AIECE report by KOPINT-TÁRKI experts

The Spring 2025 General Report of the Association of European Economic Research Institutes was authored by Katalin Nagy and Péter Vakhal of the Kopint-Tárki Institute, offering a comprehensive macroeconomic outlook for the European economy. The report – presented at AIECE’s conference in Oslo on 15-17 May 2025 – includes detailed assessments from member institutes on key cyclical, policy, and structural issues. A summary of the event reports that on average, AIECE member institutes forecast EU GDP to grow by 1.2% in 2025 and 1.5% in 2026 which is seen as a bit more optimistic than those presented in the OECD’s March 2025 Interim Report and the IMF’s Spring 2025 World Economic Outlook.

	2024 Fact	2025 Forecast	2026 Forecast
GDP	0.5%	0.4%	2.5%
Gross Fixed Capital Formation	-11.1%	-4.8%	3.0%
Industrial Production	-4.0%	-1.7%	3.0%
Gross Salaries	13.2%	8.8%	9.5%
Unemployment Rate*	4.5%	4.5%	4.4%
Current+Capital Account**	2.6%	2.0%	1.0%
General Government**	-4.9%	-4.8%	-4.8%
Consumer Price Index*	3.8%	4.7%	3.9%
MNB Base Rate***	6.5%	6.5%	6.0%
10-Year Yield***	6.55%	7.0%	6.5%

*annual average **in % of GDP ***at year-end

02.09.2025. GDP: strong consumption growth, external position deteriorates

The second estimate confirms that the unadjusted GDP was up 0.1% in the second quarter of 2025, while the seasonally and calendar-adjusted GDP climbed 0.4%. On the expenditure side, final domestic use shifted into higher gear, supported by household consumption expenditures, but also the upturn in inventories and expanding transfers in kind.
However, the growth impact of domestic demand was virtually offset by the downward effect of net export, mostly due to the surge in the import of goods.
On the production side, the accelerating contraction in drought-stricken agriculture was offset by the upturn in construction. While industry keeps suffering, market services growth gathered some speed.
We currently expect the GDP to grow by approximately 0.5% this year.

30.07.2025. GDP expanded at a symbolic rate

According to the first estimate, in the second quarter of 2025, the unadjusted GDP volume was up 0.1% year-on-year, while the seasonally and working day adjusted volume climbed 0.2%. Compared to the previous quarter, GDP expanded by 0.4%. On average, the unadjusted GDP stagnated in the first half of 2025, while seasonally and calendar-adjusted GDP was down 0.1% over the same period.
On the production side, services were the main drivers of economic growth while industrial and agricultural production weighed on GDP growth. On the expenditure side, private consumption may have gathered some steam, while investments likely continued to contract, amid the negative growth contribution of net export.
For 2025 as a whole, Kopint-Tárki expects the GDP to expand at a very modest rate of 0.5%, since the prospect of a significant upturn in industry and exports is increasingly unlikely.

03.06.2025. GDP: Private consumption growth decelerates amid continuing fall in investments

The second estimate confirms that the unadjusted GDP stagnated in the first quarter of 2025, while seasonally and calendar-adjusted GDP volume was down 0.4%. Compared to the previous quarter, the GDP contracted by 0.2%, the fifth worst outcome among the EU member states.
On the expenditure side, the ongoing decline in fixed capital formation remained the main drag on growth. Meanwhile, household consumption expenditures continued to grow but the 4.1% growth is well below the average rate in 2024. Decelerating real wage growth seems to make an impact on consumption. Actual private consumption only climbed 2.2% in the first quarter. The overall final domestic use increased at a symbolic rate of 0.4%. This was, however, cancelled out by the negative growth contribution of net exports. On the production side, services continued to be the only growth driver, but even the services growth rate weakened to around 1% in the first quarter. The industrial recession and the fall in construction activity continued.
The Kopint-Tárki currently expects an annual growth rate of around 1% in 2025, but downside risks abound.

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AIECE report by KOPINT-TÁRKI experts

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1112 Budapest, Budaörsi út 45.

telefonszám: +36 1 309 2695,faxszám: +36 1 309 2647

e-mail: info@kopint-tarki.hu

telefonszám: +36 1 309 2695,
faxszám: +36 1 309 2647