Eurozone economic growth accelerated in the second quarter, with preliminary data from Eurostat showing GDP expanded 0.4% qoq, beating expectations of 0.2% and marking a clear improvement from the 0.0% pace recorded in the first quarter. The broader EU economy grew 0.5% qoq, up from 0.1%, suggesting the region regained momentum despite persistent geopolitical tensions and trade uncertainty.
The recovery also strengthened on an annual basis. Eurozone GDP growth accelerated to 1.0% yoy from 0.5%, while EU growth picked up to 1.2% from 0.8%. Country-level data pointed to a broader expansion rather than one driven by a handful of economies.
Spain and Portugal continued to outperform, Germany maintained its gradual recovery, France returned to quarterly growth after a contraction in the first quarter, while several smaller economies, including Sweden and Finland, posted robust gains. Although Belgium and Austria stagnated, the overall picture suggests the recovery has become increasingly widespread.
The stronger-than-expected GDP figures should provide some reassurance that the Eurozone economy is weathering external headwinds better than anticipated. However, the pace of expansion remains moderate rather than booming, with Germany still recovering only gradually and domestic demand showing little sign of overheating.
Economic Data
| Indicator | Q2 2026 | Q1 2026 |
|---|---|---|
| Eurozone GDP (q/q) | 0.4% | 0.0% |
| Eurozone GDP (y/y) | 1.0% | 0.5% |
| EU GDP (q/q) | 0.5% | 0.1% |
| EU GDP (y/y) | 1.2% | 0.8% |
| Market Expectation (Eurozone q/q) | 0.2% | — |
Selected Member States (Quarterly GDP)
| Economy | Q2 q/q | Q1 q/q |
|---|---|---|
| Spain | 0.7% | 0.6% |
| Portugal | 0.8% | 0.1% |
| Germany | 0.2% | 0.4% |
| France | 0.2% | -0.1% |
| Italy | 0.2% | 0.3% |
| Netherlands | 0.4% | 0.3% |
| Belgium | 0.0% | 0.2% |
| Austria | 0.0% | 0.2% |
Key Takeaways
- Eurozone GDP expanded 0.4% qoq, beating expectations of 0.2% and improving from flat growth in Q1.
- Annual growth accelerated to 1.0% y/y from 0.5%, while EU GDP strengthened to 1.2% from 0.8%.
- The recovery appears more broad-based, with Spain and Portugal continuing to outperform, Germany maintaining its gradual recovery, and France returning to positive quarterly growth.
- Several smaller economies, including Sweden, Finland and Lithuania, also posted robust quarterly gains, suggesting growth is becoming more geographically balanced.
- Belgium and Austria stalled during the quarter, while Ireland remained an outlier due to multinational-related volatility.
- Overall, the figures point to a steady recovery rather than an economic boom, supporting the view that the Eurozone economy is becoming more resilient despite geopolitical uncertainty and higher energy prices.
