Record 12.1% collapse in second quarter eurozone GDP1 min read . Updated: 31 Jul 2020, 03:30 PM IST
- The European economy was hit by its sharpest recorded contraction in the second quarter, with GDP down 12.1% in the eurozone and 11.9% across the EU
- The official Eurostat agency said that the fall was 'by far' the largest since it began recording the figure in 1995
The European economy was hit by its sharpest recorded contraction in the second quarter, with GDP down 12.1% in the eurozone and 11.9% across the EU.
The official Eurostat agency said that, with much of the economy paralysed by coronavirus lockdowns, the fall was "by far" the largest since it began recording the figure in 1995.
"It is a shocking drop, but completely understandable as the economy was shut for a considerable period during the quarter," said Bert Colijn, senior economist at ING Bank.
"It therefore doesn't tell us all that much about the general state of the economy, which is usually why one would look at GDP figures in the first place."
The figures suggest that the decline has been similar in major economies Germany, France and Italy, but analyst Colijn warned that Spain is facing a "prolonged slump".
If countries continue to relax their coronavirus measures there could be a fairly rapid recovery, but analysts played down the chance of a immediate "V-shaped" rebound.
"The hard part of this recovery is set to start about now," Colijn said.
Meanwhile Eurozone inflation rose slightly to 0.4% in July.
The figure is up on June's 0.3% but is still well off the European Central Bank's target of just below 2%, according to Eurostat.
This story has been published from a wire agency feed without modifications to the text.