The eurozone financial system expanded by 0.4% within the first quarter of 2025, in line with preliminary figures launched by Eurostat on Wednesday. The result, which marks the fifth consecutive quarter of development, outpaced expectations of 0.2% and alerts a modest pickup in financial momentum throughout the 20-member forex bloc.
The quarterly growth doubled the 0.2% development recorded within the last three months of 2024, offering a measure of reassurance to policymakers navigating by a interval of sticky inflation and excessive rates of interest. On an annual foundation, seasonally adjusted GDP rose by 1.2%, unchanged from the earlier quarter.
The broader European Union financial system grew by 0.3% within the first quarter, a slight deceleration from the 0.4% acquire recorded within the last quarter of final yr. Yr-on-year, the EU’s GDP additionally elevated by 1.4%, sustaining the identical tempo because the prior quarter.
Eire, Spain and Lithuania drive development
Among the many Member States with accessible information, Eire posted probably the most strong quarterly efficiency, with GDP surging 3.2%. Spain and Lithuania adopted with 0.6% expansions every.
Germany, the bloc’s largest financial system, managed to exit its temporary downturn, registering 0.2% development within the first quarter after contracting by 0.2% on the finish of 2024, according to analyst forecasts.
France, in the meantime, posted marginal development of 0.1%, up from a 0.1% contraction within the prior quarter, although the determine got here in under expectations of 0.2%. Hungary was the one EU nation to report a quarterly contraction, shrinking by 0.2%.
Market response muted forward of key US information
Monetary markets have been broadly regular following the discharge. The euro held agency at $1.1370 by 11:20 CET, as traders awaited contemporary GDP and inflation information from america later within the day.
Sovereign bond yields within the eurozone slipped barely, with German 10-year Bund yields down 3 foundation factors to 2.46%, unwinding features made within the wake of Germany’s fiscal coverage bulletins in March.
European fairness markets painted a blended image. The Euro STOXX 50 index fell 0.3% to five,160 factors, dragged decrease by sharp declines in Spanish banking shares. Banco Santander dropped 4.8% and BBVA fell 2.5%, regardless of the latter reporting better-than-expected earnings.
Deutsche Financial institution declined 2% as considerations over commerce tariffs clouded the outlook, regardless of a strong earnings beat. The broader banking sector was beneath stress, with Caixabank, Crédit Agricole and Erste Financial institution falling 5%, 4.5% and 4%, respectively.
In distinction, Germany’s DAX index outperformed, gaining 0.8%, buoyed by sturdy performances from Deutsche Publish, Rheinmetall and Deutsche Börse, which every rose between 2% and three%.