The euro-zone economy expanded more strongly than expected during the third quarter, demonstrating resilience despite higher energy costs and increasingly restrictive financial conditions.
Seasonally adjusted GDP increased 0.4% from the second quarter, according to a preliminary estimate from Eurostat. That followed revised growth of 0.6% during the second quarter. Compared with the same period of 2025, euro-zone output increased 1.3%.
The broader European Union expanded 0.5% quarter over quarter and 1.5% from a year earlier.
Performance varied significantly among the largest economies. Germany expanded 0.2%, while Spain and the Netherlands grew 0.6%. France contracted 0.1%. Ireland’s volatile multinational-driven economy was an important contributor to the overall euro-zone figure; excluding Ireland, growth was considerably weaker.
The stronger-than-expected performance arrives as Europe confronts another inflation challenge. Higher energy costs are feeding into prices, potentially complicating the European Central Bank’s interest-rate decisions.
That creates a difficult combination for policymakers: economic activity is holding up better than expected, potentially giving the ECB greater room to tighten monetary policy if inflation remains elevated.
Eurostat cautioned that the figures are preliminary and based on incomplete information, meaning they remain subject to revision.
Investors will now focus on inflation and incoming economic data to determine whether Europe’s growth can withstand elevated energy prices and restrictive borrowing conditions.
