Eurozone GDP decline estimate in I quarter revised up to 3.6%

US, WASHINGTON (ORDO NEWS) — The eurozone economy in the first quarter of 2020 contracted less sharply than originally expected, although the decline was still the largest in the history of observations.

The GDP of 19 countries of the currency block in January-March fell by 3.6% compared with the previous three-month period, according to the final data of the Statistical Office of the European Union (Eurostat). This is the sharpest quarterly decline since data collection began in 1995. Preliminary data indicated a decrease in GDP of 3.8%.

In the IV quarter of 2019, GDP growth was recorded at 0.1% in quarterly terms.

According to revised data in annual terms, the eurozone GDP in January-March fell by 3.1%, rather than 3.2%, as previously reported, after growing by 1% in October-December.

The economy of the EU countries in the I quarter decreased by 3.2% compared with the previous quarter and by 2.6% in annual terms. In October-December, growth was 0.1% and 1.2%, respectively.

The German economy, the largest in Europe, contracted 2.2% in January-March compared with the previous quarter, when a 0.1% decline was recorded. The decline for two consecutive quarters is consistent with the definition of a technical recession.

France’s economy, the second largest in the eurozone, has also entered a recession. The country’s GDP fell by 5.3% in the I quarter after falling by 0.1% in the IV quarter of 2019.

The Italian economy in January-March contracted 5.3% in quarterly terms after a decline of 0.2% in October-December.

In Spain, a 5.2% decrease in GDP was recorded after a 0.4% increase in the fourth quarter of last year.

Following the June meeting, the European Central Bank left key interest rates unchanged and increased the volume of the Pandemic Emergency Purchase Program (PEPP) to support the eurozone economy in the context of the COVID-19 pandemic.

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