A recent Reuters poll indicates the eurozone economy is projected to grow by 0.9% in 2025 and 1.3% in 2026, remaining largely unchanged from earlier estimates of 0.9% and 1.2%.
The European Central Bank (ECB) is expected to reduce the deposit rate to 2.00% by the end of 2025, as predicted by 40 out of 75 economists.
Currently, the ECB’s deposit facility rate stands at 2.50%, which was decreased by 25 basis points in the latest monetary policy meeting, marking the sixth rate reduction since June 2024.
Economic Growth Projections
These forecasts suggest a stabilisation in expectations for the eurozone economy, with only minor adjustments to previous growth projections. A modest expansion of 0.9% in 2025, followed by an improvement to 1.3% in 2026, indicates restrained momentum rather than any dramatic acceleration. The consistency between the latest figures and prior estimates points to an outlook that, while not deteriorating, also does not imply sudden strength in economic conditions.
Monetary policy, meanwhile, continues to ease. The European Central Bank has already adjusted the deposit rate down to 2.50%, marking the sixth reduction since June 2024. The expectation that it will reach 2.00% by the end of 2025 underscores confidence that inflationary pressures are under control, warranting further adjustments. A total of 40 out of 75 economists see this trajectory unfolding, a clear sign that consensus favours another set of moves in this direction.
The recent cut of 25 basis points aligns with previous decisions, reinforcing the pattern of measured reductions. With six rate cuts now completed, central bankers appear committed to ensuring financial conditions remain supportive. However, the remaining economists in the survey evidently hold a different view, which implies some uncertainty regarding how central policymakers will assess inflation and broader conditions in the months ahead.
Monetary Policy Outlook
For those navigating price movements, this environment presents a well-defined path. The ECB’s decisions, combined with steady economic forecasts, create identifiable parameters. The likelihood of another adjustment in borrowing costs provides a reference point for calibrating expectations, particularly as discussions on policy shifts continue. By the time the year concludes, a rate of 2.00% may well be in place, should this trend persist.
These adjustments, taken together, outline a framework in which rate decisions are transparent, albeit influenced by shifts in data. The direction of monetary loosening remains evident, though whether all anticipated cuts materialise exactly as forecast will depend on forthcoming developments.
