Eurozone economic momentum cooled modestly at the end of 2025, with Services PMI finalized at 52.4 in December, down from 53.6 in November. Composite PMI also eased to 51.5 from 52.8.
Performance across countries remained uneven. Spain led the bloc with a composite reading of 55.6, a two-month high. Ireland slipped to 53.6. Germany eased to 51.3, its lowest in four months, Italy fell to 50.3, an eleven-month low, and France hovered at the stagnation threshold at 50.0.
Despite the slowdown, Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said the services sector has now expanded for seven consecutive months and that “the picture looks good” overall. He added that Composite PMI averaged a “visibly higher level” in the final quarter, suggesting GDP growth likely accelerated toward year-end, driven primarily by services. Growth prospects for 2026 improve modestly, with overall expansion seen above 1% but far from robust.
At the same time, rising cost pressures in services remain a key constraint on policy. ECB President Christine Lagarde has stressed close monitoring of services inflation, where higher wages continue to push costs and prices up. That dynamic explains why the ECB has paused further rate cuts.
