Europe’s economy was projected to grow by 1.5 per cent in 2026 and 1.6 per cent in 2027, as high energy costs, elevated trade barriers and weak productivity constrained expansion, according to the International Monetary Fund (IMF). The Fund urged policymakers to accelerate reforms supporting innovation, business expansion and energy resilience to strengthen the region’s growth prospects. In its October 2026 Regional Economic Outlook: Europe , titled ‘Choosing Growth: Reforms for Innovation, Scale, and Resilience’, the IMF said economic activity had held up despite successive shocks. However, geopolitical uncertainty, rising sovereign borrowing costs and mounting defence and other public spending pressures left growth fragile.
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