EU Commission: Eurozone economy seen picking up in 2025 and 2026

In its quarterly assessment published on Friday, the European Commission projects a bright Eurozone economic outlook for 2025 and 2026 but warned of overseas risks.

Additional takeaways

Sees Eurozone economic growth at 0.8% in 2024, 1.3% in 2025 and 1.6% in 2026.

Sees Eurozone inflation at 2.4% in 2024, 2.1% in 2025 and 1.9% in 2026.

Sees Eurozone budget deficit at 3.0% in 2024, 2.9% in 2025 and 2.8% in 2026.

Sees Eurozone public debt at 89.1% in 2024, 89.6% in 2025 and 90.0% in 2026.

Sees increased risks to the outlook from the war in Ukraine, conflict in the Middle East, and protectionism in trade.

German GDP will expand 0.7% in 2025 vs 1.0% growth in previous forecast.

German GDP growth expected to accelerate to 1.3% in 2026, but remain below Eurozone average of 1.6%.

German economy will contract 0.1% this year vs 0.1% growth in the Spring forecast.

Market reaction

EUR/USD holds the latest uptick near 1.0568, up 0.35% on the day, as of writing.