US tariff policy dominates economic outlook
Economic Outlook , 16. Juli
The US announcement that it would raise general tariffs on its most important trading partners to between 10% and 55% on August, 1 dampens the global growth outlook.
Despite the uncertainty, however, interest rate cuts already implemented by the ECB, combined with fiscal measures, particularly in Germany, should support the Eurozone economy in the coming quarters. In view of the strong growth in 1Q, we forecast GDP growth of 0.8% for the Eurozone in 2025, followed by a slight acceleration to 1.0% in 2026.
Towards the end of the first half of the year, service inflation finally noticeably lost momentum. This plays a decisive role in the ECB's assessment of the sustainable inflation trend. For 2025, we forecast a decline in inflation from 2.4% in 2024 to 2.0%.
After an economically encouraging year in 2024, the US economy suffered a severe setback in 1Q25. For 2025 as a whole and also for 2026, we expect economic growth of 1.4%.
Despite the uncertainty, however, interest rate cuts already implemented by the ECB, combined with fiscal measures, particularly in Germany, should support the Eurozone economy in the coming quarters. In view of the strong growth in 1Q, we forecast GDP growth of 0.8% for the Eurozone in 2025, followed by a slight acceleration to 1.0% in 2026.
Towards the end of the first half of the year, service inflation finally noticeably lost momentum. This plays a decisive role in the ECB's assessment of the sustainable inflation trend. For 2025, we forecast a decline in inflation from 2.4% in 2024 to 2.0%.
After an economically encouraging year in 2024, the US economy suffered a severe setback in 1Q25. For 2025 as a whole and also for 2026, we expect economic growth of 1.4%.