EU Revises Economic Outlook
(MENAFN) The European Union has revised its economic growth projection for the eurozone, reducing it to 0.9 percent for 2025—down from a previous estimate of 1.3 percent.
This adjustment, outlined in the EU Commission's Spring 2025 Economic Forecast released on Monday, reflects a more cautious view of the region's economic trajectory.
According to the report, "This represents a considerable downgrade compared to the Autumn 2024 Forecast, largely due to the impact of increased tariffs and the heightened uncertainty caused by the recent abrupt changes in US trade policy and the unpredictability of the tariffs’ final configuration."
The lowered estimate highlights the consequences of trade tensions and market instability stemming from shifting international policies.
The report further anticipates that the European Union’s gross domestic product (GDP) will rise by 1.1 percent in 2025 and by 1.5 percent in 2026.
These figures are also less optimistic than the projections from the Autumn 2024 report, which predicted a 1.5 percent increase in 2025 and 1.8 percent in 2026 for the EU.
Similarly, the eurozone was earlier expected to grow by 1.3 percent in 2025 and 1.6 percent in 2026, both of which have now been downgraded.
Regarding inflation, the forecast suggests that price increases will average 2.3 percent across the EU and 2.1 percent within the eurozone in the current year.
These rates are expected to decline to 1.9 percent and 1.7 percent, respectively, by 2026.
The report emphasized the global economy’s lack of readiness for the protectionist shift in US trade strategy, noting that the "tariff increases announced on April 2 sent shockwaves through the global economy."
Although the new tariffs were later paused after provoking significant reactions in financial markets, the unpredictable nature of US trade policy has added substantial volatility to the global economic climate.
The report concluded that this uncertainty has weighed heavily on worldwide economic expectations.
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