The euro area economy expanded unexpectedly in the second quarter of 2025.

This is according to official data, although international trade tensions are clouding the global outlook, AFP reports.

The EU's official data agency reported that the 20-nation single currency area saw growth of 0.1 percent in the April-June period from the previous quarter.

Since US President Donald Trump returned to the White House in January, he has imposed a series of painful tariffs on the EU, but the bloc struck a deal on July 27 to avert an escalating trade war.

EU officials hope the agreement will bring welcome certainty for companies and prevent further economic problems. Analysts warn, however, that Europe will still take a hit on its output from the deal, which provides for a 15% duty on most export goods.

Eurostat data showed that France, Europe's second-largest economy, beat expectations and grew 0.3% in the second quarter. Spain, however, fared best, growing 0.7% between April and June.

Europe's economic powerhouse Germany unexpectedly contracted by 0.1% from the previous quarter. Italy's economy also contracted by 0.1% over the same period.

The eurozone data is better than the 0.0% forecast by Bloomberg and FactSet analysts and comes after the eurozone economy grew by 0.6% in the first quarter.

However, economists caution against over-interpreting the first-quarter figures, as they are due to an exceptional change in data for Ireland.

The 27-nation EU economy expanded 0.2% in the April-June period from the previous quarter, after registering 0.5% growth in the first three months of 2025. | BGNES