European Growth: Weak and Wavering

In the second part of a Europe mini-series, the focus shifts to the region’s growth outlook as the Middle East conflict weighs on momentum. Higher oil prices have led to downward revisions in growth forecasts, though the eurozone remains in a fragile expansion. Underlying domestic demand is soft: consumers remain cautious, investment is weak, and export strength reflects temporary front-loading. The episode also examines risks from prolonged oil disruptions, tighter financial conditions, and structural trade challenges, alongside potential support from fiscal policy and AI. The conclusion is that Europe is exposed to significant headwinds. Questions or Comments, please email us at GEU@Moodys.com. We would love to hear from you. To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.