Economy in Focus #16 - Europe’s economy in transition: 2025 summary and the outlook for 2026

As Europe moves from turbulence towards transition, uncertainty continues to shape growth prospects and financial conditions. In this edition of Economy in Focus, Intrum Senior Economist Anna Zabrodzka-Averianov examines the key forces influencing Europe’s economy in 2025 and the outlook for 2026. The 16th edition was published in January 2026.

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Europe at a turning point

After several years of economic disruption, Europe enters 2026 at a critical juncture. Growth expectations have improved in parts of the region, but progress remains uneven as inflation, interest rates and global uncertainty continue to influence economic conditions.

Key risks shaping the outlook

Household finances remain under pressure, financial conditions are still restrictive and geopolitical tensions continue to weigh on confidence. Together, these risks shape consumption patterns, investment decisions and the overall resilience of Europe’s economy.

Looking ahead to 2026

As Europe moves further into a period of transition, the economic outlook for 2026 remains uncertain. The pace of recovery will depend on how effectively inflationary pressures ease, financial conditions normalise and external risks evolve.

Anna Zabrodzka-Averianov, Senior Economist at Intrum

Comment from Intrum's Senior Economist:

"A sharper deterioration in global trade conditions, stronger currency appreciation or other shocks that could prolong a persistent weakness in consumer confidence could materially weigh on the recovery, underscoring the fragile nature of the current outlook.”

2025: fragile recovery under persistent uncertainty

Europe enters 2026 with tentative signs of stabilisation but the recovery remains fragile. Easing inflation has yet to translate into stronger demand, as tight financial conditions and weak confidence continue to weigh on households and businesses. Ongoing geopolitical tensions and global uncertainty leave the outlook vulnerable to renewed shocks ahead.

2026: slow but improving growth, conditional on stability

Growth in 2026 is expected to improve gradually, supported by easing inflation and more favourable financial conditions. However, the pace of recovery remains dependent on sustained macroeconomic and geopolitical stability. Any renewed shocks to energy markets, trade or confidence could delay momentum and keep growth below potential.

Insights into Europe’s economic transition

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Previous editions of Economy in Focus:

Economy in Focus #15 - Beyond Inflation: Lingering Strains on Europe’s Households

As Europe shows tentative signs of stabilisation, the aftermath of the cost-of-living crisis continues to weigh heavily on households and businesses. This edition of Economy in Focus examines why recovery remains fragile and uneven, exploring persistent price pressures, late payments, and the limits of government support across the region.

Economy in Focus #14 - Bracing for impact: Europe in a new trade era

As the global economic order shifts once again, businesses across Europe face a renewed wave of uncertainty. This edition of Economy in Focus explores the growing implications of escalating trade tensions, geopolitical instability, and slowing economic momentum—set against the backdrop of Donald Trump’s return to the US presidency and a resurgence of protectionist tariffs.

Economy in Focus #13 - 2025 outlook: Triumph or turmoil?

What key trends is shaping the macroeconomic landscape in Europe as we move into 2025? From central banks managing interest rate cuts to governments implementing fiscal tightening and the increasing influence of geopolitical uncertainty, the year ahead presents a complex economic picture. The potential for both growth and disruption highlights the importance of strategic planning in a rapidly evolving global economy.

Economy in Focus #12 - 2024 year-in-review: The tides are turning

Intrum’s Senior Economist, Anna Zabrodzka-Averianov, reflects on the key trends that have shaped the macroeconomic landscape in Europe throughout 2024. From central banks navigating interest rate cuts to an uneven economic recovery and the recalibration of artificial intelligence (AI) investments, this year has underscored the complexities of restoring stability in a rapidly evolving world.

Economy in Focus #11 - The state of corporate and household credit in the EU

In the latest edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, delivers key insights into the pressing issues surrounding corporate and household indebtedness in the EU.

Economy in Focus #10 - AI’s impact on macroeconomy

In the 10th edition of Economy in Focus, discover how Generative AI is revolutionising productivity and reshaping global economic landscapes. This in-depth report explores the transformative potential of AI technologies, their impact on markets, and the challenges they bring. Published in June 2024.

Economy in Focus #9 - Household savings and investments in a new age

In the 9th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, explores how European household savings and investment patterns are shifting in a post-pandemic world. This report was published in April 2024.

Economy in Focus # 8 - 2024 outlook: What to expect and prepare for

In the 8th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, offers a detailed outlook on the economic challenges and opportunities expected in 2024. This report, published in January 2024, examines inflation, credit tightening, and recovery scenarios.

Economy in Focus #7 - 2023 in Review – An economic potpourri

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Economy in Focus #6 - NPLs: A Decade-Long European Headache

In the 6th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, delves into the decade-long challenge of non-performing loans (NPLs) across Europe. This report explores the impacts of NPLs on the European economy and the strategies for addressing them. Published in September 2023.

Economy in Focus #5 – Four key challenges that European companies face

In the 5th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, examines the four key challenges that European companies face, including revenue disruptions, inflation fears, wage-setting struggles, and cost-cutting measures. Published in June 2023.

Economy in Focus #4 – Employment remains strong in Europe

In the 4th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, discusses Europe’s resilient labour market amidst economic challenges. The report highlights stable employment, falling real wages, and rising consumer confidence. Published in April 2023.

Economy in Focus #3 – Downturn on the housing market

In the 3rd edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, provides insights into the downturn in Europe’s housing market, with a particular focus on the impact of rising interest rates on household debt. Published in February 2023.

Economy in Focus #2 – Generation X worst off

In the 2nd edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, explores the record-low consumer confidence in Europe, the impact of rising inflation, and how Generation X is most affected. Published in December 2022.

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In the 1st edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, discusses the record-high inflation levels across Europe, the sharp rise in energy prices, and the impact on consumer confidence. Published in September 2022.

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