The eurozone has sharply slowed, expanding only at 0.8% year-on-year during the 1st quarter of ’26. Yet, the three economies are growing faster than the bloc as a whole. So, the eurozone economic growth has been disappointing.
Eurostat’s 2nd estimate published on Wednesday, 13 May ’26, shows that gross domestic product in the euro area expanded by only a mere 0.1% during the 1st quarter of ’26. When compared to the previous quarter, the growth rate was only 0.8% year-on-year.
This reflects a sharp deceleration from 1.3% in the 4th quarter of ’25. This figure is nearly a full percentage point below the level where the bloc started the year.
The wider European Union (EU) fared marginally better at 0.2% quarter-on-quarter & 1.0% annually. Both readings stay well behind the United States (U.S.), where GDP grew 2.7% year-on-year over the same period.
However, beneath the bloc-wide slowdown, a small group of economies seems to be pulling sharply away from the average. 3 EU members with available 1st-quarter data stand out as clear winners. They are Cyprus, Bulgaria & Spain.
Each seems to be expanding at more than triple the eurozone pace. Each seems to be also navigating a varied set of risks beneath the headline quantum.
Cyprus tops the EU at 3.0%
The island’s economy expanded by 3.0% year-on-year during the 1st quarter of ’26. This is the highest reading among EU members with available first-quarter figures. It rates Cypriot growth at nearly 4 times the eurozone average.
However, it’s a slowdown from the 4.3% reflected in the 4th quarter of ’25. That had been the fastest annual pace in 3 years & the 2nd fastest in the EU at that time. The drivers of the underlying expansion seem familiar.
The European Commission’s autumn ’25 forecast credits robust private consumption. This growth accelerates investment supported by EU Recovery & Resilience Facility funds. The forecast was supported by a record-breaking tourism season.
The Commission projects full-year GDP growth of 2.6% in ’26, reducing it by 0.2% to 2.4% in ’27. These are both above the eurozone average.
