The euro area posted modest economic growth in the last quarter of 2024, with seasonally adjusted gross domestic product rising 0.2 percent from the previous quarter. The broader EU outpaced it slightly, growing by 0.4 percent. Employment also increased, up 0.1 percent in the euro area and 0.3 percent in the EU.
Germany, however, remains a weak link. Its GDP contracted by 0.2 percent in the fourth quarter, reversing the 0.1 percent growth in the previous quarter. The primary driver was a sharp 2.2 percent drop in exports – the steepest decline since mid-2020. In response, German lawmakers approved a constitutional amendment this month to boost defense and infrastructure spending, aiming to stimulate growth and align German industrial policy with the EU’s security investment strategy. Germany’s economic trajectory remains Europe’s central challenge.
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