Euro Area Inflation To Fall Below 2 On Us Tariffs Eu Predict
BloombergMAY 18
EU Slashes GDP Growth Forecast in 2025 to 1.1%
Above: Executive Vice President of the European Commission for "An Economy that Works for People," Valdis Dombrovskis, talks to the media at the Berlaymont, the EU Commission's headquarters, on May 19, 2025, in Brussels, Belgium. Image copyright: Thierry Monasse/Contributor/Getty Images News via Getty Images
The Spin
Narrative A
The economic slowdown reflects the EU's vulnerability as the world's most open economy. Trade tensions with the U.S. and global uncertainty are severely impacting export-oriented industries, while deteriorating business sentiment is hampering investment and consumption across the bloc. The situation could worsen if global trade fragments further or climate-related disasters escalate.
Narrative B
Despite current challenges, the EU economy shows remarkable resilience with strong labor market performance and declining inflation. The potential de-escalation of trade tensions, increased defense spending, and new trade agreements with other partners could boost growth. Additionally, the ongoing digital transformation and infrastructure investments supported by EU funds provide a foundation for future economic expansion.