The European Commission has lowered the GDP growth forecast for the eurozone in the next two years due to weakening global trade outlook.
The European Commission published a report today (19th), lowering the economic growth forecast for the Eurozone for the next two years from 1.3% and 1.6% to 0.9% and 1.4%, respectively. The Commission stated that the growth outlook has been significantly downgraded primarily due to the weakening global trade outlook and increasing uncertainty in trade policies. The outlook is based on the expectation that the United States will maintain a 10% standard tariff on EU goods, impose a 25% tariff on steel, aluminum, and autos, and not impose tariffs on pharmaceuticals and semiconductors. The report predicts that the unemployment rate in the Eurozone will continue to decline in the next two years, from 6.4% last year to 6.3% this year, and is expected to further decrease to 6% next year.
European Commission: The GDP growth forecast for the Eurozone in 2025 has been downgraded to 0.9%.
Galunhui May 19 | European Commission: Adjusted the 2025 Eurozone GDP growth forecast from 1.3% in November to 0.9%, and expects growth of 1.4% in 2026, previously 1.6%. The Eurozone growth forecast is based on the assumption of a 10% tariff on all EU Commodities, a 25% tariff on Steel, Aluminum, and Autos, and no tariffs on pharmaceuticals and chips.
European Commission: The economic growth outlook for the Eurozone faces downward risks.
On May 19, Glonghui reported that the European Commission stated that the economic growth prospects of the Eurozone face downside risks due to trade tensions and climate-related disasters. In 2025, the consumer inflation rate in the Eurozone is expected to slow from 2.4% in 2024 to 2.1%, and drop to 1.7% in 2026. The total budget deficit of the Eurozone is projected to increase from 3.1% of GDP in 2024 to 3.2% in 2025 and rise to 3.3% in 2026. Additionally, the total public debt as a percentage of GDP in the Eurozone is expected to rise from 88.9% in 2024 to 89.9% in 2025 and further increase to 91.0% in 2026.
The Eurozone's CPI in April increased by 2.2% year-on-year.
On May 19, according to Gelonghui, the final year-on-year CPI for the Eurozone in April was 2.2%, expected 2.20%, previous value 2.20%; the final month-on-month CPI was 0.6%, expected 0.60%, previous value 0.60%.
EU Lowers Growth Forecast as U.S. Tariffs Seen Hitting Exports
The final monthly inflation rate for the Eurozone in April was 0.6%, unchanged from the previous period. The forecast value was 0.6%.
The final month-on-month inflation rate for the Eurozone in April is 0.6%, unchanged from the previous period. The forecast value is 0.6%.~