The eurozone and US economy suffered a record reduction on account of Covid-19.
Eurostat’s, the European Union’s statistical arm, revealed that the contraction in the second quarter. This is when it combines with a smaller fall in the first three months of the year. After more than a decade, it had ended up expanding. Which put the eurozone at the same level as in the mid-2000s.
More on the Eurozone and US economy
Of the four major economies in the eurozone, Germany was the one with the best performance. The result released by the country on Thursday showed economic growth. This with a GDP contraction of 10.1% in the second quarter, which means that despite the victory, the economy shrank.
France and Italy
France, which is second only to Germany, in the bloc of the 19 countries of the single currency, registered a drop of 13.8% of GDP. All while the next biggest economy, Italy, contracted by 12.4%.
In Spain, where concerns about a second wave are most acute, there has been the biggest drop in output in the second quarter. It registered a decline in GDP of 18.5%.
Eurostat said that taken as a whole, the eurozone economy was 15% smaller than it had been a year earlier. The record-breaking drop in April to June. This was the period of 2020 that followed a fall of 3.6% in the first three months of the year and zero growth in the final quarter of 2019.
In the US, when purchased at the same period last year, we can see a drop in economic growth in the last quarter. Besides, 1.43 million Americans applied for unemployment insurance in the past week. This was the second busiest week in the past four months.
After recording the biggest fall in the quarterly gross domestic product (GDP) since 1945, economists expect an improvement by the end of the year. However, with the increasing number of infections, these perspectives may not be realized.
The decline comes at a time when much of the United States economy closed in March, in an attempt to stem the spread of coronavirus in the United States. The closures have led to a historic number of layoffs and have raised unemployment to levels never seen since the Great Depression of the 1930s.
The states are slowly opening up, although the virus continues to spread. To date, more than 150,000 people have died from Covid-19. With the increase in cases in some states like California, Florida, Texas, other states have decided to restrict companies to try to contain the spread of the virus. And this is reflected in the economy, again.
Unfortunately we are amid growing fears that the Eurozone and US economy recovery is about to be affected by a second wave of the crisis.