Brussels (Brussels Morning) According to the first estimates of annual growth, the EU economy dropped 6.4% in 2020, while the 19-country eurozone experienced a drop of 6.8% in the same period, Eurostat reported on Tuesday.
The drop recorded in the final quarter of last year was less severe than most experts feared, with the overall EU economy dropping only 0.5% compared to the third quarter, and the eurozone economy dropping 0.7%.
After a record plunge in the second quarter last year – the EU economy dropped 13.9% compared to the same period in 2019 – most EU countries experienced a steep growth in the third quarter, with the EU27 GDP growing 11.5% as the coronavirus pandemic abated and tourism, services and industry resumed economic activity.
Lagging behind China and US
However, this jump was not enough to return EU figures back to black by the end of the year, with the bloc’s economy visibly lagging in recovery behind its global rivals, China and the US. AP cites European Central Bank officials as estimating that the eurozone is not expected to reach 2019 economic levels before 2022. China has already returned to pre-pandemic levels, while the US is on track to do so by this summer.
“While the eurozone GDP data were better than what we were expecting only a week ago, the short-term prospects for the European economy remain clouded by a challenging health situation in several countries and an underwhelming start of the vaccination roll-out,” Oxford Economics eurozone expert Nicola Nobile said.