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Quarterly To Annual GDP Growth: Don't Be Fooled By The Technicalities

Seeking Alpha
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⚡ Quantum Brief
Eurozone GDP growth will slow to 1.1% in 2026 from 1.4% in 2025, despite improving quarterly momentum later in the year, due to statistical carryover effects and fewer working days. The 2025 growth figure was artificially suppressed by one fewer working day compared to 2024, creating a mechanical distortion in annual comparisons. ING economists downgraded early 2026 forecasts citing Middle East tensions but anticipate gradual acceleration if Germany’s delayed investment plan—dubbed the "ketchup-bottle effect"—materializes. A rebound to 1.6% growth is projected for 2027, assuming sustained quarterly improvements and stabilization of geopolitical risks. The analysis warns against misinterpreting short-term fluctuations, emphasizing structural trends over technical distortions in GDP reporting.
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ING Economic and Financial Analysis5.23K FollowersFollow5ShareSavePlay(7min)CommentsSummaryEurozone growth is set to slow to 1.1% in 2026 from 1.4% in 2025, before an expected rebound to 1.6% in 2027, even as the quarterly pace is expected to improve towards the end of 2026.This mismatch is mechanical, driven by weaker carryover from late 2025 and calendar day effects.In 2025, annual growth was slightly dampened because the euro area had, on average, one working day less than the year before. AzmanL/E+ via Getty Images By Ruben Dewitte, Economist We trimmed our early 2026 quarterly growth path in light of Middle East tensions, but we still expect momentum to build quarter-by-quarter if the “ketchup‑bottle” effect of Germany’s investment plan kicksThis article was written byING Economic and Financial Analysis5.23K FollowersFollowFrom Trump to trade, FX to Brexit, ING’s global economists have it covered. Go to ING.com/THINK to stay a step ahead. We’re sorry we can’t reply to individuals' comments.Content disclaimer: The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.This publication has been prepared by ING solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. For our full disclaimer please click here.

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