Almost no country has been immune to the economic impact of the COVID-19 virus. We all knew going into this that there would be consequences of ‘turning off’ the global economy for a period of time. Now we are witnessing the true severity of the impact.
Consumer spending, which makes up a large portion of GDP growth numbers around the globe, witnessed the biggest decline – specifically, shops, restaurants and tourism. GDP in these segments halved and in some cases more than that. Last Friday, we saw a number of countries publish their GDP numbers. Britain’s GDP fell 25% from February to April.
In Europe, industrial production in April fell 17.1% (Spain down 21.8%; France 20%, Italy 19% and Germany 18%. Eastern EU countries fared even worse). While this was slightly better than expectations, it was still the largest fall since records began in 1991. German car manufacturing ground to halt and Italy’s textile business dropped 80%.
Over the weekend, Latin American COVID-19 health related numbers were concerning and when you reflect on the numbers above, we can intuitively conclude that this region will suffer a similar impact. Beijing also announced another outbreak of the virus in China.
One piece of good news came through over the weekend. France lifted a number of restrictions to restart the economy.