Macroeconomic environment
September 3, 2026
The economy shows a favourable picture despite shocks from the international environment; inflation remains elevated
Domestic economic growth in the second quarter significantly exceeded expectations. Available data indicate that favourable developments are continuing in the third quarter, although growth is expected to be more moderate. The economy therefore remains highly resilient for now, similarly to the euro area, despite the war in the Middle East, higher energy prices and considerable uncertainty. Inflation remains elevated, with higher energy prices and an exceptionally dry summer posing risks to its persistence. In this issue of the Review of Macroeconomic Developments, we provide an additional analysis of the effects of higher energy prices on the economy. We find that their effects are significantly more adverse when higher energy prices result from constrained energy supply than when they are driven by stronger global demand. In such circumstances, the scope for economic policies to mitigate the consequences is also limited, making a coordinated response across different policy areas important.
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In focus
Energy shocks and their impact on the European and domestic economies
The energy shock of 2021–2022 significantly increased production costs for European industry and weakened its position relative to major global competitors. Despite some moderation, electricity and natural gas prices in Europe remain significantly higher than in the US and China. The September 2026 Review of Macroeconomic Developments therefore takes a closer look at how energy shocks are transmitted through the economy, how firms and the banking system respond, and the role of economic policies in adapting to them.
Energy shocks can have different effects on the economy, with their origin playing an important role. We find that their effects are significantly more adverse when higher energy prices result from constrained supply than when they are driven by stronger global demand. In such circumstances, the scope for economic policies to mitigate the consequences is also limited, making a coordinated response across different policy areas important.
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Economic publications
Review of macroeconomic developments and projections, June 2026
Research publications
Ajda Marjanovič: Monetary Policy Conditions Indicator in the Euro Area and the United States
Matjaž Volk: The Transmission of Targeted Monetary Policy to Bank Credit Supply
Matjaž Volk: Bank lending to non-bank financial institutions and implications for credit to the real economy