The European zone economy performed poorly when the latest preliminary report showed that the European zone economy contracted in the fourth quarter. However it looks a little better because the reading is less than expected by economists. In addition to the extension of the tightening of movement control in the first quarter of this year, the European zone economy is expected to be steeper.
The European Union (EU) Department of Statistics (Eurostat) reported preliminary estimates that Gross Domestic Product (GDP) fell by 0.7% quarter-on-quarter and 5.1% year-on-year. This reading, however, is less than economists expect to target 1.0% in the fourth quarter of 2020 and an annual contraction of 5.4%.
According to economist at Commerzbank, Christoph Weil European zone economist is expected to record a contraction but the fall is not the same as in the first half of 2020. On the other hand, a significant recovery is likely to occur starting at the end of the first quarter.
Eurostat preliminary data show that European countries with the largest economies in second and third place, namely France and Italy, recorded weak performance with declines in GDP of 1.3% and 2.0% respectively. Meanwhile, GDP of Germany and Spain increased by 0.1% and 0.4% respectively from the third quarter, respectively.
Overall, economists are of the opinion that the decline in the fourth quarter is lower than in the first half of 2020 because there has been an adjustment in the face of 'lockdown' measures.
The Euro continued to decline from European market trading by 0.15% to the 1.2041 exchange rate as of 9.15 p.m.
