Macroeconomic situation in the EU
The EU economy in 2025 faces a number of challenges affecting its growth and stability. According to a Bloomberg survey, the Eurozone’s gross domestic product (GDP) is expected to grow by 1%, a slight improvement on 2024. The main factors affecting economic developments include falling inflation, the European Central Bank’s (ECB) monetary policy, geopolitical tensions and trade relations with global partners.
Inflation and monetary policy
Inflation in the euro area reached 2.5% in January 2025, a slight increase from 2.4% in December. The rise in prices is primarily driven by rising energy and some commodity costs. Nevertheless, the ECB is expected to move to cut interest rates in an effort to stimulate economic growth and boost investment activity. This measure could help to stabilise the economy at a time when consumer demand remains relatively weak.
Euro exchange rate development
The exchange rate of the euro against other world currencies will be influenced by the ECB’s monetary policy, economic growth and global economic factors in 2025. According to the Czech National Bank’s (CNB) forecast, the koruna is expected to depreciate slightly against the euro, with the average exchange rate expected to be around CZK 25.6 to the euro in 2025 Q4.
External influences and trade relations
The EU’s foreign trade relations face uncertainties related to the new US trade policy. The introduction of tariffs on European goods announced by President Donald Trump poses a risk to the export-oriented economies of the euro area. Economists estimate that a 10% tariff on European goods could reduce eurozone GDP by up to 0.3%.
Conclusion and future prospects
The European economy is likely to see a modest recovery in 2025, but growth will remain below its long-term average. Continued structural reforms, investment in digitalisation and the green economy are expected to be key factors for future economic development. Geopolitical uncertainty, energy price volatility and a possible slowdown in global trade remain the main risks.
Future developments will depend on the effectiveness of measures taken by the ECB, national governments and the overall international economic situation.
