ECONOMIC SNAPSHOTS
European countries have, for the most part, contained the spread of coronavirus. But outbreak has left a deep scar on the region’s economy. Different govt interventions and infection rates means the impact has been uneven. Here are snapshots from the region’s largest economies in the three months that ended in June.
FRANCE:
Though France’s 13.8% decline is stark, a mild rebound in consumer spending and business activity after quarantines were lifted has helped the country avoid a far sharper decline. In fact, the nation’s central bank recently revised its economic forecasts, expecting slightly less damage in the next few years. The government’s largess has been key: It spent over
$118 billion to pay businesses not to lay off workers, it delayed deadlines for business taxes and loan payments, and deployed over 300 billion euros in stateguaranteed loans to struggling companies.
GERMANY:
The 10.1% drop in Germany’s GDP, the largest since the country began keeping quarterly records, might already be painting a darker picture of the economy than is warranted. Separate data released Thursday showed the labour market stabilised in July and surveys of business activity indicate a quick rebound.
But the continuation of this recovery is at risk.
ITALY:
The devastating economic impact of Italy’s outbreak and lockdown, the first in Europe, was a 12.4% drop in GDP. While the central bank estimates that two government relief packages mitigated the contraction, a slow return in tourism, consumer spending, and business investment is dragging the recovery down.
SPAIN:
Spain’s recession is the deepest of all the European countries that have reported second-quarter GDP so far. The economy contracted 18.5% compared to the first three months of the year, and the outlook for the rest of the year is grim. Spain officially ended its Covid-19 state of emergency on June 21, but it has since been struggling with an increase in the number of new cases and over 300 local outbreaks, particularly severe in the northeast.