THE eurozone’s economy recorded its deepest contraction on record in the second quarter, preliminary estimates showed Friday, while the bloc’s inflation unexpectedly ticked up in July.

In the months from April to June, gross domestic product in the 19-country currency bloc shrank by 12.1 percent from the previous quarter, the European Union’s statistics office Eurostat said in its flash estimates.

The deepest GDP fall since the time series started in 1995 coincided with coronavirus lockdowns which many eurozone countries began to ease only from May.

The contraction was slightly more pronounced than market expectations of a 12 percent fall, and followed the 3.6 percent GDP drop recorded in the first quarter of the year.

Among the countries for which data were available, Spain posted the worst output slump, with its economy shrinking by 18.5 percent quarter on quarter, worse than expected and wiping out all the post-financial crisis recovery of the last six years.

GDP in Italy and France also fell sharply but less than forecast, respectively by 12.4 percent and 13.8 percent. Germany, the largest economy in the bloc, saw a 10.1 percent contraction in the second quarter, worse than expectations of a 9 percent slump.

Inflation continued instead its upward trend, defying expectations of a slowdown, supporting the European Central Bank’s expectation that a negative headline reading may be avoided.

Eurostat said consumer prices in the bloc rose 0.4 percent on an annual basis in July from 0.3 percent in June and 0.1 percent in May. Economists polled previously had forecast a 0.2 percent increase in July.

(SD-Agencies)