The economy of the 20-nation euro-zone expanded by 0.2% in the third quarter of 2025, surpassing expectations of a 0.1% rise. (Reuters) On an annualised basis, growth came in at 1.3%, slightly ahead of the 1.2% predicted by economists. (Reuters)
France and Spain drive momentum
France stood out with a robust quarterly gain of 0.5%, outpacing forecasts of around 0.2%. (Reuters) Meanwhile, Spain delivered a 0.6% growth rate, helping to lift the region’s overall performance. (Reuters)
In contrast, leading economies such as Germany and Italy showed little to no growth, underscoring persistent structural challenges across the bloc. (Reuters)
Key implications
The stronger-than-expected figures ease pressure on the European Central Bank to implement imminent interest-rate cuts, as they reinforce the view that the euro-zone economy remains resilient amid global uncertainty. (Reuters)
Consumer strength and domestic demand appear to be offsetting weaker exports, especially given stalling industrial performance in Germany. (Euractiv)
Nevertheless, economists caution that growth remains modest and that the euro-zone may still face headwinds, with forecasts suggesting expansion in the 1.2%-1.5% range in coming years. (Reuters)
Outlook
Growth momentum might pick up if past interest-rate cuts feed through, households continue to draw down savings built up during the Covid-era, and Germany’s planned fiscal stimulus gains traction. However, trade tensions, high energy costs and structural rigidities remain risks. (Reuters)
