion in Q2 and stabilizing sentiment in Q3. Germany has emerged as a key growth driver thanks to infrastructure and defence spending, whereas France's zero growth in H1 2026 raises fiscal and sovereign spread concerns. Headline inflation accelerated to 3.3% in August on higher energy and gas replenishment costs, and is projected to hold above 3% until spring 2027. Consequently, the European Central Bank is highly likely to raise rates in September, with a further hike in December possible depending on geopolitical developments and financial conditions.

Key takeaways from the latest edition

• 1.The eurozone economy grew by 0.4% in Q2, prompting an upgrade of ING's 2026 GDP growth forecast to 0.8% and 2027 to 1.3%.
• 2.Headline inflation rose to 3.3% in August due to higher energy prices, and is expected to stay above 3% until spring 2027.
• 3.An ECB rate hike in September is highly likely, with potential for an additional hike in December toward or stopping at 2.50%.

What this series covers

• A surprisingly strong second quarter (though not everywhere)
• Underlying growth momentum remains positive
• Business sentiment recovered
• Inflation to remain above 3% until spring 2027
• ECB likely to raise rates at least once more
• Author
• Disclaimer

Edition archive

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