Eurozone economy ends the year on strong footing - Sustainability confirmed in 2025
The eurozone's largest economies grew at a modest but steady pace last quarter as consumption and investment rose to offset weak exports and heightened uncertainty over erratic U.S. trade policy, data showed.
The figures signal remarkable resilience for a bloc of 350 million people that was expected to succumb to a trade war with the US, increased export competition from China and years of military conflict on its eastern border.
Yet every quarter of last year, the eurozone produced respectable - if not spectacular - growth despite industry and exports, the previous engines of expansion, struggling to regain their balance.
Spain continued to be the bloc's main driver, expanding 0.8% in the quarter, well above expectations for 0.6%, while Germany, the eurozone's largest economy, was also above forecasts, growing 0.3% in the quarter, versus economists' bets for 0.2%.
French GDP rose 0.2%, in line with forecasts, overcoming fears that political instability would weigh on sentiment. Meanwhile, Italy grew 0.3%, slightly above forecasts, and the Netherlands expanded 0.5%.
Other figures suggest the bloc started 2026 on a relatively strong footing. A key sentiment reading released on Thursday showed an unexpected rise, led by France and Germany, with broad gains across all major sectors.
Meanwhile, industry is showing signs of stabilization, households have finally started to reduce their historically high savings rate, unemployment is hovering near record lows, and inflation is firmly around the European Central Bank's 2% target.
The outlook is further boosted by Germany's infrastructure and defense spending boom, which may be slow to get going but will have a measurable impact on growth from the second quarter.
However, exports are unlikely to fully recover anytime soon, as US tariffs, increasingly fierce Chinese competition and the dollar's decline over the past year point to a permanent shift in trade patterns.
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