September 23, 2020

The pandemic places Spain at the forefront of unemployment and economic disaster in the EU



In the second quarter of 2020, still marked by COVID-19 containment measures in most Member States, seasonally adjusted GDP fell by 11.8% in the euro zone and by 11.4% in the EU to 27 compared to the previous quarter, according to an estimate published this Tuesday by Eurostat, the statistical office of the European Union.

These have been by far the steepest declines seen since the time series began in 1995. In the first quarter of 2020, GDP had declined by 3.7% in the euro area and 3.3% in the euro area. EU.

Compared to the same quarter of the previous year, seasonally adjusted GDP decreased by 14.7% in the euro area and 13.9% in the EU to 27 in the second quarter of 2020, after -3.2% and -2.7% respectively in the previous quarter. These have also been by far the steepest declines since the time series began in 1995.

Among the Member States for which data are available for the second quarter of 2020, Spain (-18.5%) recorded the steepest drop in GDP compared to the previous quarter, followed by Croatia (-14.9%) , Hungary (-14.5%), Greece (-14.0%), Portugal (-13.9%) and France (-13.8%). The lowest falls in GDP were observed in Finland (-4.5%), Lithuania (-5.5%) and Estonia (-5.6%), followed by Ireland (-6.1%), Latvia (- 6.5%) and Denmark (-6.9%).

During the second quarter of 2020, household final consumption spending decreased by 12.4% in the euro area and 12% in the EU to 27 (after -4.5% in the euro area and a -4.2% in the EU in the previous quarter). Exports decreased by 18.8% in both the euro area and the EU (after -3.9% and -3.2%, respectively). Imports decreased by 18% in the euro area and by 17.8% in the EU (after -3.2% and -2.8% respectively).

Household final consumption expenditure had a very negative contribution to GDP growth in both the euro area and the EU (-6.6 and -6.3 percentage points respectively). The contributions of the external balance and final public expenditure were also negative in both areas, while the contribution of changes in inventories was slightly positive in the euro area and slightly negative in the EU.

Job growth in the euro area and the EU

The number of employed people fell 2.9% in the euro area and 2.7% in the EU to 27 in the second quarter of 2020, compared to the previous quarter. These are the steepest declines seen since the time series began in 1995. In the first quarter of 2020, employment had decreased by 0.3% in the euro area and 0.2% in the EU.

Compared with the same quarter of the previous year, employment decreased by 3.1% in the euro area and by 2.9% in the EU in the second quarter of 2020, after + 0.4% in both areas in the first quarter of 2020. These are the steepest declines observed since the time series began in 1995.

In the second quarter of 2020, personal employment decreased in all Member States compared to the previous quarter, except in Malta (+ 0.6%). The largest decreases were recorded in Spain (-7.5%), Ireland (-6.1%), Hungary (-5.3%) and Estonia (-5.1%).

While the impact of the COVID-19 pandemic on human employment was still relatively moderate due to ERTEs in Europe, decreases in hours worked were much more pronounced: they fell by 12.8% in the euro area and 10.7% in the EU in the second quarter of 2020, compared to the previous quarter.

Compared with the same quarter of the previous year, the decreases were 16.6% in the euro zone and 13.8% in the EU, respectively (see attached table on employment in hours worked).

Eurostat estimates that in the second quarter of 2020, 203.1 million people were employed in the EU, of which 155.6 million were in the euro area. As a result of the COVID-19 pandemic, employment fell by 5.1 million in the euro area (-3.2%) and by 6.1 million (-2.9%) in the EU to 27 compared to the highest levels in the fourth quarter of 2019. They are the lowest levels since the first quarter of 2017.

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