The superior performance of the first quarter says little about the rest of 2025; The impulse of growth is likely to weaken. The 0.8% growth forecast for this year remains unchanged, but the short -term recession risks are high. The growth of 2026 has been reviewed down 1.0% (1.2%) due to the persistent effects of commercial uncertainty. The growth of 2027 has been reviewed down 1.6% (1.1%) as the German fiscal impulse and defense spending materialize, says Standard Chartered economist Christopher Graham.
Negative now, positive later
“Despite a strong start of the year, we think that the short -term perspective in the euro zone is fragile; we see a slower growth in the next quarters due to the effect of US tariff The recession risks are high in the next quarters, depending on the commercial negotiations between the US and the EU.
“As the euro zone gradually compensates for lost trade with the US through an expanded trade in other places, the impact of tariffs should decrease. This should be reflected in a quarterly growth improved in 2026, although the weak closure of 2025 and the persistent effects until the beginning of next year still lead us to reduce our annual growth forecast to 1.0% (from 1.2% previously). However, we see a more positive story. emerging in 2027, as the negative effects of trade continue to dissipate and the favorable winds of German infrastructure spending and defense spending at the continental level charge impulse.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
