Economists Slash Eurozone Growth Forecasts as U.S. Tariffs Shake Outlook

Date: 04 April 2025 - 22:53

News ID: ۱۳۸۰۹۴

BRUSLES (Euronews) -
Economists are slashing eurozone growth forecasts after Trump’s 20% tariffs on EU exports. Weaker trade, confidence, and investment now dominate outlooks, boosting expectations for ECB rate cuts, with April seen as likely. Inflation risks take a back seat for now.
Donald Trump’s announcement of sweeping 20% tariffs on European exports has prompted economists to slash their eurozone growth forecasts, warning of a looming global slowdown with sharp regional fallout.
Experts broadly agree that the tariff shock will weigh on consumption and investment, while inflation concerns are likely to take a back seat as deteriorating growth dynamics dominate.
This shift strengthens the case for the European Central Bank (ECB) to accelerate its rate-cutting cycle, with the likelihood of an April move increasingly priced in.
ABN Amro economists, led by head of macro research Bill Diviney, now expect a significant slowdown in European economic activity.
“The EU has been hit with a 20% tariff. We expect this to drive a sharp fall in exports to the U.S. over the coming months, and we are significantly downgrading our 2025 growth forecast on the back of this,” the team said.
According to the Dutch bank, quarterly growth is expected to remain close to zero in the near term, with a strong likelihood of contraction, although frontloading effects may obscure the precise timing.
“We expect the lowest point for growth to occur in the third quarter,” Diviney said. “A recovery should begin towards the end of the fourth quarter and gain momentum in 2026.”