Eurozone: Resilient growth, worrying inflation – ABN AMRO
ABN AMRO economists Bill Diviney and Jan-Paul van de Kerke expect Eurozone growth to remain resilient despite a renewed energy shock, supported by German fiscal spending and solid underlying activity.
ABN AMRO analysts predict steady Eurozone expansion despite a fresh energy crisis, driven by Germany's fiscal spending and strong underlying performance. They now forecast 0.8% growth for 2026 and 1.2% for 2027, but caution that persistently high inflation and its potential second-round effects could prompt the European Central Bank to tighten monetary policy further.
The inflationary pressure has already surged to a three-year high of 3.3% in August, mainly due to energy costs, with goods inflation also increasing. This rise in inflation, which could exceed 3.5% in the coming months and average 3.0% in 2026, is expected to exacerbate concerns over wage inflation, with early indications of a rise in workers' earnings.
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