Petr Dubinsky

EU GDP Fell By More Than 1% In First Quarter

According to seasonally calculated data, the economies of the European Union countries in the first quarter fell by 0.1 percent compared to the previous three months due to a pandemic. This was announced today by Eurostat, in its revised report. This is a better development than the Office stated in a previous estimate, according to which the decrease was 0.4 percent. However, the economy was still in recession, falling 0.4 percent in the fourth quarter. This is also a better result than estimated, albeit by only one tenth of a percentage point.

In the euro area, gross domestic product (GDP) declined by 0.3 percent in the first quarter compared with the previous quarter, and the decline in the fourth quarter was 0.6 percent. The previous estimate reported a decline of 0.6 percent in the first quarter and 0.7 percent in the previous three-month period.

Recession is usually defined as two quarters of an economic downturn. The Czech economy is not in recession, although it fell by 0.3 percent in the first quarter, but rose by 0.6 percent in the fourth quarter of last year.

The EU-19 pandemic is still having a significant impact on the EU economy. Although it is receding, at the beginning of the year, due to a temporary deterioration of the situation, many European countries tightened anti-pandemic measures, which meant mainly closures, and therefore the need for many companies to be closed. The economy contracted sharply due to the pandemic last year in the second quarter, after which there was an equally significant economic rise in the following quarter. However, the end of last year and the beginning of this year were already marked by a renewed decline.

Year-on-year, the EU economy contracted 1.2 percent in the first quarter after falling 4.4 percent in the fourth quarter. In the euro area, the year-on-year decline slowed to 1.3 from 4.7 percent at the end of the year. The Czech economy moderated the year-on-year decline to 2.1 from 4.8 percent.