September 21, 2020

The euro area’s GDP suffers a record fall of 12.1% in the second quarter of the year


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Eurozone GDP it fell by 12.1% and that of the European Union as a whole by 11.7% in the second quarter due to the COVID-19 pandemic, in both cases the biggest drop since records began in 1995.

The community statistical office Eurostat confirmed this Friday its preliminary calculation of the decline in GDP of the countries that share the single currency and slightly limited the fall in GDP in the continent as a whole, which in its first estimate had been 11.9% .

Compared to the first quarter of the year, GDP has fallen in all Member States for which Eurostat has data available, being the fall of Spain the most pronounced, with 18.5%.

In the first quarter of the year, when the first containment measures began to be imposed to contain the expansion of the pandemic in countries such as Italy or Spain, the contraction had been 3.6% in the euro area and 3.2% in the Twenty seven.

However, the period between April and June more than tripled the fall in GDP in the previous quarter due to the widespread extension of these measures and the almost total halt in economic activity, and despite the fact that many countries began to ease restrictions in May . It is, according to Eurostat, “the steepest drop by far” since this historical series began, a quarter of a century ago.

In year-on-year terms, the fall in the second quarter was 15% in the euro area and 14.1% in the European Union, also record figures since the European statistical office began this measurement.

Among the countries for which data is available, Spain suffered by far the largest collapse, with its GDP falling by 18.5% compared to the 5.2% that had fallen in the first quarter of the year. The second highest quarterly decline in the EU was registered in Hungary, with 14.5%, followed by Portugal, whose economy suffered a drop of 13.9%.

France’s GDP, which in the first quarter had recorded the most drastic fall in the EU with 5.9%, registered a decline of 13.8%, the fourth highest in the EU. Germany, the main economy of the European Union, registered a fall of 10.1%, a collapse unprecedented since the postwar period; in Italy it has fallen by 12.4%, in Belgium by 12.2% and in the Netherlands by 8.5%.

In its latest macroeconomic forecasts, published in early July, the European Commission (EC) worsened its initial growth estimates and estimated that GDP in the euro area will fall by 8.7% and that of the EU by 8.3% overall. of this year.

In its previous forecasts, dated May, Brussels expected that COVID-19 would cause a decline in GDP of 7.7% in the nineteen euro countries and 7.4% in the 27.

For 2021, the Community Executive continues to trust in a recovery of the economy and estimates that the gross domestic product will increase by 6.1% in the area of ​​the single currency and by 5.8% in the entire EU.

Before the pandemic, the European Commission expected this year to close with a GDP increase of 1.4% in the EU and 1.2% in the eurozone.

Outside of the community club, the United Kingdom closed the second quarter of the year with a historical decline in its GDP, of 20.1%, while the fall in the United States data was 9.5%.

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