European economy shrinks in Q4 2020, Austria, Italy record biggest plunge

The Euro area, a group of countries that use the Euro as currency, saw a drop in its GDP by 0.7% in the fourth quarter of 2020, according to a preliminary estimate published by Eurostat on Tuesday. The European Commission agency said that the decline in the Euro area's GDP is related to the latest set of lockdown measures reimposed in the region to prevent the spread of the COVID-19 virus and new emerging variants. Meanwhile, the European Union's GDP plunged by 0.5% in the fourth quarter of 2020. 

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The Euro area, which consists of 19 countries from the bloc, witnessed its biggest dive since 1995 after its GDP fell by 11.7 in the second quarter of 2020. However, the economy rebounded with a growth of 12.4% in the third quarter. But when the region started to reimpose COVID-19 restrictions in the wake of the second-wave, it was predicted that the GDP would slide down again by a huge margin. Though the Euro area managed to avert the worst, its GDP did go down by 0.7% in the fourth quarter. 

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Austria, Italy recorded biggest plunge

Austria and Italy contributed the most as their economy dropped by a whopping 4.3% and 2.0% respectively, while France saw degrowth of -1.3%. Europe's biggest economy Germany's GDP grew by 0.1% in the fourth quarter, according to Eurostat's estimate. The COVID-19-induced lockdowns have ravaged most parts of the world since the pandemic began earlier last year, but Europe, a region largely dependent on tourism, suffered the most inflicting wounds among all other major economies. 

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Most recently, the lockdowns were reimposed after new variants of the COVID-19 virus were detected in the region, which forced countries to shut down non-essential services to prevent the rapid spread of the disease. Several EU nations have also restricted international travel, even for citizens who reside within the bloc. Europe has begun the inoculation campaign for its 450 million people, however, it has been mired in controversy over distribution and production delays. 

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(Image Credit: AP)