Eurozone's Q1 GDP contracts by 0.3%

The seasonally adjusted gross domestic product (GDP) went down by 0.3 percent in the Eurozone, and by 0.1 percent in the European Union (EU) in the first quarter of 2021 compared with the previous quarter, said Eurostat on Tuesday, reported Xinhua.

The 19-member Eurozone recorded negative year-on-year growth of 1.3 percent, while the economy of the 27-member EU fell by 1.2 percent compared to the first quarter of last year, according to the European statistical office.

It was the second consecutive season of economic slump after the eurozone recorded a fall of 0.6 percent and the EU 0.4 percent in the fourth quarter in 2020, following a strong rebound in the third quarter.

In the first quarter of this year, the United States's GDP increased by 1.6 percent compared to the previous quarter and grew by 0.4 percent year on year. China's Q1 GDP went up by 0.6 percent from the fourth quarter of 2020 and 18.3 percent year on year.

The slower recovery in Europe can be explained by the third wave of COVID-19 pandemic that hit the continent at the beginning of the year, with the arrival of new variants of concern, and the ensuing lockdowns.

"The eurozone has gone through its second technical recession during the pandemic," said Bert Colijn, senior economist for the Eurozone at ING.

"The view on the eurozone economy is pretty poor at the moment in comparison to the U.S. with another technical recession, vaccinations lagging, later reopenings and weaker fiscal support for 2021," said the economist.

However, Colijn remained optimistic for the rest of the year, noting that when economies reopen, demand will be high, leading to a "strong rebound."

Restrictions in Europe are being slowly lifted as vaccination campaigns are well underway. An EU-wide COVID-19 certificate will be in use starting from July to restart the stalling tourism.