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Defence spending is expected to increase significantly in the euro area in the coming years. Until now, euro area defence spending has mainly consisted of consumption expenditure, such as personnel costs. Growth effects would likely remain temporary and would support a number of specific manufacturing industries.

There are considerable differences between countries of the euro area in the prevalence of variable rate bank loans. According to recent research by the authors, the extent to which bank loans are variable rate loans influences how the key ECB interest rates affect the demand for corporate loans.

Wage inflation is one of the most significant factors affecting consumer price inflation, and its impact is strongest in the service industries. Wage inflation in the euro area is monitored using a variety of indicators that complement each other.

Finland’s economy is still sluggish, but growth is picking up little by little. Due to the economy’s weak performance in the early months of the year, the full-year growth for 2025 will be 0.3%. However, growth will pick up to 1.3% in 2026 and to 1.7% in 2027.