Euro zone trumps growth forecast in tariffying times

The Euro zone economy grew more than expected at the end of last year, demonstrating resilience to the trade turmoil unleashed by Donald Trump.

Fourth-quarter gross domestic product rose 0.3% from the previous three months — maintaining the pace it set in the previous period — Eurostat said Friday. Analysts in a Bloomberg survey had foreseen an increase of 0.2%.

Germany, Italy and Spain all surpassed estimates, with the latter proving the standout performer once again through expansion of 0.8%. At 0.2%, meanwhile, France matched forecasts.


The currency bloc is holding up well after the US raised tariffs last year and should see growth of more than 1% in 2026 as a spending splurge hauls Germany out of its long malaise. It’s too soon to sound the all-clear, though, following Trump’s latest trade threats over Greenland and a rally in the euro that could put pressure on exporters. The region can, at least, breathe easier as regards inflation, which is settling around the European Central Bank’s target, keeping interest rates steady at 2%.

Spain said Friday that consumer prices rose 2.5% from a year ago in January — down from 3% the previous month. Regional data from Germany suggest its national figure may slightly exceed the 2% estimate, according to Bloomberg Economics, though it won’t stray far from that level.

An ECB poll of euro-area consumers showed inflation expectations over the next 12 months held steady at the end of 2025. That survey indicated a slightly more positive mood around the economy. Indeed, other parts of the bloc also recorded growth: GDP was up by 0.5% in the Netherlands, 0.2% in Austria, 0.8% in Portugal and 1.7% in Lithuania. An early indicator pointed to expansion of 0.6% in Finland. Ireland, however, slipped into a recession. In Germany, household and government consumption drove growth of 0.3% between October and December.