Eurozone economy grew more than expected in first quarter
The eurozone economy grew more than expected in the first quarter of 2025. A first estimate by the European statistics agency Eurostat shows 0.4 per cent growth for countries using the euro compared with the previous quarter. Economists had expected growth of 0.2 per cent, as in the previous quarter.
The Belgian economy grew by 0.4 per cent in the first quarter. This is much stronger growth than its neighbours France (+0.1 per cent), the Netherlands (+0.1 per cent) and Germany (+0.2 per cent). Spain topped the list with growth of 0.6 per cent.
For the EU as a whole, Eurostat reported lower growth of 0.3 per cent in the first quarter of this year. In the fourth quarter of 2024, the EU still recorded growth of 0.4 per cent. Sweden's economy stagnated, while Hungary's GDP actually contracted by 0.2 per cent.
Tariffs to slow down growth
The growth figures still provide little insight into the impact of US president Donald Trump's import tariffs, most of which were only announced at the start of the second quarter. Many of these tariffs have also been suspended pending the outcome of negotiations between the US and its trading partners.
As a result of tariff uncertainty, most economists expect growth in the eurozone to slow sharply in the second quarter. European Central Bank (ECB) president Christine Lagarde said last week that while the EU is on track to meet its inflation target, there are "shocks" that will "dampen GDP".
Still, Philip Lane, chief economist at the ECB, told Politico that despite the uncertainty of Trump's tariffs, he does not expect the eurozone to enter a recession. "It's still a growing economy," he said. "I think there are inflation risks on the downside, but I don't think we need to be too dramatic about it."
PHOTO © Kirill KUDRYAVTSEV / AFP
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