The EU is growing beyond expectations, but it is entering a period of fiscal vulnerability and trade tensions.
Brussels, November 17, 2025 The economy of the European Union has exceeded estimates in the first nine months of the year, but the Commission warns that this positive development hides major risks: high trade tariffs imposed by the United States, worsening fiscal outlooks, rising public debt, and a global uncertainty that "will remain a defining characteristic of the coming years". These are the conclusions conveyed by Commissioner Valdis Dombrovskis at the presentation of the Autumn Economic Forecast, an exercise that captures a paradox: a resilient economy, but surrounded by hostile external factors and persistent internal imbalances.
The Commission estimates that the EU GDP will grow by 1.4% in 2025 and 2026, reaching 1.5% in 2027. The good performance in the first three quarters is mainly attributed to the advance of exports ahead of the increase in American tariffs, but also to an internal resilience above expectations.
However, the Commissioner warns that this development cannot be considered guaranteed. "This forecast is overshadowed by significant uncertainty, and the road ahead is full of potential obstacles," said Dombrovskis.
In a global environment where trade barriers have reached historic levels, the Commission notes that the EU, although it remains a very open economy, is directly exposed to the trade policies of its main partners. Tariffs applied to European exporters in the US market currently reach about 10%, above the levels of the previous Trump administration. The forecast is based on the assumption that all announced tariffs will remain in effect during the analyzed period.
Inflation in the euro area is expected to decrease to 2.1% in 2025, stabilizing around 2% in 2026–2027, while in the EU the value will remain marginally higher. The Commission observes, however, that the differences between states are increasing, with the highest values forecasted in Central and Eastern European countries, where wage cost pressures and more expensive energy push figures above the EU average.
Real wage growth returns to positive territory due to lower inflation, and the unemployment rate is estimated to drop to 5.8% in 2027, after remaining at 5.9% in 2025–2026.
The Commission projects a gradual deterioration of the fiscal position. The EU's aggregate budget deficit rises from 3.1% of GDP in 2024 to 3.3% in 2025 and then to 3.4% in 2026–2027. Public debt increases from 82% of GDP in 2024 to 85% in 2027, as a result of persistent deficits and higher financing costs.
Eleven member states will exceed the 3% threshold in 2025: Belgium, Germany, France, Latvia, Malta, Austria, Slovakia, Finland, Hungary, Poland, and Romania. Italy returns exactly to 3% in 2025, with subsequent decreases anticipated.
On the spending side, defense becomes a determining factor. States' allocations for the military sector increase from 1.5% in 2024 to 2% in 2027, but the Commission specifies that the figures do not include plans announced after October 31 or potential funding through the SAFE program, suggesting a possible upward revision in the next forecasts.
The Autumn Economic Forecast is published twice a year and provides a detailed assessment of macroeconomic developments in the Union. The document includes forecasts on growth, inflation, the labor market, and public finances for the period 2025–2027, based on data available until October 31, 2025.
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