US, WASHINGTON (ORDO NEWS) — The eurozone economy contracted at a record pace in the first quarter, as measures to combat coronavirus sharply reduced economic activity in March.
The GDP of 19 countries of the currency block in January-March fell by 3.8% compared with the previous quarter, according to preliminary data from the Statistical Office of the European Union (Eurostat). This is the sharpest quarterly decline since data collection began in 1995.
Interviewed Reuters analysts forecast a decline of 3.5%. In October-December 2019, a growth of 0.1% in quarterly terms was recorded.
In annual terms, the eurozone GDP fell by 3.3% after an increase of 1% in the fourth quarter of 2019.
The economy of the EU countries in the I quarter decreased by 3.5% compared with the previous quarter and by 2.7% in annual terms. In October-December, growth was 0.2% and 1.3%, respectively.
The French economy, the second largest in the eurozone, contracted 5.8% in the first quarter compared with the previous three months, preliminary data from the National Statistical Institute Insee showed earlier Thursday. This is the sharpest decline in the history of observations.
The decline in GDP was recorded for the second quarter in a row, which corresponds to the definition of a technical recession. In October-December, the French economy contracted by 0.1%.
Spain’s economy, the fourth largest in the eurozone, contracted 5.2% in the first quarter compared with the previous quarter, which also turned out to be the sharpest decline since the beginning of observations in 1995. In the fourth quarter of 2019, Spain’s GDP grew by 0.4%.
Separate data from Eurostat showed that unemployment in the eurozone in March rose to 7.4% from 7.3% a month earlier.
Later on Thursday, the ECB Board of Governors will announce its decision on monetary policy. Due to the coronavirus pandemic, the meeting is being held for the first time via teleconference.
Most economists believe that the ECB will have to expand its bond purchase program . However, they note that the central bank may refrain from such a move this week.
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