IMF Concludes 2026 Consultation with Euro Area, Projects Slower Growth and Higher Inflation

The IMF Executive Board concluded its 2026 consultation with the Euro Area, projecting a slowdown in growth to 0.9% in 2026 and a rise in headline inflation to 2.9% for the same year, primarily due to the war in the Middle East. The report also highlighted the need for continued monitoring of vulnerabilities in the banking system and from non-bank financial institution (NBFI) activity, while noting the banking system's overall resilience.