Data extracted on 20 January 2026
Planned article update: 24 February 2026
Highlights
Compared with the previous month, in December 2025 euro area annual inflation decreased to 1.9%. In the same month, economic sentiment weakened and employment expectations decreased.
In November 2025, industrial production in the euro area increased compared with the previous month (up 0.6%), while production in construction decreased (down 1.1%) and retail trade sales increased slightly (up 0.1%).
In Q3 of 2025, GDP in the euro area expanded (when compared with the previous quarter), rising 0.3%; this was a larger increase than in Q2 of 2025 (up 0.1%).
Latest macroeconomic developments
Based on the figures available on 20 January 2026, the economic situation in the euro area and the EU is characterised by:
- a lower level of inflation (as measured by the all-items harmonised index of consumer prices (HICP)) in December 2025
- an expansion in GDP in the 3rd quarter of 2025
- an increase in industrial production in November 2025
- a decrease in production in construction in November 2025
- a slight increase in retail trade sales in November 2025
- a stable unemployment rate in November 2025
- a weakening of economic sentiment in December 2025
- lower employment expectations in December 2025.
The economic situation in both the euro area and the EU showed mainly positive signals. Positive developments include an increase in GDP, increases in industrial production and retail trade sales, and a fall in inflation. By contrast, there was a decrease in construction production, a weakening of economic sentiment as well as lower employment expectations. There was no change in the unemployment rate.
Situation in the euro area and the EU
GDP increased 0.3% quarter on quarter in the euro area in the 3rd quarter of 2025
In the 3rd quarter of 2025, seasonally adjusted GDP increased, up 0.3% quarter on quarter in the euro area and 0.4% in the EU. For comparison, an increase of 0.1% had been observed in the 2nd quarter in the euro area and 0.3% in the EU. Compared with the same quarter of the previous year, GDP was 1.4% higher in the 3rd quarter of 2025 in the euro area and 1.6% higher in the EU.
In November 2025, seasonally adjusted industrial production increased month on month by 0.6% in the euro area and by 0.2% in the EU. In the previous month, there had been increases of 0.7% in the euro area and 0.2% in the EU. Compared with November 2024, industrial output was 2.4% higher in November 2025 in the euro area and 2.2% higher in the EU.
In December 2025, economic sentiment weakened in the euro area
In December 2025, the economic sentiment indicator decreased, down 0.4 percentage points in the euro area and 0.1 percentage points in the EU: the index level was 96.7 percentage points in the euro area and 96.8 percentage points in the EU. The decrease in the euro area resulted from decreases in confidence among consumers as well as retail trade and services managers outweighing increases among industrial and construction managers.
Source: Eurostat (namq_10_gdp, ei_isir_m and ei_bssi_m_r2) and DG Economic and Financial Affairs (ECFIN)
After peaking in October 2022 at 10.6% in the euro area and 11.5% in the EU, the annual inflation rate has fluctuated since January 2025 between 1.9% and 2.5% in the euro area and between 2.2% and 2.8% in the EU.
In December 2025, the annual inflation rate was 1.9% in the euro area
According to the latest data from Eurostat, the annual inflation rate (based on the HICP) in the euro area was 1.9% in December 2025, down 0.2 percentage points from the previous month. The category of services recorded the highest annual rate in December 2025 (prices were up 3.4%, marginally slower than the 3.5% increase in the previous month), followed by food, alcohol and tobacco (up 2.5%, marginally faster than the 2.4% increase in the previous month) and non-energy industrial goods (up 0.4%, marginally slower than the 0.5% increase in the previous month). After a series of four negative rates, the annual rate for energy turned positive from December 2024 to February 2025 before turning negative again in March 2025; the latest rate was a decrease of 1.9% in December 2025, considerably faster than the 0.5% decrease recorded in the previous month. In the EU, the annual inflation rate was 2.3% in December 2025, down 0.1 percentage points from the previous month.
The annual average inflation rate for the whole of 2025 was 2.1% for the euro area (compared with 2.4% in 2024) and 2.5% for the EU (compared with 2.6%).
Compared with a year earlier, industrial producer prices in November 2025 were 1.6% lower in the euro area and 1.3% lower in the EU. Month on month, industrial producer prices increased in November 2025, up by 0.5% in the euro area and 0.6% in the EU; in the previous month, they had increased marginally (up 0.1%) in both the euro area and the EU.
Compared with a year earlier, industrial import prices in November 2025 were 2.9% lower in the euro area; on the basis of a month-on-month comparison, industrial import prices were 0.3% higher in November 2025. Compared with a year earlier, these prices in the EU were 2.4% lower in October 2025; they were 0.3% lower on the basis of a month-on-month comparison.
_ES202601.png)
In the 3rd quarter of 2025
- private final consumption expenditure increased compared with the previous quarter, up 0.1% in the euro area and 0.2% in the EU (after increases of 0.3% in the euro area and 0.4% in the EU in the previous quarter)
- government final consumption expenditure increased more strongly, up 0.7% in both the euro area and the EU (after increases of 0.4% in the euro area and 0.5% in the EU in the previous quarter)
- gross fixed capital formation (investment) increased quarter on quarter by 1.0% in the euro area and by 1.1% in the EU (after decreases of 1.7% in the euro area and 1.4% in the EU in the previous quarter).
In November 2025, the seasonally adjusted volume of sales in retail trade increased marginally compared with the previous month in the euro area (up 0.1%) and slightly in the EU (up 0.2%), following on from increases in the previous month in the euro area (up 0.3%) and the EU (up 0.2%).
_ES202601.png)
Source: Eurostat (namq_10_gdp and ei_isrr_m)
In November 2025, the unemployment rate was 6.3% in the euro area
In November 2025, the seasonally adjusted unemployment rate was 6.3% in the euro area, the 11th consecutive month in which this rate was recorded. In the EU, the rate was 6.0%, unchanged in seven months. Eurostat estimates that 11.0 million people in the euro area were unemployed in November 2025, among 13.2 million unemployed people across the EU. Compared with November 2024, unemployment in November 2025 was higher by 237 000 people in the euro area and higher by 416 000 people in the EU. In November 2025, the youth unemployment rate (for people aged 15 to 24 years) was 14.6% in the euro area, down from 14.8% in the previous month. In the EU, the rate was 15.1%, down from 15.2% in the previous month. In November 2025, the unemployment rate for people aged 25 years or older was 5.4% in the euro area (down from 5.5% in the previous month) and 5.1% in the EU (the 11th consecutive month at this rate).
In the 3rd quarter of 2025, the number of people in employment increased slightly compared with the previous quarter, up 0.2% in the euro area and 0.1% in the EU, following increases of 0.1% in the previous quarter in both the euro area and the EU. Compared with the 3rd quarter of 2024, employment in the 3rd quarter of 2025 was 0.6% higher in the euro area and 0.5% higher in the EU.
Compared with the previous quarter, hourly labour costs increased by 0.8% in both the euro area and the EU in the 3rd quarter of 2025; in the 2nd quarter of 2025, there had been increases of 1.0% in both the euro area and the EU. Compared with the 3rd quarter of 2024, hourly labour costs in the 3rd quarter of 2025 were 3.3% higher in the euro area and 3.7% higher in the EU.
In December 2025, employment expectations weakened in the euro area
In December 2025, the employment expectations indicator, as measured by business and consumer surveys, decreased (down 0.9 percentage points compared with the previous month) to 96.8 in the euro area; expectations were also down 0.9 percentage points in the EU to 97.9. The decrease in the euro area in December 2025 was due to less optimistic employment plans among construction and services managers and more pessimistic plans among retail trade managers outweighing less pessimistic plans among industrial managers.
_ES202601.png)
Source: Eurostat (namq_10_a10_e, ei_lmlc_q and ei_lmhr_m)
Interest rates
In December 2025, the ECB left key interest rates unchanged
On 18 December 2025, the Governing Council of the European Central Bank (ECB) decided to keep the 3 key ECB interest rates unchanged. Accordingly, the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility remained at 2.15%, 2.40% and 2.00%, respectively.
The euro area’s 3-month interest rate, the Euro Interbank Offered Rate (Euribor), increased marginally to 2.05% in December 2025, up from 2.04% in the previous month. Long-term interest rates (monthly average weighted 10-year government bond yields) of the euro area increased to 3.21% in December 2025 from 3.09% in the previous month. The EU’s long-term interest rates on government bonds increased to 3.54% in December 2025, up from 3.44% in the previous month.
Exchange rates
In December 2025 (compared with the previous month), the monthly averages of day-to-day exchange rates were as follows
- euro-US dollar: USD 1.1709 (up from USD 1.1560)
- euro-Japanese yen: JPY 182.50 (up from JPY 179.32)
- euro-Swiss franc: CHF 0.9332 (up from CHF 0.9290).
Latest macroeconomic forecasts
In January 2026, the IMF revised upwards its growth forecast for the euro area for 2025 to 1.4%
The latest available forecasts by 4 international organisations – the European Commission (EC) [1], the ECB [2], the Organisation for Economic Co-operation and Development (OECD) [3] and the International Monetary Fund (IMF) confirmed somewhat stronger economic growth (based on real changes in GDP) for the euro area in 2025 and 2026 than in 2024. Overall, the European Commission forecasted continued growth despite a challenging environment.
- In January 2026, the IMF revised upwards its forecast for euro area growth for 2025 to 1.4% (from 1.2% in its previous forecast); it revised upwards its forecast for 2026 to 1.3% (from 1.1%) and left unchanged at 1.4% its forecast for 2027.
- In December 2025, the ECB revised upwards its forecasted euro area growth for 2025 to 1.4% (from 1.2% in its previous forecast); it revised upwards its forecast for 2026 to 1.2% (from 1.0%) and its forecast for 2027 to 1.4% (from 1.3%).
- In December 2025, the OECD revised upwards its euro area growth forecast for 2025 to 1.3% (from 1.2% in its previous forecast); it revised upwards its forecast for 2026 to 1.2% (from 1.0%). It introduced a forecast of 1.4% for 2027.
- In its autumn 2025 report, the European Commission revised upwards its forecast for euro area growth for 2025 to 1.3% (from 0.9% in its previous forecast); it revised downwards its forecast for 2026 to 1.2% (from 1.4%). It introduced a forecast of 1.4% for 2027.
_ES202601.png)
In January 2026, the IMF maintained its inflation forecast for the euro area for 2025 at 2.1%
Annual inflation in the euro area is forecasted to slow in 2026, and then increase slightly in 2027.
- In January 2026, the IMF maintained its forecasted euro area annual inflation rate for 2026 at 1.9% and lowered its forecast for 2027 to 2.0% (from 2.1%).
- In December 2025, the ECB maintained its forecasted euro area annual inflation rate for 2025 at 2.1% (unchanged from its previous forecast); it raised its forecast for 2026 to 1.9% (from 1.7%) and lowered its forecast for 2027 to 1.8% (from 1.9%).
- In December 2025, the OECD maintained its forecasted euro area annual inflation rate for 2025 at 2.1%; it also maintained its forecast for 2026 at 1.9% and introduced a forecast of 2.0% for 2027.
- In its autumn 2025 report, the European Commission maintained its forecasted euro area annual inflation rate for 2025 at 2.1% (unchanged from its previous forecast); it raised its forecast for 2026 to 1.9% (from 1.7%) and introduced a forecast of 2.0% for 2027.
The latest European Commission forecast noted that the EU economy continues to generate modest but steady growth – at a faster than previously expected pace – amidst a rapidly shifting geopolitical and geoeconomic environment, which is further complicated by emerging domestic challenges. The global trade landscape is undergoing a significant transformation. The US trade deals with the EU and other trade partners have helped reduce the uncertainty that dominated the Spring Forecast, but the uncertainty has not been fully eliminated. A modest but steady expansion of domestic demand is expected to drive economic growth. EU growth is estimated to catch up with potential in 2025 and slightly outpace it in 2026 and 2027. Services and food price pressures are set to weaken gradually over the forecast horizon.
Read more under Latest forecasts indicated continued growth despite a challenging environment in the data visualisation.
Situation in the EU countries
In the 3rd quarter of 2025, Denmark recorded the largest expansion in GDP, at 2.2%
In the 3rd quarter of 2025, changes in GDP showed a generally upward development among the EU countries [4]. Based on the latest quarter-on-quarter rates of change, GDP increased in the 3rd quarter of 2025 in 21 countries, was unchanged in two and decreased in four. Denmark (up 2.2%) recorded the largest increase of GDP, while the decreases were observed in Ireland, Finland (both down 0.3%), Romania (down 0.2%) and Lithuania (down 0.1%).
In December 2025, Cyprus recorded the lowest inflation rate as consumer prices increased 0.1%
The highest annual inflation rate (based on the HICP) [5] in December 2025 was recorded in Romania (8.6%). The lowest inflation rates were recorded in Cyprus (0.1%), France (0.7%) and Italy (1.2%).
In November 2025, Malta, Czechia and Poland recorded the lowest unemployment rates, 3.1% or 3.2%
In November 2025, the lowest unemployment rates were recorded in Malta (3.1%), Czechia and Poland (both 3.2%). The highest rates were in Finland (10.6%), Spain (10.4%), Sweden (9.1%), Greece (8.2%) and France (7.7%).
In December 2025, economic sentiment was highest in Malta
In December 2025, the economic sentiment indicator showed a generally positive development among the EU countries, increasing in 17 and decreasing in 10. By far, the strongest increase was in Malta (up 8.6 percentage points), while the strongest decreases were in Luxembourg (down 5.1 percentage points) and Belgium (down 4.6 percentage points). Apart from these three countries, the latest month-on-month changes ranged between 5.9 and -1.8 percentage points. The index level of the economic sentiment indicator (with a long-term average = 100) generally varied from 89.0 percentage points in Denmark to 108.0 percentage points in Croatia, with the index in Malta (120.6 percentage points) well above this range.
Country in focus – Bulgaria
The economy in Bulgaria expanded in the 3rd quarter of 2025 (when compared with the previous quarter), up 0.7%. GDP was 3.2% higher in the 3rd quarter of 2025 than a year earlier.
Industrial production decreased month on month by 1.7% in November 2025, reinforcing a 2.3% decrease in the previous month. Overall, industrial production was 9.3% lower in November 2025 than a year earlier.
In December 2025, the economic sentiment indicator decreased by 1.0 percentage points to 100.5 percentage points.
Industrial producer prices were 1.6% higher in November 2025 than the previous month, building on a 4.6% increase in the previous month. Overall, these prices were 13.8% higher than a year earlier.
Annual inflation decreased to 3.5% in December 2025, down from 3.7% in the previous month; this rate had been 2.1% a year earlier (December 2024).
The volume of retail sales decreased month on month in November 2025, down 0.4%. These sales were 3.1% higher in November 2025 than a year earlier.
The unemployment rate in November 2025 was 3.5%, one of the lowest rates among EU countries. This rate was 0.1 percentage points lower than in the previous month. In November 2025, 104 000 people were unemployed in Bulgaria, of which 14 000 were young people (aged 15 to 24 years).
Source: Eurostat (namq_10_gdp, ei_isir_m and ei_bssi_m_r2) and DG Economic and Financial Affairs (ECFIN)
_ES202601.png)
_ES202601.png)
Source: Eurostat (namq_10_gdp and ei_isrr_m)
_ES202601.png)
Source: Eurostat (namq_10_a10_e, ei_lmlc_q and ei_lmhr_m)
Situation in the largest EU economies
In the 3rd quarter of 2025, five of the six largest EU economies recorded quarter-on-quarter expansions in GDP
- Among the six largest EU economies, Poland recorded the highest quarter-on-quarter growth rate for GDP in the 3rd quarter of 2025, up 0.9%. Germany (unchanged, 0.0%) recorded the lowest rate of change.
- In December 2025, the annual inflation rate was higher than in the previous month in one of the largest EU economies, up marginally from 1.1% to 1.2% in Italy. The inflation rate fell elsewhere. The highest annual inflation rate among these economies was recorded in Spain (3.0%), while the lowest rate was in France (0.7%).
- The latest unemployment rates are for November 2025: this rate was marginally lower than in the previous month in Spain and Italy and unchanged in the other four large economies. Spain recorded the highest unemployment rate (10.4%) and Poland the lowest (3.2%).
- Economic sentiment increased in the Netherlands and Poland in December 2025 and decreased in the other four large EU economies. The highest index level (with a long-term average = 100) was recorded in Spain (104.6 percentage points) and the lowest in Germany (90.1 percentage points).
Source: Eurostat (namq_10_gdp, ei_cphi_m, ei_lmhr_m and ei_bssi_m_r2) and DG Economic and Financial Affairs (ECFIN)
Country in focus – France
The economy in France expanded in the 3rd quarter of 2025 (when compared with the previous quarter), up 0.5%, extending a series of increases to three consecutive quarters. GDP was 0.9% higher in the 3rd quarter of 2025 than a year earlier.
Industrial production decreased month on month by 0.2% in November 2025, reversing an increase of the same size in the previous month. Overall, industrial production was 2.0% higher in November 2025 than a year earlier.
In December 2025, the economic sentiment indicator decreased, down 0.9 percentage points to 94.3 percentage points.
Industrial producer prices increased (up 1.1%) in November 2025 compared with the previous month. These prices were 3.3% lower than a year earlier.
The annual inflation rate was 0.7% in December 2025, down from 0.8% in the two previous months and 1.1 percentage points lower than the rate a year earlier (1.8%; December 2024). The inflation rate in December 2025 was the second lowest among EU countries.
The volume of retail trade sales increased 0.5% in November 2025 compared with the previous month. Compared with a year earlier, retail trade sales were 3.3% higher.
In November 2025, an unemployment rate of 7.7% was recorded, unchanged compared with the previous four months and the fifth highest rate among the EU countries. In November 2025, 2.4 million people were unemployed in France, of which 622 000 were young people (aged 15 to 24 years).
Source: Eurostat (namq_10_gdp, ei_isir_m and ei_bssi_m_r2) and DG Economic and Financial Affairs (ECFIN)
_ES202601.png)
_ES202601.png)
Source: Eurostat (namq_10_gdp and ei_isrr_m)
_ES202601.png)
Source: Eurostat (namq_10_a10_e, ei_lmlc_q and ei_lmhr_m)
International context
Situation in the EFTA countries
- Compared with the previous quarter, GDP contracted in the 3rd quarter of 2025 in Switzerland (down 0.5%) and Iceland (down 0.2%) while it expanded in Norway (1.1%).
- In December 2025, the annual inflation rate was 4.0% in Iceland (up from 3.4% in the previous month), 3.0% in Norway (up from 2.7%) and 0.2% in Switzerland (up from 0.0%).
- In November 2025, the unemployment rate was 4.6% in Iceland (up from 4.5% in the previous month) and 4.5% in Norway (up from 4.4%). The unemployment rate was 5.0% in Switzerland in September 2025.
_ES202601.png)
Source: Eurostat (namq_10_gdp, ei_cphi_m and ei_lmhr_m)
Situation in other non-EU countries
- Compared with the previous quarter, GDP expanded in the 3rd quarter of 2025 by 1.1% in both China and the United States, while it contracted by 0.6% in Japan. Compared with a year earlier (the 3rd quarter of 2024), GDP in the 3rd quarter of 2025 was 4.8% higher in China, 2.3% higher in the United States and 0.7% higher in Japan.
- In December 2025, the annual inflation rate was 2.7% in the United States (the same rate as in the previous month) and 0.8% in China (up from 0.7% in the previous month). In November 2025, the annual inflation rate was 2.9% in Japan.
- In November 2025, the unemployment rate was unchanged (compared with the previous month) at 2.6% in Japan while it was 4.6% in the United States (October data not available).
_ES202601.png)
Source: Eurostat (ei_lmhr_m) and the OECD
Source data for tables and figures
Data sources
On 1 January 2026, Bulgaria joined the euro area. As such, please note that the euro area data in this edition of Eurostatistics
- temporarily have a composition of 20 countries (without Bulgaria) for national accounts indicators, the economic sentiment indicator, employment expectations and the labour cost index
- have a composition of 21 countries (therefore including Bulgaria) for all short-term business statistics and unemployment
- are based on a changing (rather than fixed) composition of the euro area for inflation; as such, data for January 2026 will be the first to include data for Bulgaria.
Data for non-EU countries come either from Eurostat’s datasets or from an external source, such as the OECD Data Explorer.
OECD data for China, Japan and the United States
- GDP, quarter-on-quarter and year-on-year percentage change, seasonally and calendar adjusted (OECD – Quarterly real GDP growth – G20 countries)
- Inflation, year-on-year percentage change (OECD – Consumer price indices COICOP 1999 and COICOP 2018)
Eurostat data for Japan and the United States
- Unemployment rate, seasonally adjusted (ei_lmhr_m)
Macroeconomic forecasts
- European Commission Economic Forecast, see:
- ECB Macroeconomic Projections, see:
- IMF World Economic Outlook, see:
- OECD Economic Outlook, see:
Rates of change
For monthly data, 2 rates of change are presented
- M/M-1: change compared with the previous month
- M/M-12: change compared with the same month of the previous year.
For quarterly data, 2 rates of change are presented
- Q/Q-1: change compared with the previous quarter
- Q/Q-4: change compared with the same quarter of the previous year.
Context
This monthly article gives a picture of the macroeconomic situation in the euro area, the European Union (EU) and the EU countries, showing relevant indicators of production, demand, labour and prices, as well as interest and exchange rates. These are based on the principal European economic indicators (PEEIs). Note that rates of change for all monetary indicators (such as gross domestic product (GDP), industrial production and retail sales) are presented in real terms, in other words, after removing the impact of price changes.
The article is complemented by a data visualisation offering additional indicators and interactive graphs; it also includes links to source data. Looking for the freshest information? Real-time updates of data can be found in the form of graphs and tables in the Euro indicators dashboard with advanced functionalities to explore and download them.
The principal European economic indicators (PEEIs) represent a comprehensive set of infra-annual macroeconomic statistics aiming to describe the economic and labour market situation as well as price developments in the euro area, the EU and the EU countries; these statistics are of particularly high importance for economic and monetary policy.
The Communication of the European Commission to the European Parliament and the Council on euro area statistics Towards improved methodologies for euro area statistics and indicators of November 2002 defined the list of PEEIs and their timeliness targets, amended in the 2008 Economic and Financial Committee (EFC) report.
In 2002, Eurostat produced an initial list of 19 PEEIs, which subsequently expanded to 22. Data for these indicators are published regularly and posted in the thematic Euro indicators section on the Eurostat website. Since 2002, PEEIs have been regularly monitored and improved in terms of coverage and timeliness. The list of indicators includes, for example, GDP, private final consumption, the external trade balance and the 3-month interest rate.
The progress that has been achieved with the timeliness and availability of PEEIs and remaining challenges are constantly monitored. Each year Eurostat, in cooperation with the ECB, drafts a Status Report on Information Requirements in the Economic and Monetary Union (EMU) which is submitted to the EFC and then to the Economic and Financial Affairs Council (ECOFIN). All reports can be found in the thematic Euro indicators section under publications.
Footnotes
- Following the Council Decision (2025/1407/EU) of 8 July 2025 on the adoption by Bulgaria of the euro on 1 January 2026, in line with past practice, all forecast numbers for the euro area aggregate from 2026 will include Bulgaria. ↑
- From December 2025 onwards, the Eurosystem staff projections for the euro area include Bulgaria in view of its accession to the euro area on 1 January 2026. ↑
- The euro area aggregate includes only OECD member countries (Croatia, Cyprus and Malta are excluded from the euro area aggregate as they aren’t members of the OECD). ↑
- For further information, see Quarterly national accounts – GDP and employment. ↑
- For further information, see Annual inflation down to 1.9% in the euro area – December 2025. ↑