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Looks Like the Eurozone Missed Another Recession in Q4 2020

The GDP of Eurozone is heading towards recession again, but it might miss it in Q4 of 2020

Skerdian Meta•Friday, January 29, 2021•2 min read
German Q4 2020 GDP

The Eurozone economy fell into recession in Q2 of 2020, with the German economy declining by more than 10%, due to the lockdowns, which hurt everyone. In Q3 we saw a strong bounce of 8%, but with the new coronavirus restrictions in winter and lockdowns being implemented in the region once again, expectations were for a possible recession in Q4. But, although the French report was negative, it seems like the Eurozone economy is going to miss a recession narrowly, taking into account the German and Spanish GDP reports today.

Germany Q4 preliminary GDP

  • Q4 preliminary GDP QoQ +0.1% vs 0.0%  expected
  • Q3 GDP was+8.5%
  • Q4 GDP YoY (non-seasonally adjusted) -2.9% vs -3.2% expected
  • Q3 GDP YoY was -3.9%
  • Q4 GDP YoY (working day adjusted) -3.9% vs -4.0% expected
  • Prior was -4.0%

German economic output basically ground to a halt in the final quarter of last year, barely escaping from posting a contraction again, following a robust performance in Q3. This does reflect slight optimism that economic activity wasn’t as bad as feared towards the end of last year, but the threat of a double-dip recession still remains a possibility.

Spain Q4 preliminary GDP

Spanish GDP grew by 0.4% in Q4
  • Q4 preliminary GDP QoQ +0.4% vs -1.5% expected
  • Q3 GDP was +16.4%
  • Q4 GDP YoY -9.1% vs -10.8% expected
  • Q3 GDP YoY was -9.0%

Spanish economic activity beat the estimates, posting a quarterly growth in the final quarter of last year, in what appears to be a one of the few bright spots in the Eurozone economy.

That said, even the French report beat estimates, and that might allude to the economic contraction suffered by most countries in the region during Q4 2020 not being as bad as feared. Concerns about a possible double-dip recession will still be floating around, but this will ease some of those worries slightly for the time being.

French Q4 preliminary GDP

  • French Q4 preliminary GDP QoQ -1.3% vs -4.0% expected
  • Prior (Q3) GDP QoQ +18.7%; revised to +18.5%
  • Q4 GDP YoY -5.0% vs -7.6% expected
  • Prior (Q3) -3.9%
The French economy contracted once again in Q4 last year, after a solid rebound in Q3, though the decline wasn’t as bad as estimated, so that is a bit of a consolation. That said, all this does is reaffirm prospects of a double-dip recession to kick things off this year.
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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