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Euro area reports worse than forecast contraction in Q1

Euro area reports worse than forecast contraction in Q1

The euro area reported a more than forecast contraction during the first quarter this year, raising expectations of falling into recession, worse than the financial crisis.

The 19-nation economy fell 3.8 percent in the January-March quarter, compared to analysts forecasts of 3.7 percent contraction. In the last quarter of 2019, the eurozone expanded only 0.1 percent.

The quarterly decline is considered the sharpest since the time series started in 1995, where the year-on-year reading showed 3.3 percent drop.

With nearly two weeks in lockdowns in March, the euro area is predicted to report a grimmer contraction in the April-June period on stricter lockdowns.

As of 09:25 GMT, the euro traded higher versus the US dollar at 1.0885, set for its second straight daily gain. 

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