16:05, 18/08/2025
The eurozone economy recorded unexpected growth in the second quarter of 2025.
People shop at a supermarket in Frankfurt, Germany. (Photo: Xinhua/VNA)
According to official figures released by Eurostat, from April to June 2025, the economy of the 20-member eurozone expanded by 0.1% compared with the previous quarter, outperforming analysts’ forecasts of zero growth. The economy of the European Union (EU) as a whole, with 27 member states, also grew by 0.2% quarter-on-quarter.
Notably, France – the EU’s second-largest economy – exceeded expectations with 0.3% growth in the second quarter, while Spain emerged as a “bright star”, posting an impressive 0.7% increase. By contrast, Germany, the region’s economic powerhouse, saw its economy unexpectedly shrink by 0.1%, struggling under the weight of high public debt. Italy also recorded a similar contraction.
The better-than-expected performance of both the eurozone and the EU has brought positive signals to Europe’s economic outlook. France’s second-quarter GDP showed resilience despite pressure from the EU-US trade tariff agreement. Growth in France exceeded forecasts, driven by a rebound in household spending, which became the key engine of expansion.
Earlier in the year, Ireland also posted strong gains, with GDP surging 9.7% in the first quarter thanks to booming pharmaceutical exports to the US. Adding further positive signals for the region were Malta, which grew by 2.1%, and Cyprus, which recorded growth of 1.3%.
Inflation in the eurozone edged up slightly to 2% in June, in line with analysts’ forecasts and within the European Central Bank (ECB)’s target. Excluding volatile components such as energy, food, alcohol, and tobacco, core inflation held steady at 2.3% in May, a key measure used by the ECB to assess underlying price pressures. The ECB expects inflation to remain on target this year, but warned of potential risks stemming from trade tensions and the unpredictable impacts of artificial intelligence.
After weathering significant headwinds – most notably trade tensions with major partners and the impact of global crises – Europe’s economy has remained sluggish for the past two years, particularly due to soaring energy costs following the conflict in Ukraine.
Although showing stronger signs of recovery, the regional economy continues to face considerable risks. The International Monetary Fund (IMF) has revised down its annual growth forecast for the eurozone to 0.8% in 2025. EU officials, however, expressed hope that the trade tariff agreement reached with the US at the end of July will provide greater stability for businesses and help avert further economic losses.
Analysts caution that Europe’s economy will still feel the impact of the deal, as a 15% tariff remains in place for most of the bloc’s exports. This rate is expected to shave around 0.2% off the region’s GDP, raising concerns that growth momentum may remain weak through the end of the year.
NDO