16 April | Euro

UBS lifts eurozone 2025 GDP outlook from 0.5% to 0.7% as US halts import tariffs

UBS lifts eurozone 2025 GDP outlook from 0.5% to 0.7% as US halts import tariffs

UBS has revised its eurozone GDP forecast for the third time in just seven days, highlighting extreme uncertainty driven by US President Donald Trump’s tariff policies and potential retaliatory measures from the EU.

On Monday, UBS upgraded its eurozone growth outlook, raising 2025 and 2026 projections by 0.2 percentage points to 0.7% and 1.0%, respectively, while maintaining its 2027 forecast at 1.5%. UBS attributed the revision to the suspension of reciprocal US tariffs on most trading partners. The temporary rollback of these measures means their negative impact on eurozone GDP in 2025 could be halved to just 0.2 percentage points.

If no tariff agreement is reached within 90 days, the EU will almost certainly impose retaliatory measures. This would not only slow the bloc's economic growth but also create additional inflationary pressures. UBS analysts warn that long-term, this scenario could trigger further escalation in trade tensions.

Anton Volkov MarketCheese
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