The EU's seasonally adjusted GDP shrank by 1.2 percent in Q1 2021 compared to the same period in 2020, which is half a percentage point less than had been forecast, Eurostat said in a report released on Tuesday carried by Croatian state agency Hina. In Q4 2020, EU's GDP shrank 4.4 percent year-on-year.

In the euro zone, GDP decreased by 1.3 percent, which is better than expected as initial estimates had forecast a decrease of 1.8 percent. In Q4 2020, GDP had decreased by 4.7 percent year-on-year in the euro zone.

In Q1 2021, the seasonally adjusted GDP decreased by 0.3 percent in the euro zone and by 0.1 percent in the EU compared with Q4 2020. These declines follow the drops in Q4 2020 (-0.6 percent in the euro zone and -0.4 percent in the EU), Eurostat reported.

The biggest decreases were recorded in household spending, of 4.9 percent in the EU and 5.4 percent in the euro zone, as a consequence of lockdowns during the coronavirus pandemic.

Croatia’s GDP shrinks

The strongest year-on-year declines in GDP were observed in Portugal (by 5.4 percent), followed by Austria and Spain, with 4.5 percent and 4.3 percent respectively.

Croatia’s GDP shrank by 0.9 percent in the same period, which state agency Hina described as “one of the mildest drops in GDP”. In Q4 2020 Croatia recorded a 6.9 percent drop in GDP.

The smallest decreases in GDP were registered in Belgium and Italy, at 0.6 percent and 0.8 percent respectively, followed by Finland, by 1.0 percent. The strongest year-on-year growth of GDP was recorded by Ireland (12.8 percent), followed by Estonia (5.0 percent) and Luxembourg (4.9 percent).

Ireland and Croatia recorded the largest increases of GDP quarter-on-quarter, of 7.8 percent and 5.8 percent respectively, followed by Estonia (4.8 percent) and Greece (4.4 percent). The largest declines were observed in Portugal (-3.3 percent) and Slovakia (-2.0 percent), followed by Germany (-1.8 percent) and Latvia (-1.7 percent).