Eurozone Growth Slows as France Contracts and Italy Stalls

The euro area economy expanded by 0.4% in the third quarter of 2026, slowing from 0.6% in the previous three months, according to a preliminary flash estimate from the European Union’s statistics office Eurostat, Xinhua reported on Friday. France’s output shrank and Italy’s stalled, while Germany posted modest growth.

Across the wider 27-member European Union, gross domestic product rose 0.5% quarter on quarter, down from 0.7% in the second quarter, the flash data showed.

Compared with a year earlier, growth picked up slightly. Euro area GDP was 1.3% higher than in the third quarter of 2025, up from 1.2% in the second quarter, while EU output grew 1.5% year on year, compared with 1.4% previously, according to figures reported by Xinhua and the Market Technicians Association (MTA).

Xinhua noted that the eurozone economy had stagnated in the first quarter of the year before rebounding in the second.

France contracts, Germany edges up

Among the bloc’s largest economies, Germany grew 0.2% in the quarter, slightly slower than the 0.3% recorded in the second quarter. France’s GDP fell 0.1% after flat output in the previous quarter, and Italy stagnated after growing 0.2%. Spain expanded 0.6%, compared with 0.7% in the second quarter.

Ireland recorded the strongest quarterly growth at 5.5%, followed by Estonia, Spain and the Netherlands, each at 0.6%, according to the MTA’s summary of the Eurostat release. Lithuania posted the sharpest contraction at 1.0%, while France was the only other member state with a decline.

On an annual basis, GDP growth was positive in 14 countries and negative in one, the MTA said.

Energy prices and rates weigh

The data came a day after the European Central Bank left its three key interest rates unchanged. Xinhua reported that the ECB warned continued increases in energy prices posed upside risks to inflation and downside risks to economic growth.

Bert Colijn, chief economist at ING, told Xinhua that persistently rising energy prices, including natural gas, would create further challenges for eurozone growth over the winter months. He also pointed to the relatively high level of interest rates and weakening business demand for loans, citing the ECB’s bank lending survey.

What’s next

Eurostat cautioned that the preliminary estimates are based on incomplete data and remain subject to revision as more information becomes available, according to both Xinhua and the MTA.

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