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Eurozone contraction better than forecast, but still the worst ever

Eurozone contraction better than forecast, but still the worst ever

The euro zone announced its final reading of the second-quarter GDP on Tuesday, which showed a better-than-expected contraction of the economy, but it remains the worst contraction the euro area has ever experienced.

The final reading of the GDP witnessed a contraction of 11.8% at the quarterly level during the second quarter of this year, compared with expectations that indicated a contraction of 12.1%.

As for the annual reading, it showed a contraction of growth of 14.7% and expectations were for a contraction of 15.0%, while the previous reading indicated a contraction of 3.2%.


The declines were widespread, as household consumption decreased by 12.4 percent due to lockdown restrictions related to the Corona pandemic, the investment rate slipped 17 percent and government spending dipped 2.6 percent.

On the other hand, exports fell 18.8% and imports plunged 18%. Among the largest economies in the Eurozone that recorded a sharp contraction was Spain, which recorded the largest drop in economic activity by -18.5%, followed by France with -13.8%, Italy by -12.8% and Germany by -9.7%.

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