The Eurozone economy grew by just 0.3% year-on-year in Q1 2026, sharply revised down from an earlier estimate of 0.8% and slowing from 1.2% in Q4 2025. This is the weakest annual expansion since Q4 2023 and underscores mounting pressure from constrained energy supplies and higher inflation tied to the Middle East conflict.
Growth dynamics were notably weaker across key components. Gross fixed capital formation almost stalled, rising only 0.3% compared with 3.3% in the previous quarter, while exports swung into contraction, falling 0.9% after a 2.1% increase in Q4. Household consumption growth eased to 1.1% from 1.3%, in contrast to government spending, which accelerated to 2.3% from 1.5%. Import growth also lost momentum, slowing to 1.9% from 3.8%.
At the country level, Ireland recorded a severe downturn, with output contracting 16.8% year-on-year after a 2.9% increase in Q4. Among the major economies, Germany registered the weakest performance, expanding by just 0.3% compared with 0.4% previously. Growth also cooled in France (0.9% vs 1.1%) and Italy (0.8% vs 0.9%), whereas Spain edged higher, posting 2.7% growth versus 2.6% in the prior quarter.
On a quarter-on-quarter basis, Eurozone GDP declined by 0.2%, the first contraction since 2022 and the steepest drop since the pandemic-driven downturn of 2020.
