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Regional Economic Outlook for Europe, April 2025
The global economy is undergoing substantial changes, driven by fundamental shifts in trade policies. This comes at a time of deep structural transformations related to aging populations, high energy costs, and technological change. Europe’s economy is affected by these developments as it has only now begun to recover from recent shocks, its public spending needs are rising, public debt is high, and medium-term growth prospects are weak. The April 2025 outlook presents a downgrade in growth rates for the region, alongside a faster approach of inflation to targets. Risks to the outlook are to the downside and relate to a worsening of trade disputes and uncertainty. To navigate these turbulent times, Europe must prioritize the preservation of openness, manage the impact of policy shocks and market volatility through balanced macroeconomic policies, and complete its single market while addressing national growth reforms. The potential benefits of these actions could be substantial.
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