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Eurozone GDP dives in record pandemic plunge

July 31, 2020

The coronavirus pandemic caused the largest GDP drop ever recorded for the 19 EU countries using the euro as currency, according to estimates. The eurozone economy has shrunk by over 12%, with Spain bearing the brunt.

A back-lit euro symbol in Brusels
Image: picture-alliance/Photoshot

The eurozone's economy took an unprecedented hit due to coronavirus pandemic, with the bloc's GDP contracting by 12.1% in the second quarter of 2020, EU officials said in preliminary estimates published on Friday.

Only 19 out of EU's 27 member states use the euro as currency. The hit was slightly milder for European Union as a whole with a contraction of 11.9%.

Unprecedented consequences for all of Europe

The pandemic had the largest impact on Spain, the EU's fourth-largest economy, which saw its GDP plunge by 18.5%. 

Spanish Prime Minister Pedro Sanchez was set to meet leaders of the country's regions later on Friday to discuss rebuilding the economy and distributing EU recovery funds. The latest numbers put Spain in an official recession, as the first quarter of 2020 also saw a 5.2% contraction.

Portugal's GDP slumped 14.1%. France shed 13.8% of its GDP, and Italy saw a decrease of 12.4%.

EU Economy Commissioner Paolo Gentiloni said "all European countries" suffered unprecedented consequences.

Read more: Opinion: Germany's economy can't count on bouncing back fast

Hard part to 'start about now'

Commenting on the EU figures, senior economist at the Frankfurt-based ING bank Bert Colijin warned that the drop "doesn't tell us that much about the general state of the economy" due to the unusual cirumstances.

"It is a shocking drop, but completely understandable as the economy was shut down for a considerable period during the quarter," he told the AFP news agency. "The hard part of this recovery is set to start about now."

The EU's Eurostat office, however, warned that its sources were still "incomplete and subject to further revisions."

The pandemic's impact in April, May, and June was worse for the EU than the United States, which reported a 9.5% drop. However, Europe also faced the coronavirus escalation several weeks before North America.

Germany announced on Thursday its largest drop in GDP since it began keeping quarterly records in 1970. The EU powerhouse said its economy shrank by 10.1%, compared to 5.7% in the aftermath of the 2009 crisis. Germany alone is responsible for generating almost a quarter of the EU GDP.

dj/sms (Reutes, AFP, DPA, AP)