Euro Zone's Economy Shrinks At Historic Rate In Q1; France Enters Technical Recession

The Euro zone's economy contracted by 3.8 percent in the first quarter of 2020, compared to October-December 2019 period as per official data released on Thursday, showing clear signs of damage done by the coronavirus pandemic to the region's business activity.

France enters technical recession

The French economy contracted 5.8 percent in the January-March period when compared to the last quarter of 2019, the sharpest decline seen since records began in 1949.

The European Union's second-largest economy dropped 0.1 percent in the final quarter of 2019, which constitutes to two consecutive quarters of economic contraction, technically meaning that France has entered recession.

The country will be lifting some lockdown measures from 11 May.

The 19 member nations of Europe, which share a single currency (Euro), are also among the hardest hit by COVID-19 in the continent. In fact, its four largest economies- Germany, France, Spain and Italy- are among the top six countries with the highest number of infections in the world.

These nations had to impose strict lockdown measures which meant that all non-essential services have been closed for several weeks.

Italy was the first country to call a nationwide lockdown which began on 10 March, suggesting that its second-quarter data will likely be much worse than figures released for the March ended quarter.

Germany

While France may have been the hardest hit, new data showed that German retail sales dropped at their fastest rate in March since January 2007. The German statistics office said on Thursday that monthly retail sales fell by 5.6 percent during the month.

The country has reopened some retail businesses in the second half of April, but the government on Wednesday said that the country is on track for the worst recession since World War II. It has slashed its GDP (gross domestic product) estimate for 2020 to (-) 6.3 percent from a January estimate of 1.1 percent, a Reuters report said.

Spain

Spain's economy contracted 5.2 percent in the first quarter of 2020 said INE, the country's statistics office.