European economy contracts less than forecast in fourth quarter
In the last three months of 2020, the European economy shrank by a smaller than expected 0.7% as businesses in France and Germany weathered a renewed round of anti-Covid-19 lockdowns somewhat better than expected.
On Tuesday, the official figures were released which were not able to erase a gloomier outlook for this year, as the 19 countries that use the euro are expected to lag China and the US in bouncing back from the worst of the pandemic.
According to EU statistics agency Eurostat, the euro zone shrank 6.8% for the year.
This year has been a rollercoaster for every economy around the globe. European economy was also among all these economies, as the growth figures highlighted the ups and downs. Since the statistics started in the year 1995, this year recorded the biggest plunge of 11.7% in the second quarter. This was followed by a rebound of 12.4% in the third quarter in late summer.
Though winters mean new restrictions will be announced for the travel, business and activity but the companies in some sectors such as manufacturing have been better able to adjust their service businesses such as hotels and restaurants.
Despite government’s tightened and extended lockdown in the largest national economy in Europe, the German economy grew by 0.1%.
The drop in France was smaller than it was expected as the drop was of 1.3%.
Economists had expected a 2.5% drop in the euro zone as recently as mid-January.
The growing prospect of a new lockdown wipes out hopes for a recovery early this year.