Europe Lagging

The U.S. economy grew at a 2.3% pace in the last quarter of 2024, which is not far from the longer-term average, and not a sign of recession.  The situation is very different in Europe.

The most recent economic numbers show that the Eurozone as a whole recorded zero growth in the fourth quarter of last year, and less than 1% for the year as a whole.  Germany’s GDP fell 0.2%, France and Italy were flatlined.  This comes after the European Central bank cut interest rates four times in the past year, which normally would have produced at least moderate stimulus.  

The prognosis going forward is uncertain and somewhat pessimistic, given the near-certainty that the Trump Administration will impose tariffs on European goods and services (particularly automobiles and agricultural products) being sold into the world’s largest economy.  Nobody has yet predicted a recession, but continued stagnation is not off the table.

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Sources:

‍https://www.cnbc.com/2025/01/30/euro-zone-gdp-q4-2024.html

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