Eurozone economy to grow modestly in 2025

The European Commission projects the euro area’s GDP will rise by 0.9% in 2025, held back by global trade uncertainty and high policy risk.

Inflation is expected to decline to 2.1% in 2025 from 2.4% in 2024, while unemployment should edge down to 6.3%. Public finances are under pressure: the euro area deficit is expected to rise to ‑3.2% of GDP in 2025, and then to worsen slightly by 2026.

Risks remain tilted to the downside, especially from renewed trade tensions, but the EU is eyeing support to Ukraine through loans backed by frozen Russian assets.