Despite geopolitical tensions and widespread uncertainty, the eurozone economy unexpectedly grew by 0.3% in the fourth quarter of 2025.
This growth rate surpassed the 0.2% forecast by economists and matched the 0.3% expansion recorded in the previous quarter. The eurozone economy has now achieved nine consecutive quarters of expansion.
"The eurozone economy continued to demonstrate resilience at the end of 2025," stated Diego Iscaro, an economist at S&P Global Market Intelligence. He added that Spain, which grew by 0.8% in the fourth quarter, "remained the standout performer."
Germany and France grew by 0.3% and 0.2% this quarter, respectively, also exceeding expectations.
The European Central Bank recently raised its GDP growth forecast for the year to 1.2%, and it is widely anticipated to hold interest rates steady at 2% during its first meeting of 2026 next week.
ECB President Christine Lagarde has repeatedly praised the "resilience" of the eurozone economy. Despite the impact of US President Donald Trump's tariff policies, economic growth momentum at the beginning of 2025 was stronger than anticipated.
As Europe's largest economy, Germany achieved its first year of growth since 2022 last year. The German economy is expected to accelerate further as the government borrows heavily for infrastructure construction and defense investments.
"The German economy has emerged from recession," said Jörg Krämer, Chief Economist at Commerzbank, while also cautioning that the country's economic "crisis is not yet over."
The Spanish Prime Minister stated on social media that the data released on Friday confirms that Spain has been the fastest-growing developed economy for the second consecutive year.
"We ended 2025 with a growth rate of 2.8%, a figure that is double the expected growth rate for the eurozone, and Spain is expected to maintain robust growth in 2026," he wrote on the X platform.
Following the data release, the euro showed little movement, falling 0.5% against a broadly stronger US dollar to $1.191.
Traders' interest rate expectations also saw almost no change. According to swap market data, the probability of a further 25-basis-point rate cut this year is approximately 25%.
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