As a result of the tariff imposition by the Donald Trump administration in the United States, the economic growth forecast for the Eurozone (20 countries using the euro) has been revised downward this year.
The European Commission, which acts as the executive branch of the European Union (EU), on 19th (local time), through its 'Spring Economic Forecast Report,' estimated that this year the domestic gross domestic product (GDP) growth rate in the Eurozone would be 0.9%, and across all 27 EU countries it would be only 1.1%.
This figure is 0.4 percentage points lower than the previously announced projections in November of last year, which were 1.3% for the Eurozone and 1.5% for the EU. The growth forecast for the Eurozone next year has also been revised down from 1.6% to 1.4%.
In particular, this forecast is based on the condition that only the basic (universal) tariff of 10%, which the Trump administration imposed worldwide, will be maintained, and the reciprocal tariffs of 20% to be imposed on the EU and the tariffs of 25% on steel and automobiles will be exempt.
It has been analyzed that even in the 'best-case scenario' where the ongoing tariff negotiations between the United States and the EU are concluded, a hit to growth is inevitable.
Valdis Dombrovskis, the EU Commissioner for Economy, noted in a press conference that this is "an uncertainty not seen since the worst situation during the COVID-19 pandemic."
However, the inflation rate in the EU is expected to remain stable for the time being. Last year's consumer price inflation rate was 2.4%, and this year it is expected to reach the European Central Bank's (ECB) medium-term target of 2%, and to slow down to below 2% next year.