European economy starts 2025 stronger than expected

The European economy surpassed expectations at the start of 2025. The European Commission shared in its most recent economic forecast that the economy had a stronger start than anticipated.

The European economy is expected to continue growing slowly in 2025, with an acceleration in 2026, according to the update. The Gross Domestic Product in the EU is expected to increase by 1.1 percent in 2025 and by 1.5 percent in 2026.

Due to global market conditions, EU exports are likely to grow by only 0.7 percent. However, the European Commission expects an increase of 2.1 percent in 2026.

The commission noted that there is increased uncertainty due to global trade tensions and climate-related disasters. These pose risks to the growth of the European economy.

The commission also wrote that easing trade tensions between the US and the EU, expanding trade, higher defence spending and market reforms to increase competitiveness are important to support the growth and resilience of the European economy.