Germany's Economic Resilience: Can It Sustain Euro Zone Growth?

Euro zone's economic growth is propped by Germany's fiscal policies amidst France's challenges, but U.S. tariffs could impede progress. Despite resilience demonstrated by a rising PMI, concerns mount over sustainability given industrial slowdown and political instability in France. OECD warns of a potential growth dip due to trade tensions.

Euro zone economic growth has been unexpectedly robust, mainly supported by Germany's fiscal stimulus, even as political instability in France creates headwinds. However, experts warn of potential challenges ahead, particularly from U.S. tariffs impacting trade.

The bloc's impressive expansion, marked by a modest rise in the HCOB flash composite PMI, prompts debate over its resilience and the impact of France's political turmoil. Yet, underlying data suggests that the industrial uptick might be waning, relying increasingly on the service sector for growth.

Germany remains a key driver with strong PMI figures, but concerns about the sustainability of this growth persist, exacerbated by U.S. tariffs set to fully impact the economy. The OECD forecasts a slowdown, with trade frictions and geopolitical uncertainties likely damping growth.

(With inputs from agencies.)