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Eurozone Economy Grows Again as Second Quarter Beats Forecasts

Zagreb: Across a continent braced for stagnation, the latest figures tell a steadier story. Eurozone growth held up through the spring, and a run of fresh data from the EU’s statistics office suggests the bloc’s economy is grinding forward rather than slipping back.

Seasonally adjusted output in the euro area rose 0.4% in the second quarter of 2026 compared with the previous three months, according to Eurostat’s flash estimate. The wider EU did slightly better at 0.5%. Measured against the same quarter a year earlier, the euro-area economy expanded by 1.0%.

The numbers land in territory economists call resilient rather than roaring. Growth stays modest, yet it defies the recession warnings that shadowed Europe through a period of high interest rates, trade tension and a war on the bloc’s eastern flank.

Consumer spending offers part of the explanation. Retail trade volumes edged up 0.2% in the euro area in the most recent monthly reading and stood well above the level of a year earlier, a sign that households are cautiously opening their wallets again as inflation cools.

Industry paints a more mixed picture. Factory output crept up just 0.1% month on month in the latest data, leaving manufacturers barely ahead of where they stood a year ago. Energy costs and soft external demand continue to weigh on Europe’s industrial base.

Smaller and faster-growing economies on the bloc’s periphery, from the Baltic states to parts of the Balkans and Iberia, have generally outpaced the large core, narrowing the gap with wealthier members and lending the aggregate figures extra momentum.

Eurostat cautioned that the reading is preliminary. The office will publish a more detailed second estimate in mid-August, which will show how much of the growth came from trade, investment and government spending rather than consumers alone.

For policymakers, the data eases pressure without settling the argument. Steady growth gives the European Central Bank room to hold its course, yet the weakness in industry keeps alive the debate over whether Europe needs a fresh push on competitiveness and investment.

The figures also feed the politics of the next EU budget, where governments weigh how much to spend on industrial support and the green transition against the need to keep deficits in check. A growing economy, however slowly, makes those trade-offs marginally easier.

The full monthly picture, including retail trade and industrial output, will sharpen when August’s releases arrive. For now, the message from the data is one of grudging endurance rather than revival.