The euro zone economy contracted by less than expected in the fourth quarter of 2020 amid pandemic-induced lockdowns, as large economies Germany and Spain still managed slight expansion, initial EU estimates showed on Tuesday.

The European Union's statistics office Eurostat said that according to its preliminary flash estimate, gross domestic product in the 19 countries sharing the euro fell by 0.7 percent quarter on quarter, for a 5.1-percent year-on-year decline.

Economists polled by Reuters had expected a 1-percent quarterly fall and a 5.4-percent annual contraction after a sharp rebound in the July-September period when the euro zone eased restrictions on travel and leisure after the first wave of COVID-19 cases.

Eurostat preliminary data showed the second and third largest euro zone economies France and Italy, pulled down the overall result with quarterly GDP declines of 1.3 percent and 2 percent, respectively. Meanwhile, Germany inched up by 0.1 percent from the third quarter and Spain grew by 0.4 percent.

Eurostat said that, according to its first estimation of annual growth for 2020, based on seasonally and calendar adjusted quarterly data, GDP fell by 6.8 percent in the euro area and 6.4 percent in the 27-nation European Union.