Such conclusions are contained in a study by one of the largest investment banks in the world, the American Goldman Sachs, cited by Euronews.
Economists of the bank Giovanni Pierdomenico and Sven Jari Stein note that the turning course of fiscal policy in Germany and increased macroeconomic uncertainty in the U.S. contribute to a change in investor sentiment.
With this in mind, Goldman Sachs has raised its forecast for eurozone growth for 2027 by 1.2% YTD, while lowering its forecast for the US by 1.7% over the same period. It is also noted that portfolio investment inflows into Europe have increased and the euro has strengthened markedly against the dollar.
At the same time, the bank’s experts warn of the serious risks that remain for the European economy. Europe still faces serious structural problems, notes Goldman Sachs. High energy prices continue to undermine the competitiveness of European industry. Low investment in high-growth industries, fragmented regulatory frameworks and slow productivity growth further reduce potential.
In addition, China, once a key export market, is increasingly becoming a competitor, undercutting Europe’s manufacturing base.
However, there are reasons for optimism, the bank said. Increased public investment, triggered by the NGEU program and Germany’s €500 billion infrastructure plan, could support medium-term growth.
Europe also remains a global leader in pharmaceuticals and has significant untapped potential in capital markets integration, digitalization and green infrastructure, Goldman Sachs analysts said.
But the economists see continued efforts to deepen the single market based on the European Commission’s “Competitiveness Compass” as vital steps to ensure future growth.
“European policymakers have an opportunity to anchor an improving macroeconomic picture with reforms that will lead to a long-term improvement in Europe’s economic performance,” said Giovanni Pierdomenico.
Goldman Sachs remains constructive on Europe’s medium-term outlook, forecasting above-consensus eurozone growth for 2025-2028.
