According to the latest release by the European Commission, the European Union’s GDP growth rate for Autumn was 1.4% with the estimate for the end of the year marked closer to 1.5%. The Euro area is set to grow at the lower rate of 1.3%. Malta has retained the highest economic growth forecast for 2026 by 3.8% of the GDP. Average growth for the EU in 2026 is forecasted at 1.6%.
Inflation is forecast to continue easing towards the European Central Bank’s target, with euro-area consumer price growth expected to average 2.1% in 2025 and 1.9% in 2026, after its 2.4% peak of this year. Inflation in Malta remains above the EU average with pressures particularly coming from food prices.
Following Malta in forecasted economic growth is Poland at 3.5% and Lithuania at 3%. Ireland has the lowest forecast at 0.2% followed by Italy at 0.8% and France at 0.9%.
Public finances in the EU are set to come under more pressure next year as the aggregate value of the deficit will rise from 3.1% of GDP in 2024 to 3.4% in 2027. The Commission said that risks remain to the downside especially due to trade tensions, conflicts and wars and supply shocks.
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