The Eurozone economy grew by 0.3% in the first quarter of 2025 compared with the previous quarter – slightly below estimates of 0.4%, Eurostat said on Thursday.

The European Union as a whole also saw a 0.3% GDP increase compared to the previous three months. Despite the slight downward revision, this marks the fifth consecutive quarter of expansion for the euro area.

Year-on-year, GDP increased by 1.2% in the euro area and by 1.4% in the EU in the first quarter of 2025.

The Q1 statistics did not yet capture the full impact of US President Donald Trump’s sweeping tariffs that he announced on 2 April. Trump imposed a 10% baseline tariff, along with 25% levies on cars and metals on the EU. If Brussels and Washington do not reach a deal by early July, a higher tariff of 20% on all goods would come into force.

Tariffs have had an impact in the US though, where GDP in the first quarter shrunk by 0.1% when compared with the last quarter of 2024, Eurostat said.

But the global impact on Europe has been more muted. Germany’s reform of its fiscal rules has also had an impact. The German economy, which had shrunk by 0.2% in the last quarter of 2024, began the year with a increase of 0.2% over the last quarter.

Ireland was by far the fastest growing economy in Europe in the first quarter of 2025 with a growth rate of 3.2%. Slovenia, on the other hand, saw its economy shrink by 0.8% in the first quarter of this year.

Figures for Luxembourg were not made available by Eurostat.

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Alongside the GDP figures, Eurostat also reported on the labour market. Employment in the euro area increased by 0.3% in the first quarter of 2025 compared to the previous quarter, and by 0.8% year-on-year. For the EU, employment rose by 0.2% quarter-on-quarter.

The European Central Bank, which has cut interest rates three times this year, continues to monitor the situation closely, balancing the need to support growth against persistent, albeit moderating, inflationary pressures. The ECB’s benchmark deposit rate stands at 2.25%, with the next meeting of its interest rate setting committee scheduled for 5 June.