Gross value added fell 5.2% in Cyprus and 5.9% in EU in 2020 due to pandemic according to Eurostat

In 2020, the economic impact of the COVID-19 crisis caused the annual real rate of change in gross value added (GVA) to turn negative in 215 out of 219 NUTS 2 regions of the European Union for which data are available, according to information released by Eurostat, the statistical service of the EU.

After growth rates of more than 2.0% in 2017 and 2018, the EU’s annual rate of change of gross value added slowed down to 1.8% in 2019.

The direct and indirect effects of the COVID-19 crisis resulted in a 5.9% contraction in 2020 in the EU.

In Cyprus, GVA contracted by 5.2% in 2020. The country’s annual rate of change of gross value added was positive in 2017 (+5.9%), in 2018 (+5.7%) and in 2019 (+5.3%). Cyprus is considered a single region for statistical purposes on all NUTS levels.

The year 2020 marked the first time on the EU level that gross value added had fallen (in real terms) since a modest decline of 0.6% in 2012, and the economic downturn, as a result of the COVID-19 crisis, was greater than the losses (-4.3%) experienced at the height of the global financial and economic crisis in 2009.

There were 17 NUTS level 2 regions where gross value added fell by more than 10.0% in 2020: they included many of the EU’s most popular tourist destinations, for example: Notio Aigaio and Ionia Nisia in Greece; Illes Balears and Canarias in Spain; Jadranska Hrvatska in Croatia; Tirol in Austria; Algarve and Região Autónoma da Madeira in Portugal. At the onset of the pandemic, restrictions prevented most tourists from travelling and many hospitality businesses from opening.

The largest annual contractions in gross value added in 2020 were recorded in Notio Aigaio (-22.2%), Illes Balears (-21.7%) and Ionia Nisia (-20.5%); these were the only regions in the EU where value added fell by at least 20% in 2020.

Further high declines were recorded in Canarias (-18.1%), Algarve (-15.6%) and Åland in Finland (-15.5%).

On the other hand, the economic impact of the COVID-19 crisis was relatively muted – with value added falling by no more than 4.0% in 2020 – in every region of Denmark, Lithuania, Romania, Slovenia and Finland (except for Åland); this pattern was also observed in Estonia, Latvia, Luxembourg and Poland, where only data for the total economy are available.

There were only four regions (out of 219) across the EU where gross value added increased in 2020. The highest annual growth rate (+10.7%) was recorded in the Irish Southern region (which was also the ‘richest’ region in the EU, as measured by GDP per inhabitant). Gross value added also increased in the two other Irish regions, up to 3.6% in Northern and Western and 1.8% in the capital region of Eastern and Midland.

Mayotte in France was the only other region in the EU that recorded an increase in its gross value added in 2020 (+ 0.7%).

Some of the rapid growth in Ireland during 2020 can be linked to a buoyant pharmaceutical sector (one of the few sectors in the EU economy that continued to grow during the COVID-19 crisis).

Source: Cyprus News Agency