EZ EU Economic Forecasts

EU COMMISSION: FRANCE 2026 BUDGET DEFICIT SEEN AT 5.1%, GERMAN 2026 BUDGET DEFICIT SEEN AT 3.7% EU COMMISSION: EXPECTS EURO ZONE AGGREGATED BUDGET DEFICIT FOR 2026 AT 3.3%, SAME AS PREVIOUS FORECAST Spring 2026 Economic Forecast: Slowdown in growth as energy shock drives up inflation Before the outbreak of the conflict in the Middle East, the global economy was gaining momentum. A challenging geopolitical environment and US tariff uncertainty continued to weigh on growth, but easing inflation and a robust investment cycle related to the unfolding AI revolution provided important support. The EU economy was likewise strengthening while inflationary pressures were further abating. Weak competitiveness was a source of concern and public finances required attention, but the economy also showed resilience, including a robust labour market and solid private sector balance sheets. The conflict materially changed this picture, delivering one of the most significant global energy supply disruptions in recent history—coming less than five years after the energy shock triggered by Russia’s war of aggression against Ukraine.

EU Commission Raises Eurozone 2025 GDP Growth Forecast To 1.3% From 0.9%, Cuts 2026 To 1.2% From 1.4% - Forecasts Eurozone 2025 Inflation At 2.1%, 1.9% In 2026, 2.0% In 2027 Vs 2.4% In 2024 - Forecasts Eurozone 2025 Aggregated Budget Deficit 3.2% Of GDP, 3.3% In 2026, 3.4% In… Autumn 2025 Economic Forecast shows continued growth despite challenging environment Economic growth exceeded expectations in the first nine months of the year, with real GDP growth outperforming the annual expansion projected in spring. This better-than-expected performance was initially due to a surge in exports ahead of anticipated tariff increases, but investment in equipment and intangible assets also performed more strongly than expected — most notably in Ireland, but also in other countries. Continued growth in the third quarter is testimony to the resilience of the European economy and its ability to navigate unprecedented shocks. Data from the Commission surveys and PMIs in October suggest continuing growth momentum in the coming quarters. Key conditions for an expansion in economic activity remain in place, despite a challenging external environment and persistent uncertainty. Growth is supported by a resilient labour market, decreasing inflation and favourable financing conditions. In addition, policy support from the Recovery and Resilience Facility and other EU fund

This Spring Forecast projects real GDP growth in 2025 at 1.1% in the EU and 0.9% in the euro area– broadly the same rates attained in 2024. Despite these challenges, EU growth is expected to rise to 1.5% in 2026, supported by continued consumption growth and a rebound of investment. Growth in the euro area is projected to reach 1.4% in 2026. Disinflation is anticipated to proceed more swiftly than expected in autumn, with new disinflationary factors from ongoing trade tensions outweighing higher food prices and stronger short-term demand pressures. After averaging 2.4% in 2024, headline inflation in the euro area is expected to meet the ECB target by mid-2025—earlier than previously anticipated—and to average 1.7% in 2026. Starting from a higher level in 2024, inflation in the EU is projected to continue easing to 1.9% in 2026. In the fourth quarter of last year, the EU economy grew by 0.4%, slightly surpassing the autumn projections. For the entire year, GDP growth reached 1.0%. The volume of government consumption expanded vigorously and provided a larger-than-expected contribution to EU growth, mainly through employment growth in the government sector. Growth in private consumption also exceeded expectations towards the end of the year, driven by solid increases in disposable income as the economy added over 1.7 million jobs, and nominal wages recovered the purchasing power lost to surging inflation. Despite a minor rise in the saving rate (from a still high level), consumption expanded by 1.3%. Net exports also bolstered growth, buoyed by a robust rise in services exports. The EU's economic expansion continued in the first quarter, with real GDP growth increasing by 0.3%. However, investment fell short of expectations due to high financing costs and alrea EU Commission Cuts Eurozone GDP Growth Forecast For 2025 To 0.9% From 1.3% In Nov, Sees 2026 Growth At 1.4% Rather Than 1.6% - Growth Outlook Revised Significantly Downwards Because Of Weaker Trade Outlook And Trade Policy Uncertainty - Based On Assumption Of 10% US Tariff On…

Following a prolonged and broad-based stagnation, the EU economy resumed growth in the first quarter of this year. As projected in spring, the expansion continued at a subdued, yet steady, pace throughout the second and third quarters, amidst further abating inflationary pressures. The conditions for a mild acceleration of domestic demand appear in place, despite heightened uncertainty. This Autumn Forecast projects real GDP growth in 2024 at 0.9% in the EU and 0.8% in the euro area. For the EU, this is 0.1 pps. lower with respect to ...

This Winter interim Forecast lowers the growth outlook for this year and sets inflation on a lower downward path than projected last autumn. Economic activity in 2023 is now estimated to have expanded by only 0.5% in both the EU and the euro area. The growth outlook for 2024 is revised down to 0.9% in the EU and 0.8% in the euro area. In 2025, economic activity is still expected to expand by 1.7% in the EU and 1.5% in the euro area. EU HICP inflation is forecast to fall from 6.3% in 2023 to 3.0% in 2024 and 2.5% in 2025. In the euro ...

EU COMMINSION: HIGH INFLATION, ECB INTEREST RATES AND WEAKER EXTERNAL DEMAND TOOK A HEAVIER TOOL ON EURO ZONE GROWTH THAN EXPECTED. EU COMMISSION CUTS 2023 EURO ZONE ECONOMIC GROWTH FORECAST TO 0.6% FROM 0.8% FORECAST IN SEPTEMBER. EU COMMISSION EXPECTS AGGRAGATED EURO ZONE PUBLIC DEBT TO EASE IN 2024 TO 89.7% OF GDP FROM 90.4% IN 2023, EASING TO 89.5% IN 2025. EU COMMISSION FORECASTS ITALY, FRANCE, BELGIUM, SLOVAKIA AND MALTA TO HAVE A BUDGET DEFICIT WELL ABOVE THE EU'S LIMIT OF 3% IN 2024 AND 2025. EU COMMISSION FORECASTS EURO ZONE INFLATION WILL FALL TO 3.2% IN 2024 AND TO 2.2% IN 2025.