The European Commission releases new forecasts

CEE Macro and FI Daily , 20. May
The European Commission releases new forecasts

Yesterday, the European Commission released their spring edition of economic forecasts, which projects real GDP growth in 2025 at 1.1% in the EU and 0.9% in the euro area. This represents a considerable downgrade compared to the previous forecasting round, largely due to the heightened uncertainty and the unpredictability of the US tariffs final configuration. Looking at the CEE region, weve also made visible adjustments to our growth forecast in reaction to flash estimates of 1Q25 GDP data, described in yesterdays publication of the CEE Growth Navigator. In comparison to the EC, we anticipate roughly the same growth rates in Hungary, while we see smaller growth prospects in Czechia (-0.2pp), Croatia (-0.4pp), Poland (-0.2pp) and Slovenia (-0.5pp). However, the forecast for Slovenia from the EC might not have included the major negative surprise from Q1 flash GDP. On the other hand, Romania and Slovakia are seen more positively by our analysts, by 0.4pp and 0.3pp respectively. Next year, the largest discrepancy between our and EC forecasts is for Romania, differing by 0.9pp. Our more positive outlook comes from assumptions of higher utilization of the RRF and a more positive external environment. However, once the structure for Q1 is out, we do not rule out downward adjustments.