The EU on Monday cut its eurozone growth forecast for 2026 as risks from international trade and geopolitical tensions weigh on Europe鈥檚 economy.
The European Commission expects the 20-country single currency area to grow by 1.2 per cent in 2026, down from a previous forecast of 1.4 per cent.
The bloc鈥檚 executive said Europe鈥檚 鈥榟ighly open鈥� economy remained 鈥榮usceptible to ongoing trade restrictions鈥�, but noted that US trade deals with partners including the European Union 鈥榓lleviated some of the uncertainties鈥�.
鈥楶ersistent trade policy uncertainty continues to weigh on economic activity, with tariffs and non-tariff restrictions potentially constraining EU growth more than expected,鈥� the commission said in a statement.
For the entire 27-country EU, Brussels expects growth of 1.4 per cent in 2026, slightly lower than the 1.5 per cent predicted in May.
EU economic chief Valdis Dombrovskis appeared upbeat despite the uncertainty.
鈥楨ven in an adverse environment, the EU鈥檚 economy has continued to grow,鈥� Dombrovskis said in a statement.
Brussels also forecasts eurozone inflation to hit 1.9 per cent in 2026, up from the previous prediction of 1.7 per cent for next year.
The commission said inflation in the single currency area is expected to reach 2.1 per cent in 2025, within touching distance of the European Central Bank鈥檚 two-per cent target.
Although Brussels said food and services price rises are slowing, this was 鈥榗ounterbalanced by rising energy inflation鈥�.
