Signal The eurozone returns to secular stagnation with flat productivity and high saving

Summary

MGI finds that the eurozone has slipped back into secular-stagnation-like conditions resembling the prepandemic period, with flat productivity and higher saving. Europe's balance sheets look more balanced overall than that of the United States, with exceptions such as Italy's government debt, but productivity growth has fallen in Germany, France, and Italy. The personal saving rate stood at 15.1 percent in 2025, well above the 12.5 percent average of 2010 to 2019, as aggregate demand weakened. Inflation had mostly been moving toward the European Central Bank's 2 percent target, although Europe is more exposed to energy prices, and higher energy costs pushed annual inflation to 3.0 percent from April 2026. Productive investment remains below prepandemic and global averages, and per capita household wealth has fallen in purchasing power terms in Germany and France.