ING Analysts Warn of Slowing Potential Growth in Eurozone

ING analysts Ruben Dewitt and Peter Vanden Houte have indicated that potential growth in the Eurozone is likely to slow due to suppressed productivity. According to Jin10, the analysts stated in a report that unless there is a sudden acceleration in productivity, the potential GDP growth rate could fall below 1%. They highlighted that while productivity has been a significant driver of growth in the United States, it remains weak in Europe. Italy and Germany even experienced negative productivity growth during 2024-25. Expanding the labor force could be a key driver, as evidenced by increased immigration in Spain. However, they noted that due to political resistance, this is unlikely to serve as a model for other parts of Europe. Revitalizing productivity will require ambitious structural policies, but progress is expected to be very slow.