Eurozone GDP down by 3.6% during the first quarter of 2020

According to the report from Eurostat, seasonally adjusted GDP decreased by 3.6% in the euro area and by 3.2% in the EU during the first quarter of 2020, compared with the previous quarter. These were the sharpest declines observed since time series started in 1995. In March 2020, the final month of the period covered, COVID-19 containment measures began to be widely introduced by Member States. In the fourth quarter of 2019, GDP had grown by 0.1% in both the euro area and the EU.

Compared with the same quarter of the previous year, seasonally adjusted GDP decreased by 3.1% in the euro area and by 2.6% in the EU in the first quarter of 2020, after +1.0% and +1.2% respectively in the previous quarter. These were the sharpest declines since the third quarter of 2009 (-4.5% for euro area and -4.4% for EU).

During the first quarter of 2020, household final consumption expenditure decreased by 4.7% in the euro area and by 4.3% in the EU (after +0.1% in the euro area and +0.3% in the EU in the previous quarter). Gross fixed capital formation decreased by 4.3% in the euro area and by 3.9% in the EU (after +5.0% and +4.3% respectively). Exports decreased by 4.2% in the euro area and by 3.5% in the EU (after +0.1% and -0.1% respectively). Imports decreased by 3.6% in the euro area and by 3.2% in the EU (after +1.9% and +1.5% respectively). Household final consumption expenditure had a strong negative contribution to GDP growth in both the euro area and the EU (-2.5 and -2.3 percentage points – pp, respectively) and the contribution from gross fixed capital formation was also negative in both zones (-1.0 and -0.9 pp respectively) as was the contribution of the external balance. The contribution of changes in inventories was positive for both zones (+0.3 pp for the euro area and +0.4 pp for the EU).