Europe Posts 0.1% Economic Growth In Second Quarter

The European Union (EU) has posted better-than-expected 0.1% growth for the year’s second quarter, according to data from statistics agency Eurostat. Economists surveyed by the Reuters news agency had anticipated flat growth across Europe during the period, following a 0.6% annualized expansion in the first quarter of 2025. Tariffs remain a concern for European countries as U.S. President Donald Trump continues to threaten import duties on the trading bloc. Like most regions of the world, Europe has struggled with uncertainty amid ongoing trade negotiations and threats of high tariffs by President Trump. Some higher sectoral tariffs, including on automobiles and steel, have come into effect. In the past week, the European Union agreed to a trade framework with the U.S., which includes 15% tariffs being imposed on goods and services from the bloc. European bond yields were little changed after the data on Q2 gross domestic product (GDP) was released, with both the French and German 10-year bonds up by less than one basis point. Separate data released on July 30 showed that Europe’s largest economy, Germany, shrank by 0.1% in the second quarter from the previous three months. The Q2 figure for Germany represents a sharp downturn from a revised 0.3% expansion in the year’s first quarter. The German economy has been dragged lower as investments in machinery and equipment, as well as construction, have declined in recent months.