S&P Global: Core Policy Rate in Eurozone Expected to Drop to 2.5% Before Summer 2025

Forex - Credit rating agency S&P Global forecasts that GDP growth in the Eurozone will be 0.8% in 2024 and 1.2% in 2025. It claims that the main policy interest rate will reach 2.5% before the summer of 2025.

In its report titled "Eurozone Economic Outlook Q1 2025: 2025 Will Be a Game Changer," published today, S&P Global predicts that Germany will lag behind its Eurozone counterparts and that Spain will continue to perform better.

Sylvain Broyer, Chief Economist for S&P Global Ratings EMEA, stated, "The long-standing period of stable macroeconomic forecasts may come to an end as new leaders in the US, EU, and Germany may make decisions that could reshape the economic outlook regarding tariffs, defense, and overall spending in early next year."

Broyer indicated that they expect the European Central Bank to lower interest rates faster than previously anticipated due to the ongoing weak confidence and the ability to better assess the disinflation trajectory. He commented, "However, we do not expect the extent of the rate cuts to exceed our previous forecast. Compared to our prior expectation of September 2025, we project that the main policy interest rate will reach 2.5% before the summer of 2025."