According to media reports, US-based investment banking company Goldman Sachs has revised down its economic forecasts for the euro area, particularly Germany, while also reducing its economic forecast for the UK, following the re-election of Donald Trump and his proposed protectionist policies, which will hurt Europe’s economic standing.
The bank now expects GDP in the euro area to expand by 0.8 percent in 2025, down from the 1.1 percent forecast previously. The bank noted that much of the growth drag would come from higher trade policy uncertainty.
Goldman Sachs forecasts that Germany’s GDP will grow by just 0.5 percent in 2025, down from the previous prediction of 0.9 percent, due to trade tensions exacerbated by Trump’s protectionist measures. A slowdown in Germany, which is the largest economy in Europe, could trigger a broader economic slowdown in the region.
For the UK, which is already being affected by the uncertainties following Brexit, the bank has downgraded its growth forecast for 2025 to 1.4 percent from 1.6 percent.