According to a final estimate released on Friday by Eurostat, the EU’s statistical office, the eurozone GDP shrank by 0.2% in the first three months of 2026. The statistic represents a reversal of the 0.2% growth in the last quarter of 2025 and a significant decline from the 0.1% expansion shown in previous flash readings.
The eurozone’s economy increased by just 0.3% year over year at that time, compared to 1.2% the previous year. This slowdown is indicative of the growing strain of the Iran War, which continues to seriously harm European energy supply, business, and consumer confidence.
The largest economy in the union, Germany, had 0.3% growth in the first quarter following two years of persistent underperformance. Spain continued to lead the big economies with 0.6% growth, while Italy grew by 0.3%.
But France’s 0.1% contraction added to a pattern of weakness that existed before the current oil crisis.Pharmaceutical exporters are thought to have front-loaded shipments to the US ahead of tariff deadlines, inflating Irish output and, consequently, data for the entire eurozone. This is largely responsible for the first quarter decline.
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