Trade Tensions with US Impact EU Growth Forecasts

In the fall, a growth of 1.5 percent in the entire EU in 2025 was hoped for. The EU Commission is now counting on only 1.1 percent in its latest guess.

"This is due to significantly weaker global trade prospects and greater uncertainty about trade policy," it says in Monday's spring forecast.

For the eurozone, a growth of 0.9 percent is estimated this year - compared to a belief in 1.3 percent in the fall forecast. Not least, the figures are being pulled down by Germany, where the Commission now believes in zero growth this year. It's even worse in Austria, where the Commission is counting on a recession: minus 0.3 percent.

For 2026, subsequent increases of 1.5 percent in the entire EU and 1.4 percent in the euro area are expected.

For Sweden, the Commission believes in an increase of 1.1 percent this year and 1.9 percent for 2026.

The forecast is based on tariffs to the US being 10 percent for most goods, but 25 percent on steel, and cars.

Inflation is expected to be 2.3 percent in the EU this year and 2.2 percent in Sweden.

"The risks in the forecast lean towards the negative, so the EU must take decisive measures to promote our competitiveness," says EU Economic Commissioner Valdis Dombrovskis in a press release.

This is how the EU Commission sees the growth in member states for 2025, in percent of GDP:

Malta: 4.1

Denmark: 3.6

Ireland: 3.4

Poland: 3.3

Croatia: 3.2

Cyprus: 3

Lithuania: 2.8

Spain: 2.6

Greece: 2.3

Slovenia: 2

Bulgaria: 2