emirates7 - The European Commission said that Autumn 2025 Economic Forecast shows continued growth despite challenging environment.
Economic growth exceeded expectations in the first nine months of the year, with real GDP growth outperforming the annual expansion projected in spring.
This better-than-expected performance was initially due to a surge in exports ahead of anticipated tariff increases, but investment in equipment and intangible assets also performed more strongly than expected, most notably in Ireland, but also in other countries. Continued growth in the third quarter is testimony to the resilience of the European economy and its ability to navigate unprecedented shocks.
This forecast projects real GDP to grow by 1.4% in the EU in 2025 and 2026, edging up to 1.5% in 2027. The euro area is expected to broadly mirror this trend, with real GDP growing by 1.3% in 2025, 1.2% in 2026, and by 1.4% in 2027.
At the same time, potential growth is set to go down a notch from 1.5% in 2024 to 1.3% in 2027 in the EU, and from 1.4% to 1.2%, respectively, in the euro area, as growth in the working age population slows. Inflation is forecast to continue its decline in 2025, falling to 2.1% in the euro area, and then hover around 2% over the next two years. In the EU, inflation is set to remain marginally higher, falling to 2.2% in 2027.
Economic growth exceeded expectations in the first nine months of the year, with real GDP growth outperforming the annual expansion projected in spring.
This better-than-expected performance was initially due to a surge in exports ahead of anticipated tariff increases, but investment in equipment and intangible assets also performed more strongly than expected, most notably in Ireland, but also in other countries. Continued growth in the third quarter is testimony to the resilience of the European economy and its ability to navigate unprecedented shocks.
This forecast projects real GDP to grow by 1.4% in the EU in 2025 and 2026, edging up to 1.5% in 2027. The euro area is expected to broadly mirror this trend, with real GDP growing by 1.3% in 2025, 1.2% in 2026, and by 1.4% in 2027.
At the same time, potential growth is set to go down a notch from 1.5% in 2024 to 1.3% in 2027 in the EU, and from 1.4% to 1.2%, respectively, in the euro area, as growth in the working age population slows. Inflation is forecast to continue its decline in 2025, falling to 2.1% in the euro area, and then hover around 2% over the next two years. In the EU, inflation is set to remain marginally higher, falling to 2.2% in 2027.