London Daily

Focus on the big picture.
Thursday, Oct 09, 2025

Europe's recession deepened in the first quarter but the recovery is underway

Europe's recession deepened in the first quarter but the recovery is underway

Europe fell deeper into recession in the first three months of the year, but the region's economy is already turning a corner and looks set to bounce back as coronavirus restrictions ease.
EU GDP contracted by 0.4% between January and March, compared with the previous quarter, statistics agency Eurostat said in a statement on Friday. The economy shrank 1.7% when compared with the same quarter in 2020.

The decline follows a contraction in the fourth quarter of last year, when governments reimposed lockdowns to respond to spikes in coronavirus cases and deaths. Many restrictions remained in place during the early months of 2021, weighing on the economy.

Europe is lagging the United States and United Kingdom in recovering from the pandemic because problems with the supply of vaccines have made it difficult for policymakers to plot clear paths out of lockdowns. Relatively smaller government stimulus packages and a heavy reliance on tourism have also been a drag on activity.

But the European economy is beginning to show signs of life and experts expect a strong rebound as the vaccine rollout accelerates and restrictions ease heading into summer.

According to an estimate from data provider IHS Markit, business activity in April across the 19 countries that use the euro grew at its fastest pace since last July. "A record expansion of manufacturing output was accompanied by a return to growth in the service sector for the first time since last August," it said in a statement last week.

Unemployment declined slightly in March and consumption has responded strongly to the slightest easing of restrictions, which is a positive sign of what's to come, said ING's senior eurozone economist Bert Colijn. "Consumers seem eager to spend," he wrote in a note on Friday. "Domestic demand is set for a strong rebound when economies reopen."

The manufacturing sector has also roared back to life and is mostly being held back by supply constraints, Colijn added.

Strain on global supply chains has made it much more expensive to move goods around the world and contributed to shortages of critical parts. German carmakers, for example, are grappling with a global chip shortage, which is expected to affect production and sales numbers this year.

Germany's GDP shrank 1.7% between January and March after expanding in the final three months of last year. The decline was driven by weak household spending due to Covid-19 restrictions, according to the country's statistics office Destatis.

France's GDP edged 0.4% higher in the first quarter, helped by increased business investment and a boost to household spending, the country's statistics office Insee said.

"It looks like the fate of the eurozone economy is about to turn," Colijn said. "While late out of the starting blocks, the eurozone is set for its start to the pandemic rebound."

Commerzbank said on Friday that it expects the euro area economy to return to its pre-crisis level by the end of this year.
Newsletter

Related Articles

0:00
0:00
Close
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×