Eurozone economies show the biggest drop in 25 years of observation

US, WASHINGTON (ORDO NEWS) — Eurozone GDP in the first quarter showed the largest decline since 1995. This did not affect the decision of the European Central Bank to leave the zero base rate unchanged.

Eurozone GDP in the first quarter, according to preliminary estimates, decreased by 3.8% compared with the fourth quarter of 2019, Eurostat said . If we take into account all the EU member states, the decline was 3.5%. Compared to the first quarter of last year, the eurozone economy contracted by 3.3%.

The fall for the quarter was the largest in 25 years – since the publication of statistics in 1995. The year-on-year fall has been the most noticeable since the third quarter of 2009 – then the eurozone and other EU countries experienced the effects of the financial crisis. 19 countries belong to the eurozone, 27 enter the European Union: eight countries have retained their national currencies.

Eurostat indicated that in March 2020 – the last month of the quarter – countries began to introduce restrictive measures in connection with the spread of coronavirus. The March unemployment rate was 7.4% in the eurozone and 6.6% in the EU. Eurostat expects inflation to slow down in April to 0.4% from 0.7% in March.

The European Central Bank on Thursday left the base rate unchanged at 0%. At this mark, it has been since March 2016. The deposit rate remained at minus 0.5%, the lending rate for banks was still 0.25%.

The largest quarterly drop in observational history since 1949 showed French GDP, Insee said the national statistics institute. The country’s economy contracted by 5.8%, which is more than it was in the first quarter of 2009 and the second quarter of 1968. Insee also indicated that the reduction in the economy is primarily associated with measures to limit the spread of coronavirus and the cessation of “non-essential” activity.

In Spain, a record quarterly drop since 1970 was 5.2% compared to the fourth quarter of 2019, the National Institute of Kingdom Statistics said in a statement . Spain is one of the countries most affected by the coronavirus pandemic, the leader in the number of cases on the continent.

The largest number of victims in Europe in Italy. She was the first in the European Union to introduce restrictive measures. Italy’s GDP in the first quarter decreased by 4.7% compared to the previous quarter.

On April 29, the US Bureau of Economic Analysis reported a decline of 4.4% year on year. This is the first quarterly fall of the world’s largest economy and the largest decline since 2008, when the financial crisis erupted. On the same day, the Federal Reserve System left the key rate unchanged.

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