The euro-area economy experienced a stronger-than-expected expansion at the beginning of 2025, with first-quarter GDP growth revised to 0.6% from the initial estimate of 0.3%, according to Eurostat.  

This upward revision was largely driven by a significant 3.2% surge in Ireland's GDP, attributed to the activities of American multinational companies operating there. Germany also contributed positively, with a 0.2% growth following a previous contraction. 

However, economists caution that this growth may be temporary. The boost is partly due to companies accelerating exports in anticipation of upcoming U.S. trade tariffs announced by President Donald Trump in April. These tariffs have already begun to erode business confidence in the euro area, with concerns that trade policy uncertainty could hamper investment and potentially lead to a mild recession in the latter half of the year. 

In response to rising trade tensions and a deteriorating growth outlook, the European Central Bank (ECB) lowered its 2025 growth forecast to 0.9% and cut interest rates to 2.25% in April. Further adjustments to the growth forecast are anticipated in June.