Eurozone Q4 GDP down 0.6% on lockdown measures, falls nearly 7% in 2020

LONDON (ICIS)–Eurozone GDP contracted by 0.6% in the fourth quarter, as major economies in the 19-country currency union established lockdown measures to control a spike in the coronavirus pandemic.

Employment, however, went up 0.3% during the quarter, according to figures from European statistical office Eurostat on Tuesday.

In the wider, 27-country EU the contraction in GDP stood at 0.4%, with employment also up by 0.3%.

Eurostat also published its first estimate for GDP in 2020, with the eurozone suffering a historic decrease of 6.8%.

The economic rollercoaster caused by the pandemic in Europe continues taking a toll, with many major countries also expected to suffer nil or negative growth in Q1 due to current restrictions in place.

“These declines follow a strong rebound in the third quarter of 2020 (12.4% in the eurozone and 11.5% in the EU) and the sharpest decreases since the time series started in 1995 observed in the second quarter of 2020 (-11.7% in the eurozone and ‑11.4% in the EU),” said Eurostat.

The economy in the eurozone, however, was 5.0% smaller at the end of 2020 than a year earlier, the last full quarter before the pandemic hit.

In the EU, by the end of 2020 GDP was 4.8% lower than a year earlier.

Pandemic hit to the economy in 2020

*Based on seasonally adjusted data

Historic falls and increases across the EU
Click on image to enlarge

 

DESPITE ALL, SENTIMENT IMPROVES
German research institute Zew also published on Tuesday its economic sentiment index for February, which posted sharp increases as the vaccines roll-out gives hope of a return to some sort of normality.

However, when asked about the current economic situation, the figures were more sombre.

“[The index] increased again considerably in the current February 2021 survey, climbing 9.4 points to a new reading of 71.2 points compared to January,” said Zew.

“The assessment of the economic situation in Germany worsened slightly, and currently stands at minus 67.2 points, 0.8 points lower than in January. The assessment of the situation has thus remained practically unchanged at the same low level over the past six months.”