Bright spot in Europe's "economic picture"

(laichau.gov.vn) The Eurozone in the second quarter of 2025 grew beyond expectations.

People shop at a supermarket in Frankfurt , Germany. (Photo: THX/TTXVN)

The European Statistical Office (Eurostat) has just released official data for the second quarter, from April to the end of June 2025, the Eurozone economy with 20 member countries increased by 0.1% compared to the previous quarter, higher than the 0% forecast by analysts. The economy of the entire European Union (EU) including 27 countries in the second quarter of 2025 also increased by 0.2% compared to the previous quarter.

Notably, Europe’s second-largest economy, France, grew by a better-than-expected 0.3% in the second quarter, while Spain emerged as a “bright star” with an impressive 0.7% growth. However, Europe’s “leading economy,” Germany, unexpectedly fell by 0.1% compared to the previous quarter, as Germany struggled with its huge public debt. Italy’s economy also recorded a similar decline.

Bright spots emerged in the European economic picture thanks to faster-than-expected growth in both the Eurozone and the EU. France's GDP growth figures for the second quarter of 2025 showed that Europe's second-largest economy is doing relatively well, despite the pressure from the EU-US trade tariff deal. The French economy grew more than expected, with a recovery in household spending providing a boost to the economy. Ireland's economy also grew strongly in the first three months of this year, with GDP rising by 9.7%, driven by a surge in pharmaceutical exports to the US. Other countries contributing to the region's positive growth signals were Malta (up 2.1%) and Cyprus (up 1.3%).

Eurozone inflation edged up to 2% in June, in line with analysts' forecasts and in line with the European Central Bank's (ECB) target. Despite volatile factors such as energy, food, alcohol and tobacco prices, core inflation remained stable at 2.3% in May, an important indicator used by the ECB to assess real price pressures in the economy. The ECB forecast that Eurozone inflation would remain on target this year, but warned that new challenges from trade tensions or the development of artificial intelligence could make inflation more unpredictable.

Faced with headwinds, including trade tensions with major partners and the impact of global crises, the European economy has stagnated over the past two years, especially due to rising energy costs following the conflict in Ukraine. Despite a strong recovery, the region’s economy still faces many risks, prompting the International Monetary Fund (IMF) to lower its annual growth forecast for the Eurozone to 0.8% by 2025. EU officials hope that the tariff deal reached with the US in late July will bring more stability to businesses and prevent further economic damage.

Analysts warn that the European economy will still be affected because according to the agreement, the 15% tax rate will still be applied to most of the bloc's exports. This tax rate is estimated to reduce the region's GDP by about 0.2%, causing growth to continue to weaken between now and the end of the year.

Updated 8/17/2025

Source: https://laichau.gov.vn/tin-tuc-su-kien/chuyen-de/tin-trong-nuoc/diem-sang-trong-buc-tranh-kinh-te-chau-au.html