Brussels (AFP)

The euro zone saw its GDP fall to unprecedented proportions in the second quarter, when the containment measures were the most drastic, a disastrous but expected result suggesting a rather slow recovery.

The plunge recorded between April and June in the 19 countries that have adopted the single currency is staggering: -12.1%, according to the first forecast on Friday from the European Statistics Office Eurostat. For the EU as a whole, the drop is 11.9%.

These are "by far the most significant setbacks" since 1995, the date from which these statistics began, the institute said in its press release.

This "preliminary" estimate is however based "on incomplete data sources" and will be subject to revisions, also specifies Eurostat.

During the first quarter of 2020, between January and March, so at the very start of the containment measures, GDP fell by 3.6% in the euro zone.

"Some records are not made to be broken: Alan Shearer's Premier League goals, Wilt Chamberlain's 100-point basketball game, Eddy Merckx's victories in cycling. No doubt the second GDP figure quarter should also be on this list, "commented Bert Colijn, Economics at ING.

While he considers the fall "shocking", he considers it "completely understandable" given that the containment measures put in place in almost all countries paralyzed Europe during the quarter.

The activity started to resume "towards the end of April, beginning of May", "but this is only a mechanical improvement thanks to the reopening of stores and factories", underlines Bert Colijn.

"The hardest part of this recovery should start now," he insists, considering "a long-hoped-for V-shaped recovery" as "wishful thinking."

- "Very gloomy outlook" -

"Although parts of the economy have come back to life in the last two months, the damage already done, combined with the current and future impact of the virus, means that the recovery will be woefully slow," said Andrew Kenningham, analyst at Capital Economics.

"Even without a resurgence of the pandemic, which could now be underway in parts of the monetary union, the outlook is very bleak," he adds.

In fact, catastrophic data has continued to accumulate for two days at the national level: -12.4% in Italy, -13.8% in France, -14.1% in Portugal, -18.5% in Spain Friday morning, -10.1% in Germany, -10.7% in Austria, -12.2% in Belgium on Thursday.

In early July, the European Commission warned that the economic effects of the pandemic would be "devastating".

"The economic impact of containment is more serious than what we had initially expected. We continue to navigate in troubled waters and are facing many risks, including a new major wave of infections" from Covid-19, explained Vice-President Valdis Dombrovskis.

The European Commissioner for the Economy, Paolo Gentiloni had mentioned a "historic blow" to the activity of the continent.

The European executive anticipates an unprecedented and worse-than-expected recession of -8.7% in the euro area in 2020, before a rebound in 2021 (+ 6.1%).

These forecasts are in line with those of the European Central Bank, which also expects a decline of 8.7% of GDP in 2020.

But they remain more optimistic than those of the International Monetary Fund: -10.2% this year.

In this gloomy context, the slight increase, announced on Friday, in inflation in July in the euro area, to 0.3% against 0.4% in June, was surprising, especially since prices fell in Germany .

"We doubt, however, that this is the start of an upward trend," says Kenningham.

© 2020 AFP