Wales is the only nation of the UK that has seen its economy shrink, according to new figures from the ONS.
For the third quarter (Q1) of 2021 gross domestic product (GDP) in Wales declined 0.3% on the previous quarter.
Growth in England was 0.6%, while for Northern Ireland its economy grew 1.4% and for Scotland 0.9%.
GDP is a key economic indicator, which measures the value of goods and services produced across the UK.
Based on the nations and regions of the UK, the north-east of England saw the biggest quarter-on-quarter contractions in GDP in Q3 at 1.2%.
There was negative growth in the east of England, the west and east Midlands and the south-east. Economic growth for Yorkshire and the Humber was flat.
The English regions with the biggest growth in GDP were London at 2.3% and the north-west at 1.2%.
For England and Wales the industry with the largest percentage growth was accommodation and food service activities. London recorded the largest growth for this industry, at 32.2%.
The decline in GDP for Wales in Q3 compared to a 6.2% growth in Q2 of last year, which was the best of any UK nation, following a contraction of 1.7% in Q1.
Figures for 2020 show that Welsh GDP declined 11.2% on the pre-Covid 2019, compared to a fall of 9.7% for the UK as a whole.
Total GDP for Wales was £75.6bn and on on a per head of population basis was £23,882, compared to £31,972 for the UK as whole.
Welsh Liberal Democrat Leader Jane Dodds said: "“While the last two years have been economically turbulent for the whole of the UK and indeed the world, it is disappointing to once again see Wales lag behind the other UK nations. Weekly wages also continue to be lower in Wales than they are in Scotland.
“Wales, under Labour, has historically struggled to attract the levels of private sector investment and foreign direct investment it needs to move into a vibrant post-industrial economy. We need to see much more action from the Welsh Government in supporting small and medium-sized businesses in Wales alongside the self-employed and entrepreneurs.
“The Welsh Liberal Democrats are continuing to call for business rates to be frozen in Wales until 2026 and in the long-term, replace business rates with a fairer, more supportive system.
“We also want to see planning rules reformed to accelerate change of use applications for commercial premises and introduce a Community Right to Buy to bring empty shops in town centres, high streets, and city centres back into use.
“Finally we continue to call for a Job Creation Premium to be introduced which would offset the initial costs of recruitment and training for businesses looking to grow.
“Wales has the potential to be a high investment and high growth economy, we just need Labour to be willing to take action to work with the private sector."
