EU Cuts Growth Predictions Amid U.S. Tariff Hikes, Instability
(MENAFN) The European Commission has significantly lowered its economic growth predictions for the European Union. This revision, detailed in their Spring 2025 Economic Forecast released on Monday, attributes the downturn to the effects of increased tariffs imposed by the United States and ongoing instability.
The commission has reduced its anticipated real gross domestic product growth for the EU to 1.1 percent in 2025 and 1.5 percent in 2026. These figures are notably lower than the 1.5 percent and 1.8 percent projected in the Autumn 2024 Forecast.
According to the commission, "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 U.S. trade policy and the unpredictability of the tariffs' final configuration."
The economic outlook for the euro area, which includes the 20 EU nations using the euro, has also been revised downwards. The area is now forecast to experience growth of 0.9 percent in 2025 and 1.4 percent in 2026, falling short of previous estimates.
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