Overview
- The European Commission now projects 2025 growth of 1.3% for the euro area and 1.4% for the EU, up from April’s lower estimates.
- The upgrade is attributed to a front‑loaded export surge ahead of the U.S. 15% tariff on most EU goods.
- The 2026 outlook is trimmed to 1.2% for the euro area and 1.4% for the EU as trade policy uncertainty weighs on activity.
- Euro‑zone inflation is forecast to ease to 2.1% in 2025 and 1.9% in 2026, signaling reduced pressure on ECB policy.
- Public finances deteriorate despite growth, with deficits and debt rising through 2027, and performance diverges as Poland and Spain outperform Germany, France and Italy.