Eurozone GDP shrinks at the fastest rate in history, losing 12.1% in the second quarter - Business Insider

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• Eurozone GDP fell by 12.1% in the second quarter, its biggest decline in history.
• This is significantly higher than the Eurozone's Q1's GDP contraction of 3.6%
• Spain was the worst hit country, suffering an 18.5% decline compared to the previous quarter. 
• The European Union clinched a historic deal last week on an $860 billion recovery fund aimed at the reconstruction of the 27-member bloc.
• Visit Business Insider's homepage for more stories.

Eurozone GDP fell by 12.1% in the second quarter of the year, its biggest single quarter drop in history as the coronavirus' true impact on the continent's economy emerges.

GDP fell by 12.1% in the euro area and 11.9% in the wider EU in the second quarter of the year, data by Eurostat showed Friday. 

This is significantly higher than Q1 contraction figures, where GDP fell by 3.6% in the euro area and by 3.2% in the EU.

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GDP levels were also 15% lower in the euro area compared to Q2 2019, and 14.4% lower in the EU. 

Countries that were most hard hit were Spain, whic hsuffered an 18.5% decline in Q2 compared to the previous quarter, and Portugal which contracted by 14.1%. 

Lithuania recorded the lowest decline of 5.1% compared to the previous quarter. 

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Spain was one of the countries to be first be severely hit by the coronavirus pandemic in Europe, and was one of the first economies to be placed under a lockdown. Spain had a more stringent lockdown compared to other European counterparts, meaning even lower economic activity.

Commenting on the latest figures, las Akincilar, heads of trading at the online trading platform, INFINOX, said: "The fallout from the virus now poses a major challenge not just to the healthcare systems and the economies of the EU member states - it's also a threat to the bloc's integrity."

"Against all the odds, European leaders agreed a colossal €750 billion rescue fund at a marathon summit this month. That deal gave Eurowatchers cause to hope, but with unemployment figures rocketing and growth stuck firmly in reverse, the single currency is coming under sustained pressure," he added. 

Leaders of the European Union reached a historic deal last week on an $860 billion recovery fund aimed at the reconstruction of the 27-member bloc.

The euro to dollar exchange didn't react much to the news and is trading at 1.18 euros per dollar. 

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Eurozone GDP shrinks at the fastest rate in history, losing 12.1% in the second quarter - Business Insider
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