EU Lowers Forecast for Economic Growth in Eurozone
Brussels, May 19 (QNA) – The European Union (EU) on Monday lowered its forecast for economic growth in the Eurozone for 2025 due to global trade tensions stemming from the comprehensive tariffs imposed by US President Donald Trump.
The European Commission (EC) announced that the economy of the 20-nation single currency area is expected to grow by 0.9 percent in 2025, down from a previous forecast of 1.3 percent, due to “weaker global trade prospects and increased uncertainty regarding trade policies.”
The European Union (EU) also lowered its forecast for Eurozone growth in 2026 to 1.4 percent, down from the 1.6 percent it had forecast in November.
“Growth is expected to continue in 2025, supported by a strong labor market and rising wages, albeit at a moderate pace,” said Valdis Dombrovskis, the EU’s chief economic official.
He added, “The outlook remains uncertain and is tilted downward, so the European Union (EU) must take decisive action to strengthen our competitiveness.”
The EU also announced that Germany, the bloc’s largest economy, will not achieve any growth in 2025, a significant reduction compared to last year’s growth forecast of 0.7 percent.
The Commission maintained its forecast for inflation in the single currency area to fall to 2.1 percent, very close to the European Central Bank’s 2 percent target.
While inflation in the Eurozone’s 20 member states slowed sharply from its peaks of late 2022, settling at 2.2 percent in April, the EU lowered its inflation forecast for 2026 from 1.9 percent to 1.7 percent.
The European Commission (EC) said that continued global trade tensions could re-inflate the economy. (QNA)