Challenges from low growth and diverging price and cost developments: Key takeaways from the EC's 2025 Alert Mechanism Report

The Alert Mechanism Report (AMR) is an annual EC report aimed at identifying and monitoring economic imbalances at an early stage. It comprises an economic and financial assessment based on an economic reading of a set of macroeconomic indicators. This years’ report (published in December 2024) focused on the heterogeneous implications of the fading inflationary pressures across the EU. Nominal GDP growth provided favourable denominator effects to private and public debt ratios, but future developments need monitoring due to less favourable growth-interest-rates differentials. At the same time, newly emerging concerns are related to divergences in costs and prices across Member States, which affect both intra-Union and external competitiveness.