Overview

• The European Commission's spring forecast lowers EU GDP growth for 2025 to 1.1%, with the eurozone at 0.9% and Germany stagnating at 0.0%.
• Higher U.S. tariffs and global trade instability are identified as the primary drivers of the downgraded economic outlook.
• Germany’s €500 billion investment package for defense and infrastructure could boost growth, but its impact is not yet factored into the forecast.
• Labor markets across the EU remain robust, with rising real wages supporting private consumption and economic resilience.
• The Commission predicts a modest recovery in 2026, with EU growth at 1.5%, the eurozone at 1.4%, and Germany at 1.1%.