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Eurozone GDP Falls Most On Record

The euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic, preliminary flash estimate published by Eurostat showed Friday.

Gross domestic product fell 12.1 percent on a quarterly basis, bigger than the 3.6 percent drop in the first quarter. This was bigger than the economists' forecast of 11.2 percent and was the sharpest decline seen since the series began in 1995.

The revised estimate for the second quarter is due on August 14.

Year-on-year, GDP was down 15 percent in the second quarter versus a 3.1 percent decline a quarter ago. GDP was expected to fall 13.9 percent.

Flash estimate from Eurostat showed that inflation rose unexpectedly to 0.4 percent in July from 0.3 percent in June. Economists had forecast the rate to ease to 0.2 percent.

Headline inflation continued to remain well below the European Central Bank's target of "below, but close to 2 percent."

On a monthly basis, the harmonized index of consumer prices was down 0.3 percent.

Core inflation that excludes energy, food, alcohol and beverages, accelerated to 1.2 percent from 0.8 percent in June.

The annual growth in food, alcohol and tobacco prices slowed to 2 percent from 3.2 percent. Energy prices dropped 8.3 percent after easing 9.3 percent. Services cost advanced 0.9 percent, but slower than the 1.2 percent increase seen in June.

Meanwhile, non-energy industrial goods price inflation accelerated to 1.7 percent from 0.2 percent.

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