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JPMorgan Follows Goldman In Raising Euro Area’s 2025 Growth Forecast

by THEFUTURE.TEAM

March 10, 2025

JPMorgan has joined Goldman Sachs in revising its economic growth forecast for the euro area in 2025, increasing it by 0.1 percentage point to 0.8%. For 2026, the bank now expects growth of 1.2%, an upward revision of 0.3 percentage points.

“This revision is primarily driven by Germany, but we also anticipate slightly stronger growth across the rest of the region due to spillover effects and a somewhat looser fiscal policy,” JPMorgan economists stated in a note released late Friday.

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Last week, German political parties negotiating to form a new government reached an agreement to relax fiscal rules, potentially triggering a borrowing surge of nearly one trillion euros to finance defence and infrastructure investments.

However, JPMorgan cautioned that uncertainty surrounding Donald Trump’s tariff policies could weigh on economic growth in the coming months. Additionally, the bank projects a slight increase in euro area inflation for both this year and next.

On Thursday, the European Central Bank (ECB) made its sixth rate cut since June, lowering the deposit rate to 2.5%. Despite this, the ECB warned of “phenomenal uncertainty,” citing risks such as trade wars and increased defence spending, which could drive inflation higher and potentially delay further policy easing.

In its note, JPMorgan also revised its outlook for ECB rate cuts, no longer expecting a reduction in April. Instead, the bank now anticipates only two rate cuts this year—in June and September—compared to its previous forecast of three.

“We see risks that the potential imposition of U.S. tariffs on European goods could push the ECB toward a live decision in April and back to a back-to-back rate-cut approach,” JPMorgan added.

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Cyprus Unemployment At 4.2% In February 2026, Eurostat Data Show

Eurostat data show that Cyprus recorded a lower unemployment rate in February 2026, while rates in the euro area increased every month.

Strong Performance In Cyprus

Cyprus reported an unemployment rate of 4.20% in February 2026, down from 4.50% in February 2025. The number of unemployed declined from about 23,000 to 22,000 individuals over the same period.

Euro Area Trends And Broader EU Dynamics

Across the euro area, the seasonally adjusted unemployment rate rose to 6.20% in February 2026 from 6.10% in January. On an annual basis, the rate declined from 6.30% in February 2025. Across the European Union, unemployment stood at 5.90% in February 2026, compared to 6.00% a year earlier.

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Youth And Gender Disparities

Youth unemployment in the EU reached 15.30%, with 2,957,000 individuals under 25 recorded as unemployed. Female unemployment in the EU increased to 6.10% in February from 6.00% in January, while the male rate remained at 5.70%. Similar trends were observed in the euro area.

Conclusion: A Mixed Economic Landscape

Monthly data show an increase in the number of unemployed by 137,000 in the EU and 93,000 in the euro area. Annual figures indicate a decline in unemployment rates, while Cyprus maintains a lower level compared to EU and euro area averages.