- In the last quarter of 2020, GDP fell 0.5% in the 27-nation European Union and 0.7% in the Eurozone compared to the three previous months.
- Brussels will present new forecasts for the European economy in the coming days.
- The large economies of the Eurozone have already announced historic falls in 2020.
The gross domestic product (GDP) fell 6.4% across the European Union (EU) and 6.8% in the Eurozone in 2020, according to preliminary data published Tuesday by Eurostat. The contraction, as a result of the coronavirus pandemic, ended seven years of growth in both areas.
In the last quarter of 2020, GDP fell 0.5% in the 27-nation European Union and 0.7% in the Eurozone compared to the three previous months.
Compared to the fourth quarter of 2019, the decline was 4.8% and 5.1%, respectively, according to data from the community statistical office.
The coronavirus outbreak, and the restrictions imposed to contain it since March, caused a record drop in GDP in the second quarter, of 11.4% in the EU and 11.7% in the Eurozone.
Between July and September, the end of strict confinements and the partial relaxation of restrictions on the continent led to a strong rebound in GDP– of 11.5% and 12.4%, respectively— which was interrupted shortly after by the second wave of COVID-19.
Thus, the European economy fell again in the last quarter of the year, according to preliminary data from Eurostat.
The 6.4% drop in the EU and 6.8% in the Eurozone in 2020 as a whole is higher than that suffered in 2009, the worst year of the financial crisis, in which the economy contracted by 4.3% and 4.4%, respectively.
However, the fall was, in both cases, one point lower than that forecast last November by the European Commission, which predicted a contraction in GDP of 7.4% in the EU and 7.8% in the Eurozone. Brussels will present new forecasts for the European economy in the coming days.
Historic Declines in Large Economies
Although Eurostat has not yet published data on the annual evolution of GDP by country, the large economies of the Eurozone have already announced historic falls in 2020.
However, the last quarter has been better than expected in some cases.
In Spain, GDP contracted by 11% last year, the largest annual decline in the statistical series, which ends six years of economic growth, according to data from the National Institute of Statistics.
However, the decline was two tenths less than the government predicted, and between October and December, GDP managed to continue growing despite the second wave of the pandemic, by 0.4%, compared to forecasts that predicted a relapse.
The French economy, for its part, recorded a decline of 8.3% in 2020, unprecedented since the Second World War, but less than initially expected by the French National Institute of Statistics (Insee) and the French government. In the fourth quarter, the contraction was 1.3%, far from the predictions that placed it at around 4%.
Italy recorded a 2% drop in GDP between October and December, and 8.8% in all of 2020, slightly less than the 9% drop expected by the government, according to the National Institute of Statistics (Istat) reported on Tuesday.
In Germany, the largest economy of the Eurozone, GDP fell by 5% for the year as a whole, after advancing only 0.1% in a fourth quarter marked by the worsening of the pandemic in the country, according to the Federal Statistical Office Germanic (Destatis).
Eurostat’s preliminary GDP data is based on incomplete information and is subject to revision, the statistical agency recalled.