The fall in GDP in the first quarter is slowing down, after the 6.6% collapse in the last three months of 2020. Gross domestic product (GDP), adjusted for calendar effects and seasonally adjusted, decreased by 0.4 % compared to the previous quarter and 1.4% in trend terms, Istat predicts in its preliminary estimates. Meanwhile, inflation dates back to April, according to initial estimates, registering an increase of 0.4% on a monthly basis and of 1.1% on an annual basis from + 0.8% in March.
Agriculture and industry are good, services are bad
The new contraction in GDP, “of a more limited extent” compared to that recorded in the fourth quarter of 2020, is affected, in particular for the tertiary sector and by the economic effects of the measures adopted to combat the health emergency, explains Istat. The acquired change in GDP for 2021 is equal to + 1.9%. The cyclical variation reflects the increase in added value both in the agriculture, forestry and fishing sectors, and in that of industry, while services as a whole recorded a decrease. On the demand side, there is the positive contribution of the national component (gross of stocks) and thenegative contribution of the net foreign component.
The German braking
Things are worse in Germany, where GDP fell by 1.7% in the first quarter and by 3% on a trend basis, according to the seasonally adjusted index estimates published by Dastatis. The negative trend is affected by the further restrictions taken to contain the Coronavirus. However, the German statistical institute has revised upwards to + 0.5% the data for the fourth quarter of 2020 from the + 0.3% previously estimated. The German crash is bad news for the entire eurozone, and in particular for Italy, its main trading partner with an exchange of 116 billion euros, albeit decreasing due to the crisis brought about by the pandemic.
Eurozone slowing down, French sprint
Minus sign also in Europe: GDP in the first quarter of 2021 decreased by 0.6% in the euro area and 0.4% in the EU27 compared to the previous quarter, Eurostat reports in its flash estimate. On an annual basis, the GDP of the euro area recorded a decline of 1.8%, while in the EU27 it recorded a decline of 1.7%. Among the Member States, Portugal (-3.3%) was the one that recorded the largest decline compared to the previous quarter, followed by Latvia (-2.6%) and Germany (-1.7%), while Lithuania ( + 1.8%) and Sweden (+ 1.1%) recorded the greatest increases, but France (+ 0.4%) also recorded the plus sign, which also has the best growth rate on an annual basis (+ 1.5%), followed by Lithuania (+ 1% on a trend basis). On the other hand, growth on an annual basis for all countries was negative.
Prices, energy runs, the shopping cart goes down
As for inflation, the acceleration on an annual basis is essentially due to the prices of energy goods, which grew from + 0.4% in March to + 9.4%. The prices of the so-called “shopping cart”, on the other hand, widen their decline reaching levels not recorded since February 2018, when they decreased by 0.6% on an annual basis. Here are the April data: the prices of “food, household and personal care” fall from -0.1% to -0.4%, while those of high-frequency purchasing products accelerate (from + 0.7% to + 1.1%). Transport services also fell (from + 2.2% to -0.7%).
Annual inflation in the area also increased, reaching 1.6% in April compared to 1.3% in March, according to Eurostat estimates. Looking at the main components, energy records the highest annual rate in April (10.3%, compared to 4.3% in March), followed by services (0.9%, compared to 1.3% in March). ), alcohol and tobacco (0.7%, compared to 1.1% in March) and non-energy industrial goods (0.5%, compared to 0.3% in March).
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