Eurozone Q1 GDP revised to show first contraction in three years

(Sharecast News) - The eurozone economy unexpectedly contracted in the first quarter of 2026, according to figures released on Friday by Eurostat, which revised its initial estimates to reflect the first drop in economic activity in over three years. Eurozone GDP declined by 0.2% over the first three months of the year, according to final estimates, compared with the flash and secondary estimates in April and May showing 0.1% growth.

The contraction followed a 0.2% expansion in the fourth quarter of 2025 and 0.3% growth in the third quarter, and was the first quarterly decline in activity since the fourth quarter of 2022.

It was also the sharpest quarter-on-quarter fall in GDP since the middle of 2022.

According to Eurostat, the sharp downwards revision was a result of a much steeper downturn in Ireland than initially reported, where GDP slumped 12.1% - the sharpest quarterly contraction on record, though mainly due to a drop in exports from a number of multinational pharmaceutical groups headquartered there.

Among other major economies, French GDP also declined, falling 0.1%, while Italy and Germany both expanded 0.3%.

In other news, employment levels were up 0.1% across the euro area in the first quarter at 176.3 million, following a 0.2% increase in the fourth quarter.