Three years of the eurozone’s economic activity have been wiped away, and it is likely going to get worse.
Eurostat reported eurozone first-quarter GDP fell 3.8% compared with the fourth quarter. European data is reported on a quarter-on-quarter basis, so on an annualized basis, the economy fell 14.4%, worse than the U.S. gross domestic product decline of 4.8%.
“In level terms, real GDP is back to its level three years ago, illustrating the scale of the hit to economic activity,” said economists at Citi.
Separately, France reported a 5.8% decline, Spain reported a 5.2% drop and Italy reported a 4.7% decline after also contracting in the fourth quarter.
Those three countries have been hardest hit from the coronavirus crisis, in terms of confirmed cases, in Europe.
Economists are expecting still worse to come.
“The gradual, tentative lockdown exit path laid out by Prime Minister Philippe supports our base case of a shallow recovery,” said François Cabau, an economist at Barclays who forecasts French GDP to drop 11.7% in the second quarter.
The downturn came as the European Central Bank on Thursday outlined further steps to make refinancing operations easier as it kept interest rates unchanged.
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