Brussels: The European Union (EU) on Monday lowered its growth forecast for the Eurozone for 2026 as international trade risks and geopolitical tensions cast a shadow over the European economy.
According to Qatar News Agency, the European Commission (EC) now expects the 20-member single currency area to grow by 1.2 percent in 2026, down from its previous forecast of 1.4 percent. The Commission emphasized that Europe's "highly open" economy remains "vulnerable to persistent trade constraints," although trade agreements reached by the United States with its partners, including the EU, have helped "remove some concerns."
"Continuing uncertainty surrounding trade policies continues to weigh on economic activity, with tariff and non-tariff barriers likely to impede EU growth more than anticipated," the Commission said in a statement. The EC also forecasts growth of 1.4 percent in 2026 for the 27 EU member states, slightly lower than the 1.5 percent projected last May.
The EC also expects inflation in the Eurozone to reach 1.9 percent in 2026, up from its previous forecast of 1.7 percent for the same year. It anticipates inflation in the single currency area to reach 2.1 percent in 2025, approaching the European Central Bank's target of 2 percent. While the EC noted a slowdown in the rise of food and services prices, this slowdown was "offset by a rise in energy price inflation."