Q2 growth in advanced economies: Resilient despite multiple shocks

Shocks are mounting, but growth is holding up. Although GDP figures for the Eurozone, France, Germany and the United States are due to be published on 30 July, our nowcasts indicate that growth returned to its trend rate in the second quarter. This rate is approximately 1% per annum in the Eurozone, France and Germany, and 2% per annum in the United States. In Q2, the Eurozone is expected to benefit from sustained growth in Germany, with investment plans gaining momentum, while France is expected to see a rebound in exports and residential construction after a poor start in Q1. In the United States, growth is expected to remain driven by non-residential investment and household consumption but will be held back by strong imports.

Eurozone: A (fragile) resurgence in momentum

Following a first quarter marred by significant volatility in Irish statistics – assuming this does not disrupt Q2 GDP figures again – our nowcast points to a rebound in growth of +0.3% q/q in Q2 2026, in line with our forecast. This nowcast has been recently revised upwards due to improvements in the June PMI surveys and the (unfortunately temporary) fall in the price of Brent crude. Growth in the Eurozone is expected to be driven by Germany and the rebound in economic activity in France (see below). The resilience of the Eurozone labour market is likely to continue providing support for consumption, although household purchasing power is expected to fall by 0.9% q/q in Q2. This decline underscores the two headwinds facing households: geopolitical uncertainty and the temporary rise in inflation, both of which are expected to continue to dampen consumption and keep the savings rate at a high level.

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