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Growth in the euro area expanded at a slower pace than expected in the first quarter of the year thanks to tensions surrounding tariffs.
The EU’s official data agency said on Thursday that the 20-country single currency area recorded an expansion of 0.3% in the January-March period compared to the previous quarter.
This marks a slight acceleration from the 0.2% growth recorded in the final quarter of 2024, but was down from the initial 0.4% figure estimated last month.
The first quarter growth figure for the European Union as a whole came in unchanged at 0.3%, Eurostat said.
Ireland recorded the fastest rise in GDP – up 3.2% in the quarter, due to an increased activity at its multinationals. Contractions were measured in Slovenia (-0.8%), Portugal (-0.5%) and Hungary (-0.2%).
This updated data confirms that the UK outpaced Germany (+0.2%), France (0.1%) and Italy (+0.3%).
Meanwhile, the eurozone employment change for Q1 was at 0.3% and 0.8% year-on-year. A strong performance in industrial output added to signs of economic momentum.
In March, eurozone industrial production jumped by 2.6% on a month-over-month basis, marking the sharpest one-month gain since November 2020. The figure beat expectations of a 1.8% rise and followed a revised 1.1% gain in February.
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Eurostat data revealed robust monthly increases in capital goods (3.2%), durable consumer goods (3.1%) and non-durable consumer goods (2.3%). Intermediate goods saw a more modest rise of 0.6%, while energy production dipped 0.5%.
It comes as president Donald Trump has now reduced his 20% tariffs on the EU to 10% for 90 days, establishing a window for Brussels and Washington to negotiate. The EU has threatened to impose countermeasures on the US if the trading powers fail to strike a deal.
Lars Klingbeil, German finance minister, reiterated on Thursday that the EU was poised to retaliate to Trump’s tariffs.
“We expect that the negotiations will lead to a good result, but I would also like to make it very clear that we are prepared to act if this does not succeed,” he said.