Germany’s economy shrank 1.7 percent in the first three months of this year as lockdown measures to contain rising coronavirus infections left the eurozone on track to fall into a double-dip recession. The decline in Europe’s largest economy, a reversal from the growth of 0.5 percent in the previous quarter, came as figures showed that Spain’s gross domestic product shrank 0.5 percent due to declines in household consumption and manufacturing, while Italy’s output fell 0.4 percent, dragged down by lower services sector activity.
But French GDP outshone expectations by growing 0.4 percent in the first quarter, lifted by higher construction activity and a mild rebound in household consumption.
Eurozone GDP figures due to be published later on Friday are expected to log a 0.8 percent fall, leaving the bloc lagging behind the US and China, which grew 1.6 and 0.6 percent respectively in the first quarter, from the previous three months. Most economists expect a quarterly contraction in UK output when its figures are released next month.
The eurozone economy suffered a record post-war recession in the first six months of last year as the pandemic first hit, and then dipped again in the final quarter of 2020 by 0.7 per cent. A fresh contraction in the first quarter would leave it in a second technical recession, defined as two successive quarters of negative growth.