EU Commission Unveils Growth Forecast As Trade Fight Shakes Economies

Barnama

19-05-2025

BRUSSELS, May 19 (Bernama-dpa) -- The European Commission will release its spring economic forecast on Monday, with particular attention paid to Germany's stalled recovery and the broader impact of trans-Atlantic trade tensions, reported German news agency dpa.
In its most recent forecast in November, the EU's executive arm projected Germany's gross domestic product (GDP) to edge up by 0.7 per cent this year.
However, the German government said late last month it expects the economy to flatline in 2025. The International Monetary Fund (IMF) also anticipates no growth this year for Europe's largest economy.
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Once envied across Europe, Germany's economy has suffered two consecutive years of recession as inflation, high energy prices and dropping exports weighed on businesses.
Zooming out, the commission had forecast in November EU-wide growth of 1.5 per cent this year, with a slightly lower 1.3 per cent for the 20-member eurozone. But the eruption of the trade fight with the United States is now expected to dampen growth.
The US has imposed a 10 per cent universal tariff on all imports to the US, but it has paused additional country-specific tariffs beyond this baseline for most trading partners, including the EU. This prompted Brussels to suspend its planned counter-tariffs.
"We see these US tariffs as a factor that will have a negative impact on the EU economy and the US economy itself, and will also have negative global repercussions," EU Economy Commissioner Valdis Dombrovskis said recently when asked to preview the spring forecast.
--BERNAMA-dpa