Due to weak consumer spending, the euro area economy shrank at a faster than initially estimated rate in the fourth quarter of 2020, revised data from Eurostat showed on Tuesday.
Gross domestic product declined 0.7 percent sequentially instead of 0.6 percent estimated on February 16. The fall reversed a record 12.5 percent rebound seen in the third quarter.
On a yearly basis, GDP was down 4.9 percent, bigger than the 4.2 percent decline in the third quarter but slower than the 5.0 percent drop estimated on February 16.
In 2020, GDP was down 6.6 percent versus the prior estimate of -6.8 percent and +1.3 percent logged in 2019.
Ongoing restrictions mean that another fall in GDP is likely in the first quarter, while the slow vaccine rollout points to the best of the recovery being delayed into third quarter, Jessica Hinds, an economist at Capital Economics, said.
The expenditure-side breakdown showed that only household consumption had contributed negatively to the growth. The changes in inventories contributed +0.6 percentage points.
Household spending slid 3 percent, while government spending grew 0.4 percent in the fourth quarter.
Gross fixed capital formation advanced 1.6 percent. At the same time, exports and imports increased 3.5 percent and 4.1 percent, respectively.
Data showed that 157.9 million people were employed in the fourth quarter. Employment increased 0.3 percent on quarter but fell 1.9 percent from the previous year.
In relation to the COVID-19 pandemic, productivity based on persons remained negative compared to the same quarter of the previous year with -3.0 percent. Based on hours worked, productivity rose 1.6 percent.