A looming shadow of uncertainty in global trade policy is prompting a significant downgrade in investment forecasts and projected economic growth across the European Union, according to a newly released survey. The Economic Experts Survey (EES), conducted by the Ifo Institute and Econpol Europe, reveals a pervasive pessimism regarding the future trajectory of European economies.
The survey, which polled over 600 experts from academia, central banks and both the private and public sectors, anticipates a 4.7% decline in investment and a 0.6% reduction in the annual economic growth rate within the EU over the next five years. This represents a stark warning of the potential damage inflicted by ongoing trade tensions and protectionist measures.
“Imposing barriers to international free trade is demonstrably detrimental to economic prosperity” stated Ifo researcher Niklas Potrafke. “Tariffs and protectionism are poisons for economies, not just in Europe, but globally.
Germany is expected to suffer a particularly acute downturn, with projected investment declines exceeding the EU average – a 6.1% drop. Among the nations facing the most severe consequences are Poland, Ireland and Finland, all anticipating investment contractions of approximately 6.7% to 6.8%. France appears to be a relative outlier, with projected investment declines falling below the EU average at 4.0%.
The economic ramifications are not uniformly distributed. Ireland, Slovenia and Latvia are anticipated to experience notably diminished growth rates – a reduction of approximately 1.0% to 1.5%. Conversely, Croatia, Estonia and France are expected to see comparatively minor growth losses.
Despite a recent trade agreement between the EU and the U.S. reached in Turnberry on July 27, 2025, Ifo researcher Christian Gréus characterizes the prevailing sentiment as one of “very high uncertainty” regarding international trade relations. This underscores the inherent fragility of the recent détente and highlights the persistent anxiety within expert circles.
The situation poses a precarious outlook, potentially deteriorating further if the EU were to implement additional import tariffs. Survey respondents project that such a measure, particularly one involving a 10% EU import tariff, would trigger a cascade of negative consequences in 2025, including a 0.9% rise in inflation, a 0.2% increase in unemployment, a further 0.5% reduction in economic growth and an additional 0.9% decline in investment.
The EES findings paint a concerning image of a European economy grappling with the long-term effects of trade policy uncertainty, raising critical questions about the efficacy of current strategies and the potential need for a renewed commitment to open markets and international cooperation. The potential for further policy missteps looms large, threatening to derail any nascent signs of recovery and exacerbate existing economic vulnerabilities.