Eurozone: Firmer growth and eventual ECB hikes – BNP Paribas

FXStreetMar 23, 2026 3:52 PM

View all comments（0）



BNP Paribas projects Eurozone growth at 1.6% in 2026, supported by German fiscal measures, higher military and AI-related investment, and a resilient labour market. Inflation is expected to stay below 2% in 2026 before gradually accelerating in 2027. This would prompt the ECB to raise the deposit facility rate to 2.5% in the second half of 2027.

Growth support sets stage for ECB

"After holding up well in 2025 (1.5%), growth is expected to strengthen in 2026 (+1.6%)."

"The roll-out of fiscal measures in Germany and the planned increase in military spending and AI-related investment in Europe, against a backdrop of labour market resilience, underpin this scenario."

"Inflation is expected to remain below the 2% target in 2026."

"Stronger economic activity will lead to a progressive acceleration in inflation in 2027, albeit a moderate one."

"This would lead the ECB to increase the policy rate in H2 2027, bringing the deposit facility rate to 2.5%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

Comments (0)

Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.

Commenting Guidelines

Recommended Articles

Lam Research Stock Forecast: Record Quarter Fails to Stop a Premarket Slide Below $242.80 Support

TradingKey - Lam Research stock forecast: LRCX slides premarket despite a record quarter, as supply limits cap the December guide and $242.80 support comes under test.

Memory Stocks Fall Over 4% as Micron Drops Below $900, Risking Another 16% Fall to Retest Lows

Memory stocks fell around 4% across the board as Micron lost its $900 support level, while technical indicators raised alarms for a 16% retest of the low.

Tesla Q3 Operating Profit Plunges 56% YoY, Dragged Down by Higher Operating Expenses Including R&D

Tesla (TSLA) reported its third-quarter 2026 financial results, with revenue coming in slightly above market expectations and automotive gross margin improving, though higher operating expenses such as R&D weighed on profits. Meanwhile, the company disclosed that the Cybercab has joined its Austin Robotaxi fleet and Optimus has entered production.

Meta Q3 Net Profit Surges 264% YoY, Raises Full-Year Capex Slightly; Shares Briefly Rise Over 4% After Hours

Meta Platforms (META) saw its stock jump over 4% after releasing its third-quarter 2026 earnings report on October 21 Eastern Time. As of press time, the gain had narrowed to 2.86%, with the stock trading at $717.47. During the period, Meta's advertising business achieved gains in both volume and pricing, driving revenue above market expectations, though litigation costs weighed on operating profit. The company also narrowed its full-year capital expenditure guidance range. In the third quarter, Meta reported revenue of $64.601 billion, up 26% year-over-year and beating market expectations of $63.2 billion; on a constant currency basis, revenue also grew 26%.

US Stocks Close: Nasdaq Gains Over 1%, Philadelphia Semiconductor Index Rises Nearly 2%; Tech Stocks Strengthen, SpaceX Gains Nearly 8% Post-Earnings

On Wednesday, October 21, Eastern Time, tech stocks rallied, driving the three major U.S. stock indices higher. SpaceX's third-quarter financial results and news of its merger discussions with Tesla became the market focus, while AI-related stocks rebounded in tandem. At the close, the Dow Jones Industrial Average rose 0.69% to 52,856.09, the Nasdaq Composite Index gained 1.05% to 26,702.86, and the S&P 500 Index advanced 0.58% to 7,757.17.

Featured Tools