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Eurozone outlook 2026: Resilience amidst headwinds
The Eurozone economy outperformed expectations in 2025, supported by resilient household consumption from real wage gains and a tight labor market. Frontloaded trade flows due to tariffs and a smaller-than-expected investment pullback added momentum. In the very short term, however, demand is expected to soften as the labor market is gradually cooling, frontloading continues to be reversed, and Chinese demand for European goods is likely to soften further. Beyond the very short term, structural challenges and potential headwinds are competing with resilience and potential tailwinds. Combined, these factors tend to ... (full story)