over 3 years ago • 2 mins
This data was actually first reported in May, but it’s now been revised for accuracy. Not necessarily for the better, mind you: the eurozone economy was still 3.1% smaller in the first quarter than the same time last year. And compared to the last quarter of 2019, it shrank by 3.6% – its biggest quarterly decline ever.
No prizes for guessing the culprit: the coronavirus pandemic shut down an economy that was already barely growing 🌱 And even though the quarter was largely unharmed till March, the effects have reverberated ever since – which is why the European Commission is forecasting that the eurozone economy will shrink by almost 8% this year…
An economy is technically in a recession after two consecutive quarters of negative economic growth. But on Monday, the National Bureau of Economic Research snubbed the tradition of waiting until an economy is officially in a recession to declare the US economy was, erm, officially in recession 📉 Europe doesn’t need to hear from a bean-counter to know its economy is headed for the same fate: fresh data this month showed the bloc’s manufacturing activity continued to shrink in May.
The ECB has repeatedly asked eurozone countries to take more responsibility for rescuing their own economies. And the German government did just that last week, announcing a comprehensive support package (including aid for its essential autos industry) after previously agreeing to a $10 billion bailout of airline Lufthansa ✈️ France followed suit on Tuesday with the announcement of its own $17 billion bailout – of the country's aerospace industry – as long as the companies in question commit to certain environmental targets.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.