After the significant impact of US tariff policy had to be overcome in the first and second quarters of 2025, the fourth quarter in particular was surprising in a positive way. On an annual basis, real GDP growth for the euro area was 1.5%. Spain again reported good growth figures, and Germany was able to break free from stagnation in the third quarter.
After two recessionary years in Austria, a slow recovery continued, adding up to real GDP growth of 0.6% in 2025. Private consumption recovered in the fourth quarter and public consumption remained supportive. The export situation also eased in the final quarter.
Stable and even moderately increasing consumer sentiment and investment brought real GDP growth for Central and Eastern Europe (CEE) to a regional average of 2.3% for the year. Poland and Croatia were at the upper end with projected GDP growth of 3.6% and 3.2%, respectively, while Hungary and Slovakia were at the other end with 0.4% and 0.8%, respectively.
The euro area ended 2025 on an inflation rate of 2.1%. Driven by continuing high core inflation (service providers) and energy prices, inflation in Austria rose to 3.6% for the year as a whole (2024: 2.9%). At 4.1% (2024: 3.7%), inflation in CEE was also significantly above the previous year’s level and the euro area average. Romania recorded the highest inflation rate at 7.3% and Slovenia the lowest at 2.4%.