Eurozone economy in grey

The Eurozone economy is forecast to grow less than previously expected in 2025, with only a slight increase compared to 2024.

Consumers shop for goods at a supermarket in Berlin, Germany on November 8, 2023. (Source: THX)

Analysts surveyed by Bloomberg forecast the economy will grow 1% in 2025, up from 0.8% this year but down from a previous forecast of 1.2%. The forecast for 2026 was also lowered to 1.2% from 1.4%.

For Germany, whose economy is facing a prolonged slowdown in key manufacturing, economists forecast growth of just 0.4% in 2025 and 1% in 2026, a decline of 0.3 percentage points per year.

France's economic outlook was also downgraded, while Spain is expected to grow slightly faster than previously forecast.

These forecasts are more pessimistic than those of the European Central Bank (ECB), which also downgraded its outlook this month when it decided to cut interest rates for the fourth time since June 2024.

ECB officials still expect households to drive the recovery as incomes rise and inflation stabilizes at the 2% target, although that expectation has been met with disappointment.

“There are strong reasons to believe that the economy will improve next year and the year after,” said ECB chief economist Philip Lane. “Although consumption is currently rising, there may be some delay as some people may be reluctant to make consumption decisions amid uncertainty.”

Economists expect inflation to hit 2% in the second quarter of 2025, then remain there before falling to 1.9% a year later, according to the survey.

Core inflation – one of the ECB's remaining concerns – is expected to fall faster than in the previous survey, reaching 2% by the third quarter of 2025.

Source: https://baoquocte.vn/kinh-te-eurozone-phu-sac-xam-298456.html