December 08, 2020
According to an estimate published by Eurostat, the statistical office of the European Union, for the third quarter of 2020 seasonally adjusted GDP for the euro area increased by 12.5% and by 11.5% in the EU, when compared with the previous. It was noted, “these were by far the sharpest increases observed since time series started in 1995, and a rebound compared with the second quarter of 2020, when GDP had decreased by 11.7% in the euro area and by 11.3% in the EU.” Furthermore, in the third quarter of 2020, the seasonally adjusted GDP decreased by 4.3% in the euro area and by 4.2% in the EU when compared to the same quarter in 2019. This represents a partial recovery from a decrease of 14.7% and 13.9%, respectively in the previous quarter.
Over the third quarter of 2020, GDP in the United States rose by 7.4% when compared to the prior quarter (after -9.0% in the second quarter of 2020). In comparison to the same quarter of the previous year, GDP fell by 2.9% (after -9.0% in the previous quarter).
GDP growth by member state
France (+18.7%), Spain (+16.7%) and Italy (+15.9%) logged the sharpest increases of GDP relative to the prior quarter. These countries were also among the highest decreases in the second quarter. Also, Greece (2.3%), Estonia and Finland (both +3.3%) and Lithuania (+3.8%) had the lowest increases of GDP.
GDP components and contributions to growth
During the third quarter of 2020, household final consumption expenditure rose by 14.0% in the euro area (after -12.4% in the previous quarter) and by 13.2% in the EU (after -12.0% in the previous quarter). Gross fixed capital formation climbed by 13.4% in the euro area and by 11.7% in the EU. Exports rose by 17.1% in the euro area and by 17.2% the EU. Imports increased by 12.3% in the euro area and by 12.9% in the EU.
Household final consumption expenditure had a very strong positive contribution to GDP growth in both the euro area and the EU, increasing by 7.3 percentage points – pp in the euro area and 6.9 percentage point in the EU. The contribution from gross fixed capital formation was also positive in both zones, recording a 2.8 pp for euro area and 2.5 pp for EU. Notably, Eurostat stated that, “the contributions from the external balance and government final expenditure were positive in both zones, while the contribution of changes in inventories was slightly negative in the both zones.”
Furthermore, regarding the GDP levels in the euro area and EU, Eurostat noted that, “based on seasonally adjusted figures, GDP volumes recovered significantly in the third quarter of 2020 compared to the previous quarter. They are however still 4.4% below the level at the end of last year for the euro area and EU, slightly above the levels of first quarter 2017. For the United States, GDP was 3.5% below the level of the fourth quarter of 2019, which is the lowest level since the first quarter of 2018.”
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