European Economy forecast – June 2025

Europe faces a modest growth outlook in the short term, as uncertainty weighs on business investment and consumer confidence.

Overview Europe faces a modest growth outlook in the short term, with GDP growth expected to increase by around 0.9 percent in 2025. There are growth hotspots. Spain has been a standout performer. And many Central and Eastern European (CEE) economies are expected to continue growing at above-average rates. Lower energy prices and weaker demand could result in the ECB cutting rates in the second half of 2025 as inflation returns closer to its 2 percent target. US trade tariffs will have ...

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Authors: Yael Selfin

Published Date: 11 June 2025