Although Eurostat’s estimate of GDP growth for the Euro-zone was unchanged at +0.6% in the quarterly National Accounts release, there was a downward revision for the EU to +0.5% (it had been the same as the EU figure). The release adds a note about the impact of multi-national enterprises on the Irish economy, suggesting that this may be behind the revision.
Despite the downgrading for the EU, this is still a faster quarter-on-quarter growth rate than we have seen in any quarter in 2024 and the same is true for the Euro-zone where the increase in Q1-25 is double the average quarterly growth rate last year.
In both cases the growth rates in GDP compared to a year ago (Q1-2024) were unrevised at +1.6% for the EU and +1.5% for the Euro-zone. The Eurostat news release notes the comparison with the USA where, despite a quarter-on-quarter decline of -0.1%, the annualized rate was stronger than in Europe at +2.0%.
With data now available for all of the EU Member States, 7 of them – Denmark, Estonia, Hungary, Luxembourg, Portugal, Slovenia and Sweden – saw their economy contract in the 1st quarter of 2025; however, as they all had growth in the final period of 2024 (only the French, Finnish and German economies contracted at the end of last year), none of them are in recession.
Looking back over 4 quarters – effectively an annualized growth rate – 6 countries have smaller economies than a year ago. The largest falls was in Slovenia at -0.8%, with Austria, Hungary and Luxembourg contracting by -0.4% and Latvia down by -0.3%. The German economy was unchanged.
Finally, picking up on the impact of the volatile Irish economy, the estimate of GDP growth in Q1-2025 was revised down to +7.4% (from +9.7% in the previous estimate), with the annualized rate now at +18.3% (from +21.1%). Although it is a relatively small economy, revisions of this size can be seen in the overall EU and Euro-zone figures. You can get the Eurostat figures from their website at https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Quarterly_national_accounts_-_GDP_and_employment or request it from MTA.