Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Wednesday, May 14, 2025
14.8 C
London

Eurozone Economy Grows Faster Than Expected Amid Trade Concerns

The eurozone economy expanded at a faster pace than anticipated in the third quarter of 2024, despite ongoing trade tensions and the looming threat of tariffs from a potential Donald Trump presidency. According to Eurostat, the gross domestic product (GDP) for the 20 countries using the euro grew by 0.4% compared to the previous quarter, surpassing expectations of a 0.2% increase.

Year-on-year, the bloc’s GDP growth accelerated to 0.9% from 0.6% in the previous quarter, maintaining a trajectory that points toward full-year growth of around 1%. However, this figure remains below the eurozone’s ‘potential’ growth rate, which reflects its natural capacity for expansion without external shocks or stimulus measures.

Germany, the eurozone’s largest economy, surprised analysts by achieving a 0.2% growth in the third quarter, despite widespread predictions of a recession due to challenges in its substantial industrial sector. France and Spain also demonstrated unexpected resilience, contributing to the overall positive economic performance. However, the eurozone still trails behind the United States, which is projected to report a steady annual growth rate of 3%, fueled by robust consumer spending and government budget allocations.

The disparity in growth rates raises concerns that the gap between the US and eurozone economies could widen further. In his campaign, Trump has proposed significant tariffs, including a 10% levy on imports from all countries and a staggering 60% on imports from China, suggesting that Europe would face serious economic repercussions if he were to win the presidency. Any new tariffs could provoke retaliatory measures, increasing costs and stifling global trade—an essential driver for the eurozone’s open economy, which relies heavily on the smooth movement of goods.

The situation is further complicated by rising tensions with China. The EU recently decided to increase tariffs on Chinese-built electric vehicles to as high as 45.3% following a trade investigation, prompting concerns of retaliation from Beijing.

Despite the third quarter’s growth figures, the eurozone has been grappling with stagnation, hovering just above zero for much of the past two years. The industrial sector has faced severe challenges, including soaring energy costs stemming from Russia’s invasion of Ukraine, shifts in consumer preferences in the automotive industry, and China’s own economic slowdown, which has reduced demand from traditional European customers.

Volkswagen reported a staggering 42% decline in operating profit due to weak performance in its core passenger car unit and rising costs associated with model updates. While households were expected to compensate for industrial weakness through increased spending, consumer consumption remained tepid, with families opting to save rather than spend.

Looking ahead, economic growth could face additional pressure from budgetary constraints, as many eurozone governments are expected to curtail spending after previous years of budget expansion. Meanwhile, the broader European Union, which includes non-eurozone countries, saw a modest growth of 0.3%, with annual growth climbing to 0.9% from 0.8%.

Economists predict that the final quarter of the year will mirror recent trends, with signs of stabilization in industry and a rebound in consumer sentiment from previous lows.

Hot this week

Irish Mortgage Rates Continue to Ease but Remain Among Highest in Eurozone

The average interest rate on new mortgages in Ireland...

Irish Bank Customers Loyal but Cautious Amid Rise of AI, Study Finds

Irish consumers remain loyal to their main banks, with...

NFL Confirms Historic 2025 Dublin Game Between Steelers and Vikings at Croke Park

The National Football League (NFL) confirmed on Tuesday that...

Dublin-Based Appeals Centre Expands Scope to Include Instagram Disputes

The Appeals Centre Europe, a Dublin-based independent body handling...

Mahmut Orhan in Greece – A Cross-Cultural Love Story

If you’ve been to a beach party or summer...

Topics

Irish Mortgage Rates Continue to Ease but Remain Among Highest in Eurozone

The average interest rate on new mortgages in Ireland...

Irish Bank Customers Loyal but Cautious Amid Rise of AI, Study Finds

Irish consumers remain loyal to their main banks, with...

NFL Confirms Historic 2025 Dublin Game Between Steelers and Vikings at Croke Park

The National Football League (NFL) confirmed on Tuesday that...

Dublin-Based Appeals Centre Expands Scope to Include Instagram Disputes

The Appeals Centre Europe, a Dublin-based independent body handling...

Mahmut Orhan in Greece – A Cross-Cultural Love Story

If you’ve been to a beach party or summer...

Trump Promises 59% Cut in Prescription Drug Prices, But Offers Few Details

U.S. President Donald Trump announced plans on Monday to...

India and Pakistan Military Chiefs to Hold Talks as Border Ceasefire Holds

Top military officials from India and Pakistan are expected...

Related Articles

Popular Categories