The euro zone economy grew faster than initially estimated in the second quarter of 2026, according to revised figures, suggesting the bloc has shown greater resilience to the energy shock linked to the Iran war than previously expected.
Eurostat said gross domestic product across the 21-country euro zone increased by 0.6% between April and June, up from an earlier estimate of 0.4%. The bloc had recorded no growth during the first quarter of the year.
Ireland was a major factor behind the upward revision. Its economy expanded by 10.2% in the second quarter, compared with an earlier estimate of 3.9%.
However, Ireland’s GDP figures can be heavily influenced by the activities of multinational companies based in the country. Large pharmaceutical and technology firms can cause significant changes in national output through accounting operations, intellectual property transfers and other activities.
The scale of these effects means some economists prefer to exclude Ireland when assessing underlying economic trends across the euro zone.
Germany, the bloc’s largest economy, also recorded stronger growth than previously reported. Its GDP increased by 0.3% between April and June, compared with an earlier estimate of 0.2%.
The improved economic performance comes as the euro zone faces renewed pressure from rising energy prices. Inflation reached a three-year high of 3.3% in August, significantly above the European Central Bank’s 2% target.
Renewed fighting in the Middle East has pushed up energy costs, adding to concerns over the inflation outlook. The ECB is expected to consider another interest rate increase when policymakers meet on Thursday.
Ireland’s latest figures illustrate the difficulty of assessing the country’s economic performance through GDP alone. Data from the Central Statistics Office showed that the domestic economy contracted by 0.8% between April and June.
At the same time, Ireland’s modified domestic demand, a measure that removes some of the distortions created by multinational activity, provided a stronger picture. Growth in the first quarter was revised up to 1.7% from 0.3%.
Ireland’s GDP surged by 12.3% in 2025 after pharmaceutical exports to the United States increased ahead of threatened tariffs. The economy then contracted by 7.8% during the first three months of 2026 as the effects of stockpiling faded.
The 10.2% quarterly expansion recorded in the second quarter was therefore a sharp rebound, but it does not necessarily reflect the strength of domestic economic activity.
The revised euro zone figures provide some reassurance about the bloc’s economic position, although higher inflation and energy costs remain significant risks for households, businesses and policymakers in the months ahead.
