18 July 2025, Bremen, Bremerhaven: Containers are dealt with on the abroad port.
Sina Schuldt/image alliance through Getty Photographs)
The euro zone financial system eked out a better-than-expected 0.1% development within the second quarter, in comparison with the earlier three-month stretch, flash knowledge from Eurostat confirmed Wednesday.
Economists polled by Reuters had anticipated euro zone development to flatline within the interval, following a 0.6% enlargement within the first quarter.
“The slowdown in euro-zone GDP development in Q2 got here as no shock because the enhance from tariff front-running waned,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics, stated in a observe.
“Total, the information recommend that the euro-zone has been resilient to the shifts in US commerce coverage thus far. Entrance-running of the tariffs gave the financial system a lift in Q1, and the impression of commerce coverage uncertainty has seemingly been restricted thus far,” he added.
U.S. tariffs and their impression have been a high concern for European economies thus far this 12 months. U.S. President Donald Trump’s so-called reciprocal tariffs initially got here into impact in April because the second quarter kicked off.
The duties had been then nevertheless briefly lowered, however the previous couple of months have been stricken by a lot uncertainty as negotiations for commerce settlement had been underway. Some greater sectoral tariffs, together with on autos and metal and aluminum, have additionally been in impact.
The European Union over the weekend agreed to a commerce framework with the U.S., which incorporates 15% tariffs being imposed on the bloc. Some items are set to be exempt, and levies on autos have been lowered to the baseline stage.
European bond yields had been little modified after the information launch, with each the French and German 10-year bonds final up by lower than one foundation level.
German financial system contracts
Earlier on Wednesday, preliminary knowledge from statistics company Destatis confirmed that output from the European Union’s largest financial system, Germany, shrank barely by 0.1% within the second quarter of 2025 from the earlier three months.
The determine, which is adjusted for value, calendar and seasonal differences, aligned with the expectations of analysts polled by Reuters and marked a pointy slowdown in comparison with a revised 0.3% enlargement within the first quarter.
Funding in equipment and gear, in addition to development, had been decrease within the second quarter than within the earlier three-month interval, whereas personal and authorities consumption expenditures elevated, Destatis knowledge signaled.
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