pcloudy.png
Thursday August 6th, 2020 8:41PM

France, Italy, Spain see startling virus hits to economies

By The Associated Press
Related Articles
  Contact Editor

PARIS (AP) — France, Italy and Spain reported precipitous contractions Friday for their coronavirus-battered economies, with the pandemic wiping out years of growth in a matter of weeks as the lockdowns closed shops, factories, and restaurants.

The Spanish economy shrank by 18.5% in the April-June period from the previous quarter, the French economy nearly 14% and Italy 12.4%.

The Spanish contraction was by far the sharpest slump since the country’s national statistics agency began collecting data. Spanish Prime Minister Pedro Sánchez was meeting later Friday with the leaders of Spain’s regions to discuss how to rebuild the economy and where to deploy billions of euros in European Union aid for recovery.

Spain in mid-March went into a more than three-month lockdown, bringing much economic activity to a halt, as COVID-19 cases and deaths surged. The lockdown ended June 21.

In France, the startling plunge of 13.8% in April-June from the previous three-month period also starkly illustrated the punishing economic cost of its two-month lockdown. It was the third consecutive quarter of economic contraction in France's worsening recession. The pain has been so damaging to jobs and industries that the government is talking down the possibility of another nationwide lockdown as infections tick upward again.

France's economy was already shrinking in the last quarter of 2019, before the coronavirus pandemic hit with full force. For France and other major economies, it caused a head-spinning decline.

“All the growth in GDP seen in the 2010-2019 decade has been wiped out in five months,” said Marc Ostwald, chief economist at ADM Investor Services International. In Italy's case, economists said it wiped out about 30 years of growth.

As lockdowns have eased and many businesses reopened, there are hopes the recession will be short-lived, though an uptick in contagions in many countries remains a risk.

France is faring worse than Germany, Europe’s largest economy, which on Thursday reported a 10.1% plunge in GDP during the April-June period as its exports and business investment collapsed. Germany's drop was also the biggest since quarterly growth figures began being compiled in 1970, the official statistics agency said.

In March, the health crisis prompted the French government to introduce what was one of Europe's strictest lockdowns, halting much activity in the second-largest economy of the countries that use the euro currency. In France, COVID-19 has now killed more than 30,000 people and infected more than 186,000.

In releasing its morose figures Friday, Insee said the economic low point was in April, when only workers deemed essential were able to leave their homes. Activity started to pick up again from May as authorities began to ease lockdown restrictions, Insee added.

Friday's figures showed that the construction industry was among the hardest-hit in France, as worksites stood idle, with laborers forced to stay home.

Locked-down families, many surviving on government handouts and job-preservation schemes, tightened their purse strings amid fears for jobs but also because shops were closed. Household spending plunged 11% in April-June, following a drop of 5.8% in the first quarter.

Trade was also battered, as global lockdowns grounded flights, closed borders and factories, and threw transport into disarray. French imports, already down by 5.5% in the first quarter, shrank further in the second quarter, down 17.3%.

The damage to exports was even more pronounced, down by a whopping 25.5% in the second quarter after retreating by 6.1% in the first quarter.

___

Hatton reported from Lisbon, Portugal. Fran D'Emilio in Rome contributed to this report.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Global shares mixed, markets look to central banks, earnings
Global shares are mixed, with European indexes rising in early trading, while Asian benchmarks tumbled, as investors looked ahead to central bank meetings and corporate earnings reports
5:10AM ( 7 minutes ago )
Vietnam reports 1st coronavirus death in renewed outbreak
Vietnamese state media are reporting the country’s first ever death of a person with the coronavirus as it struggles with a renewed outbreak after 99 days without any cases
5:04AM ( 13 minutes ago )
Eurozone economy suffers record drop during lockdown months
The economy of the 19-country eurozone shrank by a devastating 12.1% percent during the second quarter from the quarter before as coronavirus lockdowns froze business and consumer activity
5:00AM ( 17 minutes ago )
Associated Press (AP)
Asian shares fall as data, earnings show pandemic fallout
Shares are mostly lower in Asia as data and corporate earnings capture dismal portrayals of the coronavirus pandemic's impact on world economies
3:38AM ( 1 hour ago )
Champagne losing its fizz as global pandemic clobbers sales
Champagne is losing its fizz
3:38AM ( 1 hour ago )
France sinks deeper into recession as GDP falls 14% in Q2
The French statistics agency says the country's economy shrank by nearly 14% in the second quarter, when France was in coronavirus lockdown
3:14AM ( 2 hours ago )
AP Business
'Building bridges': How Bass became a leading VP contender
California congresswoman Karen Bass has emerged as a leading contender to be Democrats' vice presidential candidate
12:53AM ( 4 hours ago )
China's manufacturing improves in July, exports strengthen
A survey shows China’s manufacturing activity edged up in July and export orders strengthened despite weak U.S. and European demand, in fresh signs the world’s second-largest economy is gradually recovering from the coronavirus pandemic
12:17AM ( 5 hours ago )
Asian benchmarks tumble, looking to earnings, central banks
Asian shares are tumbling as earnings coming in around the world showed mostly dismal results amid the coronavirus pandemic
12:16AM ( 5 hours ago )
AP Business - Economy
Global shares mixed, markets look to central banks, earnings
Global shares are mixed, with European indexes rising in early trading, while Asian benchmarks tumbled, as investors looked ahead to central bank meetings and corporate earnings reports
5:10AM ( 7 minutes ago )
Vietnam reports 1st coronavirus death in renewed outbreak
Vietnamese state media are reporting the country’s first ever death of a person with the coronavirus as it struggles with a renewed outbreak after 99 days without any cases
5:04AM ( 14 minutes ago )
Eurozone economy suffers record drop during lockdown months
The economy of the 19-country eurozone shrank by a devastating 12.1% percent during the second quarter from the quarter before as coronavirus lockdowns froze business and consumer activity
5:00AM ( 17 minutes ago )
The Latest: Catalonia, 2 other regions on German risk list
German authorities have added Catalonia and two other northern Spanish regions to a long list of risk areas, days after the foreign ministry advised against nonessential travel to the area
4:50AM ( 27 minutes ago )
India's Bihar state fights twin threat of virus and floods
Monsoon floods have swamped large parts of India’s densely populated Bihar state and displaced more than 300,000 people, exacerbating the risk of coronavirus and stymieing its response to the pandemic
4:42AM ( 36 minutes ago )