Major economies shrink sharply in June quarter

PARIS/WASHINGTON: France, Italy, Spain and the US this week reported precipitous contractions for their coronavirus-battered economies, with the pandemic wiping out years of growth in a matter of weeks as lockdowns closed shops, factories and restaurants and could mark the beginning of a period of recession.

Quarterly GDP data for European countries, released on Friday, comes exactly seven months after the world first heard about the spread of a mysterious virus in the central Chinese city of Wuhan. The pathogen has since infected more than 17.5 million people and killed 679,354 world over.

France’s economy contracted by 13.8% in the April-June quarter, mirroring similar devastation in Spain (18.5%) and Italy (12.4%). Europe as a whole saw GDP fall by 12.1% in the Eurozone and 11.9% across the bloc.

The effect of Covid-19 on the US economy was even more marked than in Europe, as it posted a second-quarter loss of 9.5% compared with the same period a year ago, the worst figure on record. If that trajectory carried through the entire year, its economy would collapse by nearly a third (32.9%), government data released on Thursday showed. “It was a grim day at the office for the global economy... as the extent of the Covid-19 damage was laid bare,” news agency AFP quoted PVM analyst Stephen Brennock as saying.

“Europe’s biggest economy shrunk by... the biggest fall since 1970 and wiped out nearly a decade of German growth.