(RTTNews) – The euro area economy slipped back into recession in the first quarter as restrictions imposed to contain the coronavirus pandemic dampened economic activity, the preliminary flash estimate published by Eurostat, showed on Friday.
Gross domestic product contracted 0.6 percent from the fourth quarter, when GDP was down 0.7 percent. GDP was forecast to drop at a faster pace of 0.8 percent.
After a record expansion in the third quarter of 2020, GDP had fallen for the second straight time, pushing the economy back into a technical recession.
On a yearly basis, GDP fell 1.8 percent in the first quarter, but slower than the 4.9 percent decrease seen in the fourth quarter.
The EU27 GDP shrank 0.4 percent sequentially in the first three months of 2021 and by 1.7 percent from the last year.
Eurostat reported that the annual growth rates were negative for all EU countries except for France and Lithuania.
Germany’s GDP contracted in the first quarter after recovering slightly in the second half of 2020. GDP fell 1.7 percent sequentially, in contrast to the 0.5 percent growth seen in the fourth quarter of 2020.
Meanwhile, underpinned by consumption and investment, the French economy recovered at a faster-than-expected pace in the first quarter. GDP was up 0.4 percent, reversing a revised 1.4 percent fall in the fourth quarter and bigger than economists’ forecast of +0.1 percent.
Spain’s economic output decreased 0.5 percent in the first quarter after stagnating in the previous three months. Likewise, Italy’s GDP fell 0.4 percent following a 1.8 percent decline in the fourth quarter.
Another report from Eurostat showed that the jobless rate in the currency bloc fell unexpectedly to 8.1 percent in March from 8.2 percent in February. The expected rate was 8.3 percent.
The number of people out of work decreased by 209,000 from the previous month to 13.166 million in March. Compared with last year, unemployment rose by 1.614 million.
The unemployment rate among youth aged below 25 came in at 17.2 percent, down from 17.3 percent a month ago.