EU expects economy to expand moderately

Photo taken on May 23, 2025 shows European Union flags at the European Commission headquarters in Brussels, Belgium. (Xinhua/Zhao Dingzhe)

The Commission expects EU GDP to grow 1.4 percent this year, with the eurozone expanding 1.3 percent.

BRUSSELS, Nov. 17 (Xinhua) -- The European Commission's autumn 2025 economic forecast shows that driven by a surge in exports in anticipation of U.S. tariff increases, the European Union's (EU) economy maintained growth, and it is expected to continue expanding at a moderate pace over the forecast horizon.

In the report released on Monday, the Commission said the gross domestic product (GDP) of the EU is expected to grow 1.4 percent in 2025, with the eurozone expanding 1.3 percent. Growth in 2026 is forecast at 1.4 percent for the EU and 1.2 percent for the eurozone, both slightly lower than projections made in May.

Eurozone headline inflation is projected to ease to 2.1 percent this year from 2.4 percent in 2024. Inflation across the EU is seen declining from 2.6 percent in 2024 to 2.2 percent in 2027, remaining slightly above the eurozone rate.

This photo taken on Oct. 29, 2025 shows a street view in Berlin, Germany. (Xinhua/Zhang Haofu)

Due to the increase in defence spending, the EU's fiscal deficit is expected to rise to 3.4 percent of GDP in 2027 from 3.1 percent in 2024. The EU debt-to-GDP ratio is projected to rise from 84.5 percent in 2024 to 85 percent in 2027, with the eurozone ratio set to rise from around 88 percent to 90.4 percent.

The forecast noted that globally, trade barriers have reached historic highs, and the EU now faces higher average tariffs on exports to the U.S. compared with the spring forecast. Persistent trade policy uncertainty continues to weigh on economic activity, with tariffs and non-tariff restrictions potentially constraining EU growth more than expected. Any escalation in geopolitical tensions could intensify supply shocks, it noted.

Valdis Dombrovskis, the EU's economy commissioner, said, "Given the challenging external context, the EU must take resolute action to unlock domestic growth. This means accelerating our work on the competitiveness agenda, including by simplifying regulation, completing the Single Market, and boosting innovation."

This photo taken on Nov. 2, 2025 shows the autumn scenery of the city of The Hague in the Netherlands. (Xinhua/Shao Haijun)