Euro area GDP grows 0.4% in Q3 2026, beating forecasts as France contracts

Europe's economy is slowing, but not as much as economists feared. Seasonally adjusted GDP in the euro area grew 0.4% in the third quarter of 2026 versus the previous quarter, according to Eurostat's preliminary flash estimate published on Oct. 30, 2026. That is down from 0.6% in the second quarter, but above the 0.2% forecast in a Reuters poll of economists, CNBC reported.

Year on year, euro area GDP rose 1.3%, after 1.2% in the second quarter. The wider EU grew 0.5% quarter on quarter and 1.5% year on year, Eurostat said.

France is the weak spot

France's economy shrank 0.1% in July–September, and its year-on-year rate turned negative at -0.1%, per Eurostat. CNBC described a country "grappling with soaring borrowing costs as investors balk at a political struggle to reduce its high budget deficit and mounting national debt," with nationwide unrest over the cost of living in October.

Lithuania posted the steepest decline at -1.0%. Italy was flat at 0.0%. On the other side, Ireland led with +5.5%, a figure Eurostat flags as experimental and volatile, followed by Estonia, Spain and the Netherlands at +0.6% each.

Energy shock in the background

The data came a day after the European Central Bank kept its deposit rate at 2.5% on Oct. 29, 2026. The ECB said energy prices "have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook," and that euro area inflation rose to 3.8% in September.

"The outlook for 2027 is complicated by the prospect of further inflationary pressures," Joe Nellis, head of economic research at MHA, told CNBC. Eurostat stressed the flash figures are based on incomplete data covering 96% of euro area GDP; the next estimate for the quarter is scheduled for Nov. 13, 2026.