Eurozone Q2 growth revised up to 0.6% ahead of ECB rate decision

The Eurozone economy grew faster than previously estimated in the second quarter of 2026, with final data from Eurostat on Monday showing a 0.6% quarter-on-quarter expansion — up from a preliminary reading of 0.4%. The revision marks the strongest quarterly growth since Q2 2022 and follows near-stagnation in the first three months of the year.tradingview+2

On an annual basis, GDP growth accelerated to 1.2%, beating the second estimate of 1.0% and exceeding market expectations.ua+1

Ireland Drives the Revision

The upward revision was largely triggered by Ireland, which reported a 10.2% quarterly surge in output — sharply higher than an earlier reading of 3.9%. The jump was attributed to a strong performance by multinationals including Apple ↘ 0.52% and Eli Lilly ↘ 0.79%, according to Bloomberg.theedgemalaysia+1

Among the bloc's larger economies, Spain led with 0.7% growth, while Germany's expansion was revised up to 0.3% from 0.2%. France fared worse than initially thought, with growth revised down to flat from 0.2%. Austria was the only member state to contract, shrinking by 0.1%.tradingview+3

Trade Leads, Domestic Demand Lags

Net trade was the dominant contributor, adding 0.9 percentage points to growth as exports jumped 3.4%, outpacing a 1.5% rise in imports. Household consumption contributed a more modest 0.2 points, while fixed investment and government spending had negligible effects. Changes in inventories subtracted 0.5 points.tradingview

The data paint a picture of an externally driven recovery, with domestic demand and investment remaining soft even as massive spending on artificial intelligence and defense provides a counterweight to energy price pressures stemming from the Iran war.investing+1

ECB Rate Decision Looms

Monday's GDP release is the last major data point before the European Central Bank sets interest rates on Thursday. Investors widely expect a quarter-point hike as policymakers seek to contain energy-driven inflation, which sits at a three-year high.theedgemalaysia+1

Analysts including Bantleon's Daniel Hartmann now expect full-year growth above 1%, well above the ECB's June forecast of 0.8%. Economists at JPMorgan Chase ↘ 0.84%, BNP Paribas, and Société Générale have recently added a year-end rate hike to their outlooks.theedgemalaysia