Fashion
Eurozone GDP growth to stay subdued at 1.1% in 2025: S&P
After 2025, the growth is expected to accelerate above the potential, reaching 1.4 per cent in 2027. Lower policy rates, strong private balance sheets that translate into a resilient labour market, and expansive fiscal policies will provide medium-term tailwinds.
“Our forecasts have only changed slightly since our last update in June 2025. The US and EU administrations’ trade deal has not altered the macroeconomic picture much. Our higher GDP growth forecasts for 2025 reflect a larger GDP carryover at the end of 2024 due to data revisions in some countries,” S&P Global Ratings said in its latest report titled, ‘Economic Outlook Eurozone Q4 2025: Recovery Continues Despite Consumer Hesitancy.’
Eurozone GDP growth is forecast at 1.1 per cent in 2025, with recovery accelerating to 1.4 per cent by 2027, supported by lower rates, strong labour markets, and fiscal policy, according to S&P Global.
Inflation is projected at 2.1 per cent in 2025 before easing.
Risks include higher US tariffs, geopolitical tensions, and weak confidence, though impacts vary across countries.
The eurozone economy remained resilient in the second quarter (Q2) of 2025. However, this is largely because exports to the US—which were front run ahead of tariffs in the first quarter—were slow to reverse in the second quarter. The report believes this reversal will extend into the third quarter.
The euro has appreciated more quickly than expected, largely owing to market concerns about the independence of US monetary policy. While this has given European consumers an extra boost via lower energy prices, it has not prompted a downward revision of inflation forecasts.
Strong labour-market conditions are expected to keep real wage growth above productivity for some time, sustaining inflationary pressure over the medium term.
S&P Global Ratings projects inflation to ease to 1.8 per cent in 2026 and 1.9 per cent in 2027, aligning closely with the European Central Bank’s (ECB) 2 per cent target. Barring external shocks, the ECB deposit facility rate is considered to have bottomed out at 2 per cent in the current rate-cutting cycle. Quantitative tightening is also nearing completion, which may ease long-term yields on euro-denominated government bonds.
Key risks to the baseline growth outlook include heightened tariffs, geopolitical tensions, and weak consumer confidence in certain European economies. Additional spillover effects may emerge from slower growth among Europe’s major trading partners, particularly the US, added the report.
Inflation risks remain two-sided: it could rise further in the event of escalating trade tensions, fiscal stimulus overlapping with labour-market bottlenecks, or geopolitical shocks disrupting commodity markets. Conversely, it could fall if trade diversions favour Europe or the euro appreciates more sharply than expected.
Following the recent EU–US trade announcement, baseline assumptions now include a maximum US tariff of 15 per cent on most manufactured goods. This compares with June 2025 assumptions of 10 per cent on all goods.
Despite these changes, the macroeconomic implications remain largely unchanged. At the aggregate EU level, the direct trade impact is estimated at around -0.4 per cent of GDP, only slightly lower than the -0.5 per cent implied by the April 2 announcement. Nevertheless, tariffs are now about eight times higher than they were before April, when the US levied an average tariff of less than 2 per cent on European imports.
Importantly, the tariff burden will vary across countries. Ireland and Belgium face fewer negative impacts. In contrast, Switzerland—though not an EU member—has seen its outlook deteriorate sharply after the US imposed 39 per cent tariffs, significantly affecting its growth prospects.
Fibre2Fashion News Desk (SG)
Total apparel shipments fell by 2.66 per cent year on year to $425.44 million in January 2026, compared with $437.07 million in the corresponding month of 2025. The performance underscored uneven global demand conditions that continue to influence sourcing patterns and order flows for Sri Lankan manufacturers.
Sri Lanka’s apparel exports declined 2.66 per cent YoY to $425.44 million in January 2026 amid weak global demand.
Shipments to the US and EU softened, while the UK remained stable with slight growth.
Other markets saw sharper contraction.
JAFF highlighted DCTS benefits and tariff changes while suggesting diversification and efficiency to sustain competitiveness.
Exports to the United States, the country’s largest market, decreased by 2.73 per cent to $165.11 million, while shipments to the European Union excluding the United Kingdom, declined by 1.93 per cent to $126.99 million. In contrast, exports to the UK remained broadly stable, rising marginally by 0.23 per cent to $61.71 million. Apparel shipments to other markets dropped more sharply by 6.07 per cent to $71.63 million.
JAAF noted that the UK’s steady performance offers a constructive signal for the sector, particularly as the revised Developing Countries Trading Scheme (DCTS), effective January 1, 2026, is expected to enhance sourcing flexibility and strengthen Sri Lanka’s competitive position in the British market.
The industry body also highlighted the introduction of a uniform 10 per cent temporary tariff in the US market as a relatively supportive development, reducing the impact of previously higher country-specific rates and providing greater short-term pricing predictability for exporters.
Commenting on the January outcome, JAAF said the moderate decline reflects ongoing volatility in global demand. The association emphasised that the industry remains committed to reinforcing resilience through market diversification, product innovation and operational efficiency, while collaborating with stakeholders to sustain Sri Lanka’s standing as a reliable apparel sourcing destination.
Fibre2Fashion News Desk (KUL)
Profitability remained robust despite a more challenging trading backdrop. Group EBIT stood at €913.4 million, broadly stable year on year (YoY), translating into a 29.2 per cent margin versus 29.5 per cent in FY24. Net profit reached €626.7 million compared with €639.6 million a year earlier, reflecting higher net financial expenses, while maintaining a 20 per cent margin.
Moncler has reported revenues of €3.13 billion (~$3.69 billion) in FY25, up 3 per cent at constant exchange rates, with net profit of €626.7 million (~$739.5 million).
Asia led regional growth, while DTC channels strengthened across brands.
Q4 revenues rose 7 per cent, driven by robust Moncler and Stone Island performance, as the group prepares for continued investment and leadership transition.
Regionally, the group recorded strong momentum in Asia, where revenues rose 7 per cent at constant exchange rates to €1.42 billion, supported by demand in China and Korea and a recovery in tourist flows. The Americas increased 5 per cent to €391.1 million, whereas Europe, Middle East and Africa (EMEA) declined 3 per cent amid subdued tourism-related traffic, Moncler said in a press release.
Channel performance highlighted the continued shift towards direct engagement. Moncler’s direct-to-consumer (DTC) revenues rose 4 per cent to €2.36 billion, accounting for nearly 87 per cent of brand sales, while wholesale declined 4 per cent as the group continued to enhance distribution quality. Stone Island’s DTC channel expanded 11 per cent to €226.4 million, whereas wholesale decreased 4 per cent.
The group’s financial position strengthened further, with net cash reaching €1.46 billion at year-end after dividend payments of €353.2 million. The board proposed a dividend of €1.4 per share and approved the consolidated sustainability statement.
Remo Ruffini, chairman and CEO of Moncler, said: “Moncler and its board of directors wish to express their most sincere thanks to Gabriele Galateri di Genola for his dedication and the highly valuable contribution he has made throughout his more than ten-year term of office. His significant experience, the vision developed over many years in senior leadership positions at leading industrial and financial organisations, as well as his constant commitment to good governance, have represented a key point of reference for our work. With gratitude, we extend our best wishes to Gabriele Galateri di Genola for the future.”
In the fourth quarter (Q4), the group delivered accelerated momentum, with revenues rising 7 per cent at constant exchange rates to €1.29 billion (~$1.52 billion). Moncler brand revenues reached €1.17 billion, up 6 per cent, while Stone Island posted €123.1 million, surging 16 per cent with double-digit growth across all regions.
Moncler’s DTC channel advanced 7 per cent despite a demanding comparable base in the quarter, supported by Asia and the Americas, while wholesale returned to growth, rising 2 per cent. Stone Island recorded broad-based acceleration, with DTC revenues increasing 16 per cent and wholesale climbing 17 per cent, partly reflecting delivery timing shifts from the previous quarter.
Looking ahead, the group emphasised continued investment in brand development and organisational strengthening, including the appointment of Leo Rongone as group chief executive officer from April 2026, as it seeks to sustain long-term growth and value creation.
Fibre2Fashion News Desk (SG)
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