Economic Landscape in the Eurozone and the EU: Mixed Picture with Sectoral Disparities and Labor Market Tension
Growth and Stability Amid Challenges
In Q4 2024, seasonally adjusted GDP modestly increased by 0.1% in the Eurozone and 0.2% in the EU, following a stronger 0.4% rise in the previous quarter. On an annual basis, GDP grew by 0.9% in the Eurozone and 1.1% in the EU, reflecting overall resilience despite headwinds. GDP increased in 17 EU countries, remained stable in 2, and decreased in 3. Notable growth was seen in Denmark (+1.6%), Portugal (+1.5%), and Poland (+1.3%), while Ireland (-1.3%), Germany (-0.2%), and France (-0.1%) recorded declines.
Sectoral Disparities: Construction Up, Industry Down
In December 2024, industrial production decreased by 1.1% in the Eurozone and 0.8% in the EU, reversing November’s gains. Meanwhile, the construction sector remained stable in the Eurozone and grew in the EU, boosting economic confidence.
Inflation on the Rise Again
After hitting a low of 1.7% in September 2024, annual inflation in the Eurozone rose to 2.5% in January 2025, while in the EU, it increased to 2.8%. Energy prices played a significant role in this shift, turning positive after months of decline. In January 2025, Hungary (5.7%), Romania (5.3%), and Croatia (5.0%) had the highest inflation rates, with Denmark registering the lowest (1.4%).
Labor Market and Employment Trends
The labor market saw a slight increase in unemployment, reaching 6.3% in the Eurozone and 5.9% in the EU in December 2024. The lowest unemployment rates were in Czechia (2.6%), Malta, and Poland (3.0%), while Spain (10.6%) and Greece (9.4%) had the highest. Despite this, employment expectations have improved, with businesses anticipating more hiring in construction and services.
Economic Sentiment and Outlook
The economic sentiment indicator in January 2025 showed a balance, with increases in 14 countries and decreases in 12. The largest increases were in Malta (+5.8) and Luxembourg (+5.1), while the largest decrease was in Slovakia (-3.9). Germany recorded the lowest index (88.1), and Greece the highest (108.6).
Situation in the Major EU Economies
Among the largest EU economies, Poland led GDP growth (+1.3%), while Germany and France recorded slight declines. The highest annual inflation was observed in Poland (4.3%), with the lowest in Italy (1.7%) and France (1.8%). Spain had the highest unemployment rate (10.6%), and Poland the lowest (3.0%). Economic sentiment improved in most of these economies, with Spain reaching the highest index (104.4) and Germany the lowest (88.1).
source: EUROSTAT