span>Tuesday/span>18th May 2021 - 10:22 (BST)
Secondary estimates by the Eurostat have indicated that the Eurozone economy contracted by 0.6% over Q1 2021. This was in-line with initial estimates and represents a yearly productivity fall of 1.8%, easing from a 4.9% slump over the previous three-month period.
Most of the region’s largest economy’s (Germany, Italy and Spain) saw a decline in activity, with the sharpest fall occurring in Portugal following a second wave of coronavirus infections leading the country into another nationwide lockdown.
France’s recent successful vaccination drive and delayed lockdown helped the country return to positive growth over the same period, with Europe’s second-largest economy outperforming expectations with GDP growth of 0.4%.
The latest readings confirmed the EU is now in a double-dip recession, although economists are optimistic about the potential for growth over the remainder of 2021 and into 2022.
The European Commission recently upgraded its GDP outlook to 4.2% over 2021 and 4.4% in 2022, primarily due to the large increase in vaccination rates enabling the easing of lockdown measures across the continent.
Employment within the Eurozone also remained challenging over the first part of 2021, with an overall fall of 2.1% year-on-year. The highest rates were observed in Sweden, Germany and the Netherlands, whilst the lowest were seen in Spain, Greece and Italy.
The euro remained flat following the news as attentions now turn to EU PMI and consumer confidence readings on Friday.
