Eurozone Plunges into Recession as Inflation and Energy Prices Take a Toll

Eurozone Enters Technical Recession in the First Quarter

The Eurozone has officially entered a technical recession as the economy experienced two consecutive quarters of negative growth. According to revised data, the GDP of the 19-nation bloc contracted by 0.6% in the first quarter of 2021, following a 0.7% contraction in the fourth quarter of 2020.

The ongoing COVID-19 pandemic and resulting lockdown measures have severely impacted the Eurozone economies, with some countries experiencing a sharper decline than others. Inflation has also been a major concern, dragging down the region’s economic growth.

The latest figures show that Germany, the largest economy in the Eurozone, saw a contraction of 1.8% in the first quarter, followed by Italy with a contraction of 0.4%. France, Spain, and the Netherlands also reported negative growth.

The European Central Bank (ECB) has already taken action to support the struggling economies, introducing a €1.8 trillion stimulus package last year. However, the recent recession has prompted calls for more fiscal and monetary measures to boost economic growth and prevent further damage.

Experts predict that the Eurozone may take some time to fully recover from the pandemic-induced economic downturn, but the ECB has vowed to continue supporting the economies until they reach pre-pandemic levels.