Eurozone enters double-dip recession in Q1

The eurozone economy shrunk by 0.6 percent in the first three months of this year, following a 0.7-percent contraction in the fourth quarter of 2020, Eurostat, the statistical office of the European Union (EU), said on Friday.

According to Eurostat’s preliminary flash estimate, the EU’s gross domestic product (GDP) decreased by 0.4 percent, following a 0.5-percent fall in the previous quarter.

The negative growth for two consecutive quarters means that the 19 EU member states that use the single currency are technically in a recession, despite the strong, 12.5 percent rebound recorded in the third quarter of 2020.

Portugal registered the largest — 3.3 percent — quarter-on-quarter decrease, followed by Latvia (2.6 percent) and Germany (1.7 percent).

In its spring forecast published in February, the EU projected that growth in eurozone would not exceed 3.8 percent this year, as Europe is still in the grip of the COVID-19 pandemic.

The eurozone’s annual inflation rate is expected to be 1.6 percent in April, up from 1.3 percent in March, according to Eurostat’s flash estimate.

Also this month, the United States reported that its economy grew 1.6 percent in the first three months of 2021. China reported 0.6 percent quarter-on-quarter and 18.3 percent year-on-year economic growth.