Euro area: Modest GDP growth and mixed inflation - Societe Generale

Societe Generale’s research team expects Euro area Gross Domestic Product (GDP) for 3Q26 to grow modestly, highlighting resilience despite high energy prices and adverse summer weather. Country-level forecasts show Spain leading, followed by France and Italy, with Germany flat. The bank also anticipates divergent national inflation paths driven by fuel support measures and differing exposure to natural gas prices.

Resilient growth with mixed inflation

"The focus will be on the flash release of euro area GDP for 3Q26. We expect it to show growth of 0.2% qoq and 1.1% yoy, underscoring the theme of resilience in the face of persistently high energy prices across the bloc, but also reflecting adverse weather effects during the summer months."

"At the country level, we expect Spain to continue to outperform (+0.6% qoq), followed by France (+0.2%) and Italy (+0.1%), while activity should be flat in Germany."

"On the inflation front, all four major euro area countries will publish their flash inflation estimates."

"On the downside, both Germany (3.3% yoy to 3.0% yoy in October) and Spain (5.0% yoy to 4.7% yoy in October) should benefit from fuel support measures coming into effect."

"Conversely, Italy's high exposure to rising natural gas prices means we expect inflation to increase by 0.5pp to 4.7% yoy."