The International Monetary Fund estimates that the impact of customs duties on economic growth will be significant in the European Union, but more acute in the countries of the eastern region, more exposed to the trade war due to their strong dependence on production, reports the EFE agency.

The Director of the IMF’s European Department, Alfred Kammer, signaled on Friday, in a press conference, that this tax conflict will mean “a significant decrease” for the EU, which, according to the international institution, will grow by 1.2% this year and by 1.6% in 2026, which will represent a reduction of two tenths in both cases compared to the October estimates and in line with the data published this week on the euro area, according to Agerpres.

Kammer emphasized once again that the large volume of investments expected in infrastructure or Defense, especially in Germany, will help counteract the effects of the taxes.

However, the effects of the tariff dispute initiated by the US will be felt more in the region of central, eastern and southeastern Europe, in which the IMF also includes non-EU countries, such as Serbia, Moldova or Albania.

For this region, the IMF estimates a growth of 2.4% and 2.7%, respectively, by 2026, which represents a decrease of seven and five tenths, respectively, compared to previous forecasts, due to “the weight of the manufacturing sector in these countries”, Kammer pointed out.

The institution’s analysis also warns about the collateral effects in Europe of the trade conflict between Beijing and Washington, so that its preliminary estimates indicate “an increase in imports from China of about 0.25% of EU GDP in the short term”, but considers that the impact of these diverted flows “appears to be of a manageable magnitude”.

As for recommendations for Europe, Kammer insisted on what the IMF said at the start of the spring meeting: the need for better integration in the EU, including the strengthening of a barrier-free internal market.

“The more trade for the EU, the better,” said Kammer, who praised Brussels’ efforts to try to conclude new free trade agreements with different countries and regions as soon as possible, in order to diversify and strengthen its supply chains.

On the monetary front, the economist stressed that the 2% inflation rate in the EU is expected to be reached in the second half of this year, earlier than previously estimated, due to weakening demand and falling energy prices, and the financial body recommends that the European Central Bank cut interest rates by another quarter of a point and keep them, for now, at 2%.

Also, in fiscal terms, the institution recommends that the EU continue fiscal consolidation, continue to generate reserves and room for maneuver regarding pressures related to expected long-term spending, targeting the aging population, the energy transition or higher amounts for Defense.