EU growth continues to build momentum, driven mainly by domestic demand. Fiscal deficits are edging up, and debt remains elevated. Inflation is revolving around the 2 % target, prompting the ECB to keep rates unchanged. Labour markets remain tight, with unemployment stable at record-low levels and employment at historic highs. US tariffs are expected to weigh only modestly on EU growth, affecting exports, with limited and short-lived effects on GDP, prices and the trade balance. Regarding EU funding, the delivery of the national recovery plans is advancing, but more than half of all milestones and targets are still outstanding. Thus, it is crucial for Member States to accelerate implementation in 2026 to secure the full economic impact of investment and reform measures. Source : © European Union, 2025 - EP Read more