Eurozone Resilience Confirmed: Q4 GDP Steady at 0.3% as Inflation Eases

Market snapshot: The Eurozone economy concluded 2025 on a remarkably stable footing, with the Q4 GDP expanding by 0.3% quarter-on-quarter, precisely matching market estimates and previous quarterly performance. This print marks the ninth consecutive quarter of growth for the monetary union, underscoring a narrative of resilience despite heightened geopolitical volatility and trade uncertainties. The data, released by Eurostat on February 13, 2026, confirms that the region's recovery remains slow but exceptionally consistent, providing a predictable backdrop for global asset allocators.

Summary: Eurozone Q4 GDP growth remained stable at 0.3% (QoQ), matching estimates. While annual growth for 2025 stands at 1.5%, a dip in January inflation to 1.7% and the ECB's decision to hold rates at 2.00% suggest a period of macroeconomic calm before potential late-2026 policy shifts.

Key Takeaways

• Consistent Momentum: The 0.3% expansion in Q4 matches the growth rate of Q3, indicating no deceleration in domestic demand.
• Inflation Headwinds Fading: January inflation fell to 1.7%, well below the ECB's 2% target, largely driven by declining energy prices and cooling wage growth.
• Sectoral Drivers: Services, specifically Information and Communications, remained the primary growth engine, while industrial manufacturing showed tentative signs of bottoming out.
• Regional Divergence: Spain (+0.8%) and Lithuania (+1.7%) continue to lead growth charts, whereas Ireland (-0.6%) remains a volatile outlier due to multinational accounting shifts.

SAHI Perspective

For Indian market participants, the Eurozone's steady growth is a net positive for the IT services and Engineering export corridors. The stability prevents a 'hard landing' scenario that typically triggers massive capital outflows from emerging markets. However, the appreciating Euro against the USD could provide a competitive challenge for European exporters, potentially opening market share opportunities for Indian manufacturing in neutral territories. We expect the ECB to maintain its 2.00% deposit rate until late 2026, barring any unforeseen energy shocks.

Closing Insight

As the Eurozone settles into a predictable 0.3% quarterly growth rhythm, the focus shifts from 'survival' to 'efficiency'. Macro stability here acts as a stabilizer for global equity markets.

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