Goldman Sachs slashed its 2024 annual earnings growth forecast for Europe's STOXX 600 index to 2% from 6% on Friday, citing risks from rising corporate taxes and potential trade tariffs.

An escalation in trade tariffs would knock off up to 9 percentage points from the European benchmark equity index's earnings growth in 2026, Goldman strategists said.

Additionally, rising corporate taxes in Europe, especially in France and Italy, represent a small negative for earnings, while the latest stimulus measures from China are not likely to have a meaningful near-term impact on luxury spend, strategists said.

Goldman expects the annual profit of STOXX 600 components to grow by 3% in 2025 and by 4% in 2026-2027.

(Reporting by Medha Singh in Bengaluru; Editing by Amanda Cooper)