BRUSSELS: The eurozone economy showed unexpected resilience in the second quarter of 2025, growing by 0.1 percent despite escalating trade tensions with the US, according to official data released Wednesday. The slight expansion defied analyst expectations of stagnation, though economists warn that newly imposed tariffs could dampen future growth.
The EU’s statistics agency Eurostat reported mixed performances across the bloc. France, Europe’s second-largest economy, grew by 0.3 percent, exceeding forecasts. Spain led with 0.7 percent growth, while Portugal expanded by 0.6 percent. However, Germany, the region’s economic powerhouse, unexpectedly shrank by 0.1 percent, and Italy also contracted by the same margin.
“The eurozone economy showed resilience despite US trade volatility,“ said ING Bank economist Bert Colijn. The growth follows a 0.6 percent expansion in Q1, though economists caution that Ireland’s volatile data skewed earlier results.
A recent US-EU trade deal, finalized Sunday, aims to prevent a full-blown trade war but imposes a 15 percent tariff on most EU exports. Analysts estimate this could reduce eurozone GDP by 0.2 percent. “Growth is likely to remain weak for the rest of the year,“ said Capital Economics’ Franziska Palmas.
France’s Economy Minister Eric Lombard highlighted domestic resilience, while negotiators push for exemptions on alcohol tariffs. The deal’s finer details, including which goods avoid duties, remain unresolved. - AFP
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