Frankfurt: The International Monetary Fund (IMF) has released a sobering update on the economic outlook for the eurozone, warning that while growth remains surprisingly resilient, it comes at the expense of escalating fiscal burdens. In its latest World Economic Outlook, the IMF projects the euro area’s GDP growth at 1.2% for 2025, slightly above July forecasts, but expects a modest slowdown to 1.1% in 2026.

The IMF attributes this relative resilience to recovering private consumption, supported by higher real wages, and targeted fiscal easing measures in Germany. However, the report highlights that these gains are partially offset by rising government spending, particularly Germany’s investments in defense and infrastructure, which are expected to lift the eurozone’s debt-to-GDP ratio

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