The European Commission Updates Economic Outlook for Eurozone and Turkey
The European Commission (EC) has released an updated economic forecast for the Eurozone and Turkey, adjusting expectations amidst ongoing global challenges. According to the latest report titled “European Economic Forecasts Spring 2025,” growth predictions have been revised for the Eurozone due to recent trade tensions with the United States.
Initially, the EC projected a 1.3% growth for the Eurozone in 2025, which has now been adjusted to 0.9%. For 2026, the expectations were lowered from 1.6% to 1.4%. Despite this downward revision, the report suggests that the EU economy started 2025 on a stronger footing than anticipated and that growth will continue, albeit moderately, despite increasing global uncertainties and trade tensions.
The report anticipates the EU economy will grow by 1.1% in 2025 and 1.5% in 2026, while the Eurozone’s growth is projected at 0.9% in 2025 and 1.4% in 2026. This represents a reduction from previous forecasts which estimated the EU to grow by 1.5% in 2025 and 1.8% in 2026, and the Eurozone by 1.3% in 2025 and 1.6% in 2026.
The primary reason for this revision is identified as a weakening global trade outlook and heightened uncertainty surrounding trade policy. For individual countries, Austria is expected to contract by 0.3% this year, Germany is not forecasted to grow, while France is anticipated to grow by 0.6%, Italy by 0.7%, and Spain by 2.6%. In 2026, Germany is expected to see a growth of 1.1%, France 1.3%, Italy 0.9%, and Spain 2%.
Inflation predictions are also included in the report, with expectations of 2.3% in the EU and 2.1% in the Eurozone for this year. By 2026, the inflation rate is expected to decrease to 1.9% in the EU and 1.7% in the Eurozone.
The report highlights the unpreparedness of the world for protectionist changes in U.S. trade policy. An increase in customs tariffs announced earlier this year has significantly impacted the global economy, although a partial rollback of tariffs between the U.S. and China is seen as a positive development. Nonetheless, high tariffs are expected to cause a gradual decline in trade flows between these two countries. The EU, recognized as the most open economy globally, is particularly sensitive to such tensions. The report warns that further fragmentation of global trade could hinder growth and reignite inflationary pressures.
The economic outlook for Turkey is also covered in the report. The Turkish economy is expected to benefit from a continued decrease in inflation, driven by stringent monetary and fiscal policies coupled with lower energy prices. A reduction in the budget deficit is anticipated, and public debt levels are expected to remain moderate. The forecast projects a growth of 2.8% for Turkey in 2025 and 3.5% in 2026.
During a press conference in Brussels, Valdis Dombrovskis, the EC Member responsible for the economy, addressed the findings of the report. He highlighted the resilience of the EU economy amid high trade tensions and increasing global uncertainties. Dombrovskis noted that Europe’s growth is expected to progress at a moderate pace, with inflation decreasing more swiftly than previously anticipated. However, he emphasized that the economic outlook still has downward risks, necessitating decisive actions to enhance competitiveness within the EU.
The report underscores the complexity of the current global economic landscape and the ongoing adjustments required to navigate uncertainties effectively. It calls for strategic interventions to sustain growth and stability within the Eurozone and beyond.
