Croatia experienced the second-deepest quarter-on-quarter contraction in GDP across the European Union in the second quarter of the year as the coronavirus (COVID-19) pandemic and lockdown took its toll on the economy.
GDP contractions were recorded across the board in the 27-member union, dropping by 11.4% q/q, and 11.8% q/q in the eurozone.
In annual terms, EU countries averaged a year-on-year fall of 13.9% in 2Q20; for the eurozone the average contraction was somewhat deeper at 14.7%, according to European statistics agency Eurostat.
The single deepest q/q contraction was in Spain at -18.5%, which was a 22.1% y/y contraction, followed by Croatia with a contraction of 14.9% q/q and 15.1% y/y. Both countries have large tourism sectors, which were badly hit by the crisis, with tourists only starting to trickle back towards the end of the quarter.
Steep q/q declines were also reported for Hungary (-14.5%), Greece (-14.0%), Portugal (-13.9%) and France (-13.8%), Eurostat said.
On the other hand, the least affected economies by the pandemic were those in Northern Europe: the Baltic states and the three Nordic EU members, Denmark, Finland and Sweden.
“Based on seasonally adjusted figures, GDP volumes were significantly lower than the highest levels of the fourth quarter of 2019 (-15.1% in the euro area and -14.3% in the EU). This corresponds to the lowest levels since the the first quarter of 2005 for the euro area and the third quarter of 2009 for the EU,” said Eurostat’s report on September 8.
Broken down by component, Eurostat reported a very strong negative contribution from both household consumption and gross fixed capital formation, as well as from the external balance and government final expenditure. On the other hand, changes in inventories was slightly positive in the euro area and slightly negative in the EU.
Meanwhile, the number of employed people decreased by 2.9% in the euro area and by 2.7% in the EU in 2Q20, the sharpest declines since the time series started in 1995.