The European Union has entered recession: GDP and employment fell again in the first quarter of 2021

The gross domestic product (GDP) of the European Union (EU) contracted by 0.4% and the employment rate fell by 0.3% in the first quarter of the year compared to the previous quarter, according to data released on Tuesday by the Community Statistics Office, Eurostat.

While in the euro zone, GDP fell by 0.6% and employment by 0.3%, between January and March.

Compared to the first quarter of 2020, GDP contracted by 1.8% in the single currency area and a 1.7% at the community club, while employment fell by a 2.1% and 1.8%, respectively.

Eurostat released its first estimate on European employment development and revised GDP data on Tuesday, which confirms that the European economy has returned to recession between January and March of this year, after accumulating two quarters of falls.

After a record crash due to the coronavirus pandemic in the second quarter of 2020, 11.6% in the euro area and 11.2% in the EU, the economy recovered the ground lost in the third quarter (+ 12.5% ​​and + 11.7% respectively), but New waves of COVID-19 and the resulting drop in activity have driven GDP down in the last three months of the year (-0.7% in the euro area and -0.5% in the EU).

The decline continued between January and March 2021, a quarter in which restrictions were largely maintained against the pandemic, with decline in all major European economies except France, which grew 0.4% per quarter.

Germany GDP fell 1.7%; in Spain and the Netherlands 0.5%, and Italy 0.4%, although across the EU the main decreases were recorded in Portugal (-3.3%), Latvia (-2.6%) and Slovakia (-1.8%).

On the contrary, the main increases in GDP were observed in Romania (2.8%), Bulgaria (2.5%) and Cyprus (2%).

In annual terms, the main decline in GDP was recorded Portugal (-5.4%), Spain (-4.3%) and Germany (-3%), while the only increases were recorded in France (1.5%), Lithuania (1%) and Slovakia (0.5%).

Overall, the year-over-year decline was more moderate in the first quarter of 2021 than in the last quarter of 2020, when GDP declined by 4.9% in the euro zone and a 4.6% in the Twenty-Seven.

Regarding employment, the quarterly drop between January and March represents a change in trend, as the fourth quarter of 2020 closed a 0.4% increase in the number of people employed both in the single currency area and in the EU and the third quarter had recorded a Improvement of 1% and 0.9%, respectively.

In the year-over-year comparison, the decrease 2.1% in the euro zone and 1.8% in the EU, it was in both cases two tenths higher than that recorded in the last quarter of 2020 according to Eurostat, which does not provide employment figures by country.

(With information from EFE)

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