European economy suffers double digit shrink

Gross domestic product (GDP) in the eurozone shrank by 11.8 percent while the employment rate decreased by 2.9 percent in the second quarter of 2020 compared to the previous quarter, Eurostat reported.

The EU statistical office estimated that in the whole of the European Union (EU), GDP decreased by 11.4 percent and the employment rate dropped by 2.7 percent in the second quarter, when strict Covid-19 containment measures were still in place in many EU countries.

These were by far the sharpest declines observed since the time series started in 1995, Eurostat said. In the first quarter of 2020, GDP decreased by 3.7 percent in the eurozone and by 3.3 percent in the EU. Compared with the same period of 2019, seasonally adjusted GDP decreased by 14.7 percent in the eurozone and by 13.9 percent in the EU in the second quarter of 2020.

Among the EU member states for which data are available, Spain (-18.5%) recorded the sharpest quarter-on-quarter GDP decline, followed by Croatia (-14.9%), Hungary (-14.5%), Greece (-14%), Portugal (-13.9%) and France (-13.8%).

The narrowest GDP declines were registered in Finland (-4.5%), Lithuania (-5.5%) and Estonia (-5.6%), followed by Ireland (-6.1%), Latvia (-6.5%) and Denmark (-6.9%). Employment was also severely impacted by the pandemic, with the number of employed persons decreasing by 2.9 percent in the eurozone and by 2.7 percent in the EU in the second quarter of the year, compared with the previous quarter.

Year on year, the employment rate decreased by 3.1 percent in the eurozone and by 2.9 percent in the EU in the second quarter of 2020.