Phoenix 24
Italy stagnates while Spain remains comparatively resilient.
WASHINGTON, UNITED STATES — July 2026. The International Monetary Fund expects Italy’s economy to grow by only 0.5 percent in both 2026 and 2027, reflecting weak consumption, elevated energy costs and persistent uncertainty. Although investment linked to the country’s recovery plan continues to support activity, the overall expansion remains limited. The IMF also warned that inflationary pressures could persist because of Italy’s dependence on imported energy.
France received one of the most significant downward revisions among Europe’s largest economies. Growth is now projected at 0.6 percent in 2026 before improving to 0.9 percent in 2027. Germany is expected to expand by 0.7 percent this year and 1 percent next year. The eurozone as a whole faces a subdued recovery marked by weak demand and limited industrial momentum.
Spain remains one of the strongest performers within the European Union, with projected growth of 2.1 percent in 2026 and 1.8 percent in 2027. Its expansion continues to exceed the rates expected for Italy, France and Germany. The figures highlight the growing divergence between the eurozone’s more dynamic economies and its traditional industrial powers.
At the global level, the IMF expects growth to remain close to 3 percent in 2026 before accelerating in 2027. Energy prices, geopolitical tensions and possible disruptions to international trade remain among the main risks. Persistent inflation could also restrict the ability of central banks to reduce interest rates rapidly.
The Fund urged European governments to strengthen productivity, rebuild fiscal capacity and improve energy security. It also emphasized the importance of structural reforms and investment in digitalization and artificial intelligence. Europe enters the second half of 2026 with modest growth and limited room for policy mistakes.
Europe’s recovery continues, but its largest economies are losing momentum.