Eurozone recovery slows down a bit

The euro area economy contracted slightly less in the first quarter. This was shown on Friday by figures from Eurostat, the Statistical Office of the European Union. Gross domestic product fell by 0.6 percent on a quarterly basis in the first quarter, compared to a minus of 0.7 in the previous quarter. The market expected a decline of 0.8 percent. On an annual basis, the eurozone economy shrank by 1.8 percent last quarter, while the market expected a 1.9 percent contraction. In the fourth quarter, the contraction was 4.9 percent.

Consumer prices in the euro area increased faster in April. Consumer prices rose 1.6 per cent annually in April. In March it was 1.3% and in February it was 0.9%. In april 2020, inflation was only 0.3%.

On a monthly basis, prices rose by 0.6 percent in April this year. Core inflation, a key indicator for the ECB, was 0.8 per cent annually in April. Core prices rose by 0.9 percent year-on-year in March. On a monthly basis, core prices increased by 0.6 percent in March.

Unemployment in the euro area roughly took place in March. The unemployment rate was 8.1 per cent in March compared to a revised 8.2 per cent in February. However, for the month of March, economists had predicted an increase to 8.3 percent. In March 2020, the unemployment rate in the euro area was still 7.1%.

The German economy contracted in the first quarter. This was shown on Friday by figures from the German statistical office Destatis. German gross domestic product decreased quarterly by 1.7 percent and by 3.0 percent year-on-year. The decline came after a small recovery in the second half of 2020, according to Destatis.

GDP grew by 8.7 per cent in the third quarter and by 0.5 per cent in the fourth quarter, following the deep fall in the second quarter. “The coronavirus crisis caused another fall in economic performance at the beginning of 2021,” the statistical office noted. “This affected domestic consumption in particular, while exports of goods supported the economy.”

On 25 May, Destatis will present new estimates for the first quarter.