Brussels – The European Commission has revised its economic growth forecast for the Eurozone downwards for 2026, DZWatch has learned. The updated projections, released Monday, indicate a more subdued outlook for the 20-nation economic area.
The Commission now anticipates a growth rate of 1.2% for the Eurozone in 2026, a decrease from the previous forecast of 1.4%. The report cites the European economy’s “high openness” as a factor making it vulnerable to ongoing trade restrictions. While trade agreements forged by the United States with its partners, including the EU, have helped to mitigate some concerns, uncertainty persists.
A statement from the Commission highlighted that lingering ambiguity surrounding trade policies continues to cast a shadow over economic activity. It suggests that both tariff and non-tariff barriers could impede EU growth more significantly than initially anticipated.
Across the entire 27-member European Union, the Commission projects a growth rate of 1.4% for 2026, slightly below the 1.5% figure announced in May. This adjustment reflects a cautious approach amid a complex global economic landscape.
Despite the downward revision, Commissioner for Economy, Valdis Dombrovskis, struck an optimistic tone. “Even in challenging economic circumstances, the EU economy has continued to grow,” he stated in the report. This resilience is seen as a positive sign for the bloc’s overall economic health.
The Commission also adjusted its inflation forecasts. Inflation in the Eurozone is now expected to reach 1.9% in 2026, up from a previous projection of 1.7%. For 2025, inflation is anticipated to be 2.1%, bringing it closer to the European Central Bank’s target of 2%. The report noted a slowdown in the rise of food and services prices, but this was offset by an increase in energy price inflation.
The downgraded growth forecast underscores the challenges facing the European economy as it navigates global trade uncertainties and inflationary pressures.
