Europe’s fastest-growing economies in Q2 2026: Who led and who lagged?
Eurozone GDP delivered a better-than-expected performance in the second quarter of 2026. But beneath the headline, Europe’s growth story looks increasingly uneven across member states.
The eurozone economy was expected to lose momentum in the second quarter of 2026.
Instead, it surprised to the upside.
Eurostat's preliminary estimate showed GDP expanding by 0.4% quarter-on-quarter, up from flat growth in the first quarter and ahead of economists' expectations for a 0.2% increase.
Across the European Union, growth accelerated to 0.5%, from 0.1% previously. Annual growth also strengthened, reaching 1.0% in the euro area and 1.2% across the EU.
At first glance, the figures suggest the bloc is proving more resilient than feared despite higher energy prices and continued geopolitical uncertainty.
But the headline hides a much more interesting story.
Growth is becoming increasingly uneven.
Ireland, Lithuania and Sweden led European growth
"The Eurozone economy blew past the consensus in Q2 and was even stronger than our above-consensus forecast, despite the energy price shock triggered by the US-Iran war," commented Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.
Among the countries that have already released second-quarter data, Ireland posted by far the strongest quarterly expansion, with GDP surging 3.9%.
According to Pantheon Macroeconomics’ calculations, the rebound in Ireland alone added 0.1 percentage points to headline eurozone growth.
It was followed by Lithuania, where the economy grew by 1.7%, and Sweden, which expanded by 1.4%.
Southern Europe also remained resilient. Portugal recorded 0.8% quarterly growth, while Spain continued to outperform the eurozone's largest economies with a 0.7% expansion.
At the other end of the ranking, Belgium and Austria stagnated, recording no growth during the quarter.
Germany, France and Italy all expanded, but at a slower pace than previously.
Europe's largest economy shows slower expansion
Germany's economy grew by 0.2%, slowing from 0.4% in the first quarter but still outperforming market expectations of 0.1%.
Pantheon Macroeconomics’ Vistesen said the data leave "a picture of resilience in the first half of the year", helped by upward revisions to previous quarters.
The composition of growth was equally revealing. "Net exports were the main driver of Q2 GDP growth, while consumption slowed and investment fell," Vistesen said, suggesting Germany is relying more on foreign demand than domestic spending to keep its economy expanding.
France also returned to growth, with GDP rising by 0.2% after contracting in the previous quarter.
Yet the details were less convincing.
Vistesen said "the rebound in GDP growth is encouraging, but the details are less so, particularly for investment", pointing to weak capital spending despite a recovery in consumer demand.
If there was one large economy that continued to defy expectations, it was Spain.
GDP accelerated to 0.7%, extending a run that has consistently outpaced its eurozone peers.
"The Spanish economy appears to have been unscathed by the energy shock so far," said Ankita Amajuri, Europe economist at Pantheon Macroeconomics.
Strong household spending, resilient exports, fiscal support and the country's growing renewable energy capacity have all helped cushion consumers from rising energy prices.
Italy also expanded by 0.2%, slowing from 0.3% but beating expectations of 0.1%.
Amajuri cautioned that "Italy's economy is more vulnerable to the recent surge in energy prices than Spain's", making it one of the eurozone economies most exposed if energy costs remain elevated through the second half of the year.
A stronger eurozone, but inflation is stirring again
Taken together, the latest figures suggest the eurozone entered the summer on firmer footing than many economists had expected.
But they also point to a bloc growing at different speeds. Ireland recorded the strongest quarterly growth, Spain remains the strongest of the major economies, while Germany, France and Italy are expanding at a much more modest pace.
Just as growth appears to be regaining momentum, another challenge is beginning to re-emerge.
Early inflation readings for July suggest price pressures are picking up again across parts of Europe.
Pantheon Macroeconomics estimates German headline inflation rebounded to around 2.7% in July from 2.3% in June, after regional data showed stronger price growth in Bavaria, North Rhine-Westphalia, Saxony and Hesse.
Spain also reported firmer inflation. Preliminary data showed consumer prices rose by 3.5% year-on-year in July, up from 3.2% in June and the highest reading since May 2024. Core inflation, which strips out energy and unprocessed food, edged up to 3.0%.
Attention now turns to Thursday's eurozone inflation release, with economists expecting annual inflation to edge up to 2.9% in July from 2.8% in June.
If those trends persist, the European Central Bank may keep the door open to another interest rate increase after the summer.
