The Eurozone, the monetary union of 19 member states of the European Union (E.U.), recorded 12.7% growth in the July-September 2020 quarter, a rise from 11.8% growth registered in the previous quarter of April-June 2020.
The improvement in economic growth is majorly due to opening of economic activities which had remained suspended in the 2nd quarter due to Coronavirus (COVID-19) led restrictions. The latest data was shared by European Union’s (E.U.’s) Statistics Office – Eurostat.
However, the prospects are still not very good as the entire Europe is witnessing the second wave of COVID-19 and most of the countries are going into lockdown again. For instance, Germany and France have already announced partial lockdown. Belgium has also announced national lockdown.
The major growth was registered by France, Italy and Spain as they imposed the harshest of lockdown during 1st quarter. During the 2nd quarter, when the economic activities resumed, France reported 18.2% increase, followed by Spain with 16.7% rise and Italy with 16.1% rise. France is also infusing U.S. $ 17.5 billion to revive its economy.
Speaking on the occasion, am ING Economist – Bert Colijn said, “A whopping 12.7% rebound in GDP in the third quarter is a bittersweet result with new lockdowns just being announced. That makes a double-dip unavoidable.”
The official twitter handle of Eurostat tweeted, “Euro area #GDP +12.7% in Q3 2020, -4.3% compared with Q3 2019: preliminary flash estimate from #Eurostat https://ec.europa.eu/eurostat/en/web/products-press-releases/-/2-30102020-BP.”
The Eurozone’s biggest economy, Germany, grew 8.2% quarter-on-quarter. The increase led Germany to revise its economic forecast for the year to a 5.5% contraction, instead of the 5.8% it had expected earlier. German retail sales fell more than expected in September. The unemployment rate in the Eurozone remained steady at 8.3% in September 2020. The rise in unemployment was controlled by the Government supported programmes where the Government paid the salaries of the staff of private firms.
The Vice President of European Central Bank – Luis de Guindos has said that economic growth in the last quarter of 2020 will again not be good as many European countries have reimposed lockdown. In order to keep the economy moving, the Italian Minister of Economy & Finance – Roberto Gualtieri has said that his Government is avoiding complete lockdown.
Manufacturing companies witnessed stronger bounce back than services. Automakers like Volkswagen and Daimler AG’s Mercedes-Benz registered increased sales and profits. Businesses which rely on face-to-face interaction, such as restaurants, hotels and airlines, have been devastated and are seeing very little business.
The year-on-year economic output of Eurozone was 4.3% lower in the third quarter, though an improvement on the 14.8% annual contraction in the previous 3 months. Talking of present quarter, consumer prices in October were 0.3% lower year-on-year basis. The inflation remained stable at 0.3%. The energy prices plunged 8.4% year-on-year, offsetting a 4.3% rise in unprocessed food prices.
