Eurozone Suffers Record Quarter Decline over Coronavirus Crisis
Spain has seen the worst slump, and is officially in a recession.
The crisis caused by the coronavirus pandemic has inflicted the largest quarterly decline upon the economy of the Eurozone in the history of European currency bloc.
The Eurozone’s GDP dropped by 12.1% in April – June 2020, while the European Union as a whole saw a slightly lower decline of 11.9% in the second quarter, the EU statistical office Eurostat announced on Friday.
A total of 19 of the 27 EU member states are part of the Eurozone, which uses the euro, the single European currency.
The Eurozone and EU declines are the worst since 1995 when the time series were started by Eurostat.
In the first quarter, both the Eurozone and the EU still registered growth, with 3.6% and 3.2%, respectively.
Spain was the hardest hit country from the coronavirus pandemic suffering a quarter GDP decline of 18.5%.
It was followed by Portugal, whose GDP slumped by 14.1%. France shed 13.8% of its GDP, and Italy saw a decrease of 12.4%, followed by Austria (10.7%) and Germany (10.1%).
The lowest decline in the second quarter was registered in Lithuania (5.1%), Latvia (7.5%), and Czechia (8.4%).
Eurostat warned that its sources were still “incomplete and subject to further revisions.”
EU Economy Commissioner Paolo Gentiloni said “all European countries” suffered unprecedented consequences, as cited by DW.
“It is a shocking drop, but completely understandable as the economy was shut down for a considerable period during the quarter,” commented Bert Colijin, senior economist at the Frankfurt-based ING bank, told the AFP news agency.
“The hard part of this recovery is set to start about now,” he said, adding that the decline “doesn’t tell us that much about the general state of the economy” because of the nature of the economic crisis caused by a pandemic.
The latest figures mean that Spain, the fourth largest economy in the EU and the Eurozone, is officially in a recession, after it saw a 5.2% contraction in the first quarter of 2020.
Germany, the largest EU and euro area economy, which produces nearly a quarter of the Union’s GDP, saw its greatest slump since 1970. The 5.7% decline it saw in the aftermath of the 2008 global financial crisis back in 2009 pales in comparison to the latest drop of 10.1%.
The EU and Eurozone figures for the second quarter of 2020 are worse than the 9.5% decline registered in the United States. However, the former were hit hard by the coronavirus several weeks earlier than the latter.
(Banner image: Eurostat)