The EU economy began 2025 on a somewhat stronger footing than anticipated. It is projected to keep growing at a modest rate this year, with growth expected to pick up in 2026, despite heightened global policy uncertainty and trade tensions.
The Commission’s Spring 2025 Economic Forecast projects real GDP to grow by 1.1% in 2025 in the EU and 0.9% in the euro area, broadly the same pace as recorded in 2024. In 2026, growth is expected to accelerate to 1.5% in the EU and 1.4% in the euro area. Headline inflation in the euro area is expected to slow down from 2.4% in 2024 to an average of 2.1% in 2025 and 1.7% in 2026. In the EU, inflation is set to follow similar dynamics from a slightly higher level in 2024, falling just below 2% in 2026.
Valdis Dombrovskis, Commissioner for Economy and Productivity; Implementation and Simplification said: “The EU economy is demonstrating resilience amid high trade tensions and a surge in global uncertainty. Underpinned by a robust labour market and rising wages, growth is expected to continue in 2025, albeit at a moderate pace. Inflation is declining faster than previously forecast and is on track to reach the 2% target this year. But we cannot be complacent. The risks to the outlook remain tilted to the downside, so the EU must take decisive action to boost our competitiveness.”
