MNI BRIEF: EC Downgrades Euro Area Growth, Inflation Outlook

The European Commission has significantly downgraded its Euro Area's growth and inflation outlook due to the weaker global trade environment as well as the continuing uncertainty surrounding US tariff policy. 

The EC revised EA growth for the year down to 0.9% for this year and to 1.4% for next year from the 1.3% and 1.6% forecast in the autumn. Inflation was also revised down to 2.1% and 1.7% in 2025 and 2026 from the 2.4% and 2.0% estimates made in the autumn forecast.

Based its forecasts on certain assumptions around US tariff policy, specifically a 10% US tariff on EU exports, as had been the case until April 9, along with a 25% tariff on cars and steel and exemptions for pharma products and microprocessors. Brussels add that while the negotiated US-China tariff deal turned out lower than it had assumed, it was still big enough to cause a "big hit" to US-China trade.  

Source: European Commission