According to the preliminary report from Eurostat, in the 1st quarter, the eurozone economy expanded by 0.4% after growing by 0.2% in the 4th quarter. Economists had expected GDP to grow by 0.2%. As for the European Union countries, GDP increased by 0.3%, slowing compared to the 4th quarter (+0.4%).
In annual terms, the growth of the eurozone economy stabilized at 1.2%, while consensus estimates suggested that GDP would grow by 1%. Meanwhile, the GDP of the European Union countries grew by 1.4% after a similar increase in the 4th quarter.
Eurostat said that among EU countries, Ireland (+3.2%) recorded the highest increase compared to the previous quarter, followed by Spain and Lithuania (both +0.6%). Hungary (-0.2%) was the only Member State that recorded a decrease compared to the previous quarter. The year-on-year growth rate was positive for eleven countries and negative for three countries.
Last week, the IMF lowered its eurozone growth outlook due to rising U.S. tariffs and uncertainty over their effects. Growth is now expected to reach 0.8% in 2025 and 1.2% in 2026 — both down 0.2 percentage points from earlier forecasts. "Tariffs and uncertainty are major factors behind weak 2025 growth," the IMF said. A modest recovery in 2026 is expected, supported by stronger consumer spending and Germany’s planned fiscal easing following adjustments to its “debt brake” rules. The IMF also expects the European Central Bank to cut interest rates to 2% by mid-2025, with more rate reductions than previously anticipated.