Economies Europe

• The Eurozone GDP performed better than expected in Q2 2026, though growth remained uneven across member states. • Lithuania led the expansion with 1.7% growth, followed by Sweden at 1.4%, while Portugal (0.8%) and Spain (0.7%) showed continued resilience in Southern Europe. • Economic stagnation occurred in Belgium and Austria, while major economies including Germany, France, and Italy experienced a slowdown in their growth rates.

• The IMF forecasts that ten European economies, including Malta and Kosovo, could grow twice as fast as the eurozone through 2031. • Kosovo is projected to grow nearly 4% annually on average, though growth is expected to dip to 3.6% in 2025 and 3.3% in 2026 due to political deadlock. • Economic resilience in Kosovo is driven by a young workforce, public investment, and significant remittances from the diaspora in Germany and Switzerland.

• The IMF forecasts that the eurozone will grow by just over 1% annually through 2031, though smaller European economies are expected to significantly outperform this average. • Malta leads the medium-term growth rankings with an expected annual increase of nearly 4% over the next five years. • Ukraine is also projected to outpace the eurozone by more than two to one, driven by diaspora remittances from Germany and Switzerland, public infrastructure spending, and a growing banking sector.