Overview

• The European Commission reduced its 2025 eurozone growth projection from 1.3% to 0.9% and its 2026 forecast from 1.6% to 1.4%.
• The downgrade reflects the ongoing impact of U.S. tariffs, including 10% on most EU goods and 25% on steel, aluminum, and cars.
• Germany, the eurozone's largest economy, is forecast to stagnate with zero growth in 2025, further weighing on the bloc's outlook.
• Unemployment in the eurozone is expected to fall to 6.1% by 2026, while inflation is projected to ease to 2.1% in 2025 and 1.7% in 2026.
• The Commission warns of downside risks, including further trade fragmentation and climate-related disasters, which could exacerbate economic challenges.