MNI: EC Sees Slightly Higher 25 Growth, Lower In 26 - Sources

European Commission economic forecasts to be released on Nov 17 will show slightly higher growth this year but slightly lower next compared with the Spring Forecasts, EU sources told MNI.

Commission officials told member state finance officials at a meeting earlier this week that stronger growth in the third quarter, signs of improved economic sentiment in October and continuing robust conditions in labour markets are key factors in their assessment.    

"Overall EU and euro area growth should be slightly higher in 2025, slightly lower in 2026," one EU source said. 

Stronger economic activity in Q3 was led by France, Spain and the Netherlands, while Belgium, Italy and Germany flatlined, with frontloading of exports seen as a key factor. 

ETS2 IMPACT UNCLEAR

In the spring, the Commission forecast EU growth of 1.1% and 0.9% in the euro area in 2025, accelerating to 1.5% and 1.4% in 2026.

The Commission will also release a forecast for 2027 inflation for the first time. It is not yet clear if the Commission will take account of the decision of EU environment ministers on Wednesday to push back the extension of the ETS2 emissions trading scheme to heating and road fuels by one year, potentially delaying a measure which had been expected to significantly boost consumer prices. (See MNI: EC Autumn Inflation Forecast To Assume Mitigated ETS2)

Officials said that the cut-off date for inputs to the forecasts was Oct 31.