EMU Growth Settles In as Advertised—Weak but Steady

Summary

• The European monetary union registered a 1.7% annual growth rate in the third quarter of 2026, following 2.6% in the second quarter 2026 0% in the first quarter 2026.
• Year-over-year growth for the monetary union was 1.3% in the third quarter 2026, compared to 1.2% in Q2 2026, 0.6% in Q1 2026, 1.1% in Q4 2025.
• Belgium was the only one of eight early-reporting economies to increase its growth rate in Q3 2026, rising to 1.2% from 0.6% in Q2.
• France experienced a 0.5% annual decline in GDP in Q3 2026 after flat growth in Q2, contrasting with a 0.7% annual decline in Q1.
• Ireland reported a 24% annual growth rate in Q3 2026, down from 47.4% in Q2 2026 27.8% in Q1 2026.
• The Netherlands saw its growth rate drop to 2.6% in Q3 2026 from 2.7% in Q2 2026.
• Spain's growth rate fell to 2.6% in Q3 2026 from 2.7% in Q2 2026.
• The four largest monetary union economies recorded a 0.6% annualized growth rate in Q3 2026, down from 1% in Q2 2026 1.1% in Q1 2026.
• The rest of the monetary union posted a 4.5% annualized growth rate in Q3 2026, down from 7% in Q2 2026 2.8% decline in Q1 2026.
• Year-over-year growth for the rest of the monetary union was 2.1% in Q3 2026, 1.5% in Q2 2026, -0.5% in Q1 2026, 1.3% in Q4 2025.
• The median annualized quarterly growth rate for the monetary union has been 1.1% to 1.2% over the last three quarters.
• The year-over-year growth rate for the monetary union has ranged between 1.3% 1.4% over the last four quarters.
• Growth rates for the monetary union 8 early-reporting economies rank below the 50% mark compared to historical medians back to 1996.
• Only the Netherlands, Portugal, 2026 Spain have growth rate rankings above their 50% historical median.
• The four largest economies hold a 32.6 percentile standing, while the rest of the monetary union holds a 50th percentile standing.
• The U.S. GDP growth rate for this period has a 34.1 percentile standing.
• The U.K. has a 52.2 percentile standing for its year-over-year GDP growth rate.
• Inflation remains over target, prompting central banks to focus more on the issue.
• Interest rates are rising in the monetary union, the U.K., the U.S., 2026 Japan.
• Wars 2026 high 2026 rising oil prices are factors influencing the inflation outlook.
• Future oil prices are uncertain following military action in the Middle East 2026 the war in Iran.