Published on 5/30/2026
European economies began the year with a weak and uneven growth pace, as the euro zone’s gross domestic product grew by only 0.1% on a quarterly basis, and 0.8% on an annual basis, while the European Union economy grew by 0.2% quarterly and 1% annually, according to estimates of data from the European Statistics Agency (Eurostat).
The European Commission said in its economic growth forecasts for this spring that European economic activity suffered a new blow due to the US-Israeli war on Iran and the accompanying energy shock that reignited inflation and shook economic confidence, making the recovery more fragile than expected.
Despite the weak growth, the European labor market remained more cohesive than economic activity, as employment rose by 0.1% in both the euro area and the European Union during the first quarter, compared to the previous quarter, while it increased on an annual basis by 0.5% in the euro area and 0.6% in the European Union.
Major economies
Britain recorded one of the strongest readings of the major European economies, after its real gross domestic product grew by 0.6% in the first quarter, compared to growth of 0.2% in the last quarter of 2025, with the three main sectors contributing to growth, the services sector rising by 0.8%, production by 0.2%, and construction by 0.4%, according to the British Office for National Statistics.
In Spain, the economy continued to grow at a relatively strong pace within the euro zone, as the gross domestic product rose 0.6% on a quarterly basis in the first quarter, but it was slower by two tenths of a percentage point than the previous quarter, according to the preliminary reading issued by the National Institute of Statistics.
As for Germany, the largest economy in Europe, it recorded a growth of 0.3% on a quarterly basis, supported by a 3.3% increase in exports, but the internal picture seemed less strong. Household consumption stabilized, and gross fixed capital formation declined by 1.5%, with a decrease in investments in equipment and construction, according to the German Federal Statistical Office.
The Italian economy recorded limited growth of 0.2% on a quarterly basis and 0.7% on an annual basis in the first quarter, according to the preliminary estimate of the Italian National Institute of Statistics, which placed it among the economies that avoided contraction but remained close to the slow growth pace in the euro zone.
In France, the second largest economy in the Eurozone, the final reading was weaker than the initial estimate, as the gross domestic product contracted by 0.1% in the first quarter, with household consumption and exports declining, and unemployment rising to 8.1%, which showed that weak external and internal demand together put pressure on economic activity.
North and east
Denmark emerged among the strongest growing economies in the first quarter, after data from the Danish Statistics Authority showed a quarterly growth of 1.9%, a reading that clearly exceeds the average of the European Union and the Eurozone.
In Finland, the seasonally adjusted GDP grew 0.9% on a quarterly basis, and 1.3% on an annual basis, while the data showed a decline in employment and working hours, indicating that the improvement in output was not reflected with the same force in the labor market.
Slovenia recorded a seasonally adjusted quarterly growth of 0.7% and an annual increase of 3%, driven by a 3.7% increase in domestic spending and a 12.6% jump in fixed capital formation.
In Poland, the seasonally adjusted GDP grew 0.5% on a quarterly basis, and 3.4% on an annual basis, according to a rapid estimate issued by the Polish Statistical Office, keeping Warsaw among the fastest growing European economies compared to the European Union average.
Switzerland, which is outside the European Union, recorded a growth of 0.5% in the first quarter, according to a rapid estimate by the State Secretariat for Economic Affairs, which indicated the contribution of the industrial and service sectors to growth.
Within the European Union, Eurostat data showed that Hungary recorded quarterly growth of 0.8%, Bulgaria 0.7%, and Estonia 0.6%, which are readings that exceeded the European Union average, and placed a number of Central and Eastern European economies in a better position than some major economies.
Limited growth
In the Netherlands, GDP rose only 0.1% on a quarterly basis, and 1.2% on an annual basis, with support from government investment and consumption, while the contribution of exports remained negative, according to the Dutch Statistics Office.
Eurostat data showed that Belgium, the Czech Republic, Austria, Cyprus and Slovakia each recorded quarterly growth of 0.2%, while Portugal did not achieve growth, which reflects the widening circle of economies that avoided technical recession but remained stuck in an extremely weak growth zone.
In Croatia, the official statistics office announced that the real gross domestic product rose 2.2% on an annual basis in the first quarter, in continuation of the country’s annual growth path, but the reading published so far remains annual and does not provide a seasonally adjusted quarterly comparison within the available data.
Shrinkage pockets
Ireland was among the weakest readings for the first quarter in Eurostat data, with a quarterly contraction of 2% and an annual decline of 6.3%. These are figures that the Irish Central Statistics Office warns should be treated with caution because they are issued as part of an early series that uses new sources and methods and may be subject to revisions.
Lithuania recorded a quarterly contraction of 0.4% despite annual growth of 2.5%, while the economies of Sweden and Romania contracted by 0.2% each on a quarterly basis, according to Eurostat data, which reflects that the weakness of the first quarter was not limited to southern Europe or the major economies only.
