Eurozone Growth Slows to 0.2% in Q4

The Euro Area economy grew by 0.2% in Q4 2025, below earlier estimates of 0.3% and down from 0.3% in Q3, highlighting modest momentum despite easing inflation, lower interest rates, and resilience amid headwinds from US trade tariffs on EU imports. Household consumption rose 0.4%, up from 0.2% in Q3, while growth slowed for fixed investment (0.6% vs 1.3%) and public spending (0.5% vs 0.7%). Both inventory changes and net trade subtracted 0.1 percentage points each from GDP growth. Among major economies, Spain led with 0.8% growth, driven by strong household consumption and investment, followed by the Netherlands at 0.5%. Germany and Italy each grew 0.3%, while France lagged at 0.2%. On an annual basis, Eurozone GDP expanded 1.2% in Q4, slightly below the preliminary 1.3% and down from 1.4% in Q3. For full-year 2025, growth reached 1.4%, just below earlier estimates of 1.5% but accelerating from 0.9% in 2024.

The euro area economy expanded by 0.3% in Q4 2025, confirming earlier estimates and matching the pace recorded in the previous three months. The data underscore the bloc’s resilience amid easing inflation and lower interest rates, despite headwinds from US trade tariffs on EU imports. Among the region’s largest economies, Spain delivered the strongest performance, with output rising 0.8%, supported by solid household consumption and fixed investment. The Netherlands followed with a 0.5% expansion, largely driven by exports. Germany and Italy each posted growth of 0.3%, while France lagged behind with a 0.2% increase. On an annual basis, Eurozone GDP grew by 1.3%, slightly easing from 1.4% in Q3. For the full year 2025, the GDP expanded by 1.5%, accelerating from 0.9% in 2024. Looking ahead, both the European Commission and the ECB expect growth to moderate to around 1.2% in 2026 amid persistent geopolitical tensions and trade policy uncertainty, before edging higher to 1.4% in 2027.

The Eurozone economy grew by 0.3% quarter-on-quarter in Q4 2025, matching the pace of the previous quarter and slightly above market expectations of 0.2%, according to a flash estimate. Among the bloc’s largest economies, Spain led the gains, the strongest quarterly growth in a year, surpassing expectations of 0.6%, supported by robust household consumption and fixed investment. The Netherlands expanded by 0.5%, driven primarily by exports. Germany and Italy each grew by 0.3%, both beating forecasts, while France grew 0.2%, as expected, marking its weakest quarterly pace since Q1 2025. On an annual basis, Eurozone GDP rose 1.3%, above expectations of 1.2%. For full-year 2025, the Eurozone economy expanded 1.5%, up from 0.9% in 2024 and surpassing the European Commission’s 1.3% projection. Looking ahead, both the European Commission and the ECB expect growth to moderate to 1.2% in 2026 amid geopolitical tensions and trade policy uncertainty, before rebounding slightly to 1.4% in 2027.