The European Commission has revised its 2025 GDP growth forecast for the Eurozone down to 1.3%, compared to the previously expected 1.4%.
Economic growth in 2024 is projected to remain at 0.8%, while growth in 2026 is forecasted at 1.6%. Inflation in the Eurozone is expected to decline from 5.4% in 2023 to 2.4% in 2024, reaching 1.9% by 2026. The EU’s budget deficit is projected to be 3.1% of GDP in 2024, decreasing to 3.0% in 2025 and 2.9% in 2026. For the Eurozone, the deficit is expected to shrink from 3.0% in 2024 to 2.8% by 2026.
The European Commission notes that economic prospects remain uncertain due to geopolitical risks, including Russia’s war against Ukraine, the Middle East conflict, and energy vulnerabilities.
Internal challenges, such as structural issues in the manufacturing sector and policy uncertainties, could impact the EU’s competitiveness, economic growth, and labor market.
