The eurozone economy recorded modest growth in the third quarter of 2025, offering a tentative sign of resilience after months of stagnation, according to preliminary data released on Thursday by Eurostat. However, widening disparities among member states and continued weakness in Germany’s industrial sector underscored the fragile nature of the recovery.
Gross domestic product (GDP) across the 20-member bloc expanded by 0.2 percent from the previous quarter, slightly ahead of economists’ forecasts and an improvement from the 0.1 percent growth seen in the second quarter. Year-on-year, the eurozone economy grew by 1.3 percent, down from 1.5 percent in the prior period but still marginally above expectations of 1.2 percent.
The broader European Union performed slightly better, with GDP rising 0.3 percent quarter-on-quarter and 1.5 percent year-on-year. Analysts said the figures suggest that while the region has avoided recession, growth remains fragile and uneven.
Among the eurozone’s strongest performers, Portugal led the way with quarterly growth of 0.8 percent, buoyed by solid consumer spending and a rebound in tourism. In the wider EU, Sweden posted the highest growth at 1.1 percent, followed by Czechia at 0.7 percent. Meanwhile, Lithuania’s economy shrank by 0.2 percent, and both Ireland and Finland contracted by 0.1 percent.
Germany — the eurozone’s largest economy — continued to underperform, registering no growth in the third quarter after a 0.2 percent decline in the second. The slowdown in German exports, compounded by higher US trade tariffs and weak global demand, remained a significant drag on overall eurozone momentum.
“The economy of the eurozone continues to edge forward rather than slip into contraction,” said Joe Nellis, professor of economics at Cranfield University and economic adviser to MHA. He noted that easing inflation and modest wage gains supported consumer demand during the quarter, helping offset ongoing industrial challenges.
“The eurozone is managing to grow, but very slowly,” Nellis said. “Germany and France’s continued underperformance remains a major concern — both are competing for the unenviable title of ‘the sick man of Europe’.”
The services sector remained a bright spot for much of the region, while manufacturing and exports struggled amid subdued international trade and persistent cost pressures.
Market reaction to the GDP figures was muted, with investors awaiting next week’s European Central Bank policy meeting for further signals on interest rates. Economists expect the ECB to maintain its cautious stance, balancing signs of easing inflation with the need to support the region’s fragile growth outlook.
