FACED with the ongoing trade war between the US and China, the International Monetary Fund (IMF) and dozens of other international institutions have begun bracing for a downward trend in global economic activity.
The wave of US protectionism has led the European Central Bank (ECB) to cut interest rates for the sixth consecutive time, bringing them down to 2.25%.
This move aims to counteract the negative economic effects of the ongoing trade war initiated by US President Donald Trump.
The Bank of Spain has also revised its economic outlook, with the President of the institution stating that “the ongoing tariff war will affect the Spanish economy,” though a recession has been “ruled out.”

The decision to cut interest rates is a clear sign that economic activity in the EU is slowing down.
“The general outlook for economic activity is faced with extreme uncertainty, and growth expectations have deteriorated due to the increase in tariff disputes threatening to slow down economic growth,” said Christine Lagarde, President of the ECB.
The ECB has cut interest rates by 1.75% since last June, while the US Federal Reserve has followed a more measured approach, reducing rates by just 1% since September last year.
Before the wave of US-imposed tariffs, the Spanish economy was outperforming major Eurozone counterparts.
Spain’s GDP grew by 3.2% in 2024, significantly outpacing France and Italy’s 1% growth and Germany’s 0.2% contraction.
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