Eurozone Economy Shows Modest Growth in Q3 2025 with Spain Outperforming Amidst Regional Challenges

The Eurozone economy registered a slight improvement in the third quarter of 2025, growing by 0.2%, up from 0.1% in the previous quarter, according to Eurostat data reported by El País. Despite this modest growth, the broader economic landscape remains fragile, largely due to a persistent structural crisis in Germany worsened by the US-China trade war and ongoing geopolitical tensions.

Germany's economy stagnated in Q3 2025 with a 0.0% growth rate quarter-on-quarter, as confirmed by the Federal Statistical Office, Destatis. This follows consecutive contractions over recent years and highlights the export-dependent economy's sensitivity to global uncertainties. Although German investments in equipment increased during this period, exports declined. The German government forecasts a slight GDP growth of 0.2% for the full year 2025, projecting stronger growth in 2026 and 2027.

In contrast to Germany, Spain and Portugal demonstrated more robust growth, registering increases of 0.6% and 0.8% respectively, outperforming many other member states in the Eurozone. France also experienced moderate growth at 0.5% while Italy's economy remained sluggish, mirroring Germany's challenges influenced by energy dependencies and trade disruptions.

Unemployment remains a concern across the Eurozone, standing at 6.3%, with Spain experiencing the highest rate at 10.5%. Despite these challenges, economic sentiment among analysts remains cautiously optimistic, as noted by ING, though sustained acceleration of growth is uncertain given ongoing risks related to government budgets and international trade policies.

This quarter's economic developments reflect a region grappling with the fallout from global trade tensions and energy supply vulnerabilities, yet seeing pockets of resilience, particularly in the Iberian Peninsula, with Spain's economy showing relative strength amid adversity.