Eurozone economic growth to weaken this year and next — Standard Chartered forecast

Christopher Graham of Standard Chartered reports that while the eurozone economy showed strong growth in Q1 2025, this does not guarantee sustained performance through the year. Economic momentum is weakening, recession risks are rising, and the 2026 growth forecast has been revised down from 1.2% to 1.0% due to trade uncertainty. However, the outlook for 2027 appears brighter, with GDP potentially rising 1.6% as Germany's fiscal stimulus and increased defense spending take effect.

The analyst highlights risks from US tariff policy and global trade tensions. Although, supported by strong Q1 data, the 2025 growth forecast for the bloc remains at 0.8%, recession risks persist amid ongoing US-EU trade negotiations. The base case anticipates tariffs in the 10–20% range, but a worse outcome could slow the region's GDP recovery further.