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The Eurozone economy unexpectedly grew by 0.3 per cent in the fourth quarter of 2025 despite geopolitical tensions and widespread uncertainty.
The pace of growth was better than the 0.2 per cent expected by economists and in line with the 0.3 per cent recorded in the previous three months. The Eurozone economy has now expanded for nine consecutive quarters.
“The Eurozone economy continued to show resilience at the end of 2025,” said Diego Iscaro, an economist at S&P Global Market Intelligence. Spain, which grew by 0.8 per cent in the fourth quarter, “continued to be the star performer”, he added.
Germany and France, which expanded at a pace of 0.3 per cent and 0.2 per cent respectively during the quarter, also beat expectations.
The European Central Bank recently raised its GDP forecast for this year to 1.2 per cent, and is widely expected to leave interest rates unchanged at 2 per cent at its first meeting of 2026 next week.
Eurostat on Friday did not publish a number for Eurozone growth in 2025 as a whole. But based on the fourth-quarter estimate, consultancy Oxford Economics calculated that the bloc’s economy expanded by 1.5 per cent last year, a notch higher than an ECB estimate published in December of 1.4 per cent.
“This is slightly above our estimates of the bloc’s potential growth, but nothing to write home about,” said Oxford Economics analyst Tomas Dvorak.
ECB president Christine Lagarde has repeatedly praised the Eurozone’s economic “resilience” despite US President Donald Trump’s tariffs.
Germany, Europe’s biggest economy, expanded last year for the first time since 2022 and is expected to accelerate further as the government borrows heavily to invest in infrastructure and defence.
“The German economy has emerged from recession,” said Commerzbank’s chief economist Jörg Krämer, although he warned that the country’s economic “crisis is not over yet”.
Spanish Prime Minister Pedro Sánchez said on social media that Friday’s figures confirmed his country was the fastest-growing advanced economy for the second consecutive year.
“We are closing 2025 with growth of 2.8%, double what is expected for the Eurozone, and in a strong position to maintain solid growth in 2026,” he wrote on X.
The euro was little changed after the data, down 0.5 per cent against a broadly stronger dollar at $1.191.
Traders’ interest rate expectations also barely shifted, with a roughly 25 per cent chance of a further quarter-point cut this year, according to swap markets.
Additional reporting by Barney Jopson in Madrid
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