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The economy of the euro zone increased by 0.4% in the first three months of the year, exceeding expectations, in front of the pricing announcements of Donald Trump in early April.
The figure was twice as high as the 0.2% of the previous quarter, according to a flash estimate of the European Statistical Office Eurostat. The economists interviewed by Reuters had predicted that GDP growth would remain at this level.
The higher growth was “more appearance than reality,” wrote the economists of Commerzbank in a note to customers, adding that it was partly pulled by punctual effects, including a growth thrust of 3.2% in Ireland.
The country's GDP numbers are particularly volatile due to a large number of American multinational companies that treat non -American income through Irish subsidiaries. Commerzbank calculated that, excluding Ireland's GDP, from the euro area would have increased by 0.3%.
Most analysts expect the world war of the world unleashed by the American president on the “Liberation Day” on April 2 will harm Euro zoneSubsequent economic performance.
The data of the survey in recent weeks has indicated that the confidence of companies in the euro zone has deteriorated considerably since the American president unveiled the tasks, while growth approached zero.
“Growth will slow down (in the second quarter), while the recent increase in the uncertainty of trade policy strikes investment,” wrote Melanie Debono, economist at Pantheon Macroeconomics, in a note to customers.
She added that “a short and shallow technical recession” in the euro zone in the second half was possible.
The euro was little changed after the data version of Wednesday at $ 1,137.
The European Central Bank lowered its growth prediction in 2025 to 0.9% last month – its sixth consecutive reduction – and should lower it more in its forecasts updated in June.
The Central Bank warned that growth prospects were “deteriorated due to the increase in trade tensions” when it Reduce interest rates in April to 2.25% – The seventh reduction since June.
Traders on the Swap markets attribute about 85% of chance to a new drop at the next ECB meeting in June, the same probability as before the publication of Wednesday GDP figures.
The figures published earlier Wednesday showed that the German economy increased by 0.2% in the first quarter compared to the previous period of three months, in accordance with expectations.
The largest economy in Europe had contracted 0.2% in the last quarter of 2024.
“Unfortunately, the figures are largely the reflection of the past that an indication of the future,” Sebastian Dullien, head of the Berlin based on the first quarter data, said on Wednesday.
The French economy barely increased in the first quarter, increasing by 0.1%, having contracted 0.1% in the last three months of 2024.
