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Euro zone economy expands by better-than-expected 0.4% in the first quarter

  • The eurozone economy of 20 countries grew by 0.4% in the first quarter of 2025, surpassing the 0.2% forecast.
  • This growth followed two years of stagnation worsened by surging energy prices, supply chain issues, and rising US-EU tariff tensions.
  • Ireland’s strong 3.2% GDP rise, partly due to advance imports ahead of US tariffs, alongside growth in Spain and Germany, boosted the overall figures.
  • Franziska Palmas noted that economic activity began the year more robustly than anticipated, but she cautioned that growth is likely to decline as US tariffs take effect.
  • Despite the better start, tariff uncertainty and weakening business sentiment suggest subdued eurozone growth, with Germany’s incoming government preparing fiscal stimulus.
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Europe's economic activity has resisted Donald Trump's untimely tariff announcements better than expected at the beginning of the year, but the impact of trade tensions is expected to keep it near-stagnant this year.

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German growth better than expected but tariff turmoil looms

Germany's struggling economy grew faster than expected at the start of the year, data showed Wednesday, in a boost for the incoming government of conservative Friedrich Merz even as US tariffs threaten to derail the nascent recovery.

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Vindobona.org | Vienna International News broke the news in on Tuesday, April 29, 2025.
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