The eurozone economy grew by 0.4% in the second quarter of 2026, picking up from flat growth in the previous quarter and surpassing market expectations of a 0.2% increase, according to preliminary estimates. This was the bloc’s strongest quarterly performance since the first quarter of 2025, as strong AI-related investment, solid government spending, and several one-off factors helped counteract the drag from the conflict in Iran and higher energy costs.
Among the largest economies in the currency bloc, Spain once again led the way, with GDP rising 0.7%, up from 0.6% in the first quarter and above forecasts. The Netherlands expanded by 0.4%, double the expected rate, while France returned to growth with a 0.2% increase after a 0.1% contraction. Germany and Italy also posted gains of 0.2%, a slight moderation from the previous quarter but still better than anticipated. On an annual basis, eurozone growth accelerated to 1% in the second quarter, up from a revised 0.5% three months earlier and again beating expectations.
