The euro zone economy contracted by 3.8% in the first quarter as the coronavirus pandemic severely impacted the region.
Thursday's preliminary reading is the lowest since records began in 1995, theThe 19-member euro area, which shares the single currency, is one of the hardest hit by Covid-19. Germany, France, Spain and Italy — the four largest euro economies — are among the top six countries worldwide with the highest number of infections. The strict lockdown measures in most of the euro area have meant that all non-essential services have been closed for several weeks.
Italy was the first European country to implement a nationwide lockdown, starting March 10. Thus, second-quarter data could be much worse as stringent lockdown measures are only just starting to be gradually lifted in some countries.in the first three months of 2020 when compared to last quarter of 2019, according to the country's statistics office. This was the sharpest decline since records began in 1949.
The region's second-largest economy dropped 0.1% in the final quarter of 2019 and two consecutive quarters of economic contraction mean that France is now in a technical recession. The country is lifting some of its lockdown measures from May 11. However, analysts have raised concerns that Paris will face much bigger economic challenges than neighboring Germany.
"Besides the harsher lockdown, a bigger services sector and a smaller fiscal response will contribute to France weathering the Covid-19 pandemic worse than Germany," Florian Hense, economist at Berenberg said in a note Thursday.
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