Executive Summary 1

PART I: Economic outlook for EA and EU 7

1. Setting the scene 8

2. International environment 14

3. Financial conditions in the EU 21

4. Economic activity 25

5. Labour market 36

6. Inflation 43

7. Scenario analysis 53

8. External transactions 57

9. Public finances and the fiscal policy stance 60

10. Risks 66

PART II: Special Issues 75

1. How climate policies and energy shocks accelerated reduction in EU energy demand 77

2. The AI-adoption divide: Who benefits, who doesn’t, and what it means for workers 85

PART III: Prospects by individual economy 89

Euro Area Member States 91

1. Belgium: 92

2. Bulgaria: 94

3. Germany: 96

4. Estonia: 98

5. Ireland: 100

6. Greece: 102

7. Spain: 104

8. France: 106

9. Croatia: 108

10. Italy: 110

11. Cyprus: 112

12. Latvia: 114

13. Lithuania: 116

14. Luxembourg: 118

15. Malta: 120

16. The Netherlands: 122

17. Austria: 124

18. Portugal: 126

19. Slovenia: 128

20. Slovakia: 130

21. Finland: 132

Non-EA Member States 135

22. Czechia: 136

23. Denmark: 138

24. Hungary: 140

25. Poland: 142

26. Romania: 144

27. Sweden: 146

Candidate Countries 149

28. Albania: 150

29. Bosnia and Herzegovina: 152

30. Georgia: 154

31. Moldova: 156

32. Montenegro: 158

33. North Macedonia: 160

34. Serbia: 162

35. Türkiye: 164

36. Ukraine: 166

Other non-EU Countries 169

37. The United Kingdom: 170

38. The United States: 172

39. Japan: 174

40. China: 176

41. EFTA: 178

42. Russian Federation: 181

43. India: 183

Statistical Annex 187

Previous European Economic Forecast 223