Eurozone economies shrink 40% in second quarter – Times of Oman

Eurozone economies shrink 40% in second quarter – Times of Oman

August 2, 2020 | 12:36 PM

by Xinhua

Portuguese Finance Minister and Eurogroup President Mario Centeno attends the press conference of a video meeting of the Eurogroup in Lisbon, Portugal. “” Xinhua

Brussels: Europe formally and dramatically entered into recession on Friday, with the latest data released by the European Union showing that the 19-member eurozone saw their economies contract by 40.3 per cent in the second quarter (Q2) of 2020, compared with the same period a year ago.

The main culprit, according to economists, was the stringent coronavirus lockdowns put into place across the continent starting in March, halting most non-essential industrial production, bruising business and consumer confidence, slowing tourism to a trickle and severely dampening global trade.

On a quarter-by-quarter basis, the eurozone economies contracted by 12.1 percent in Q2 2020, following a 3.8-per cent drop in Q1 this year.

By either measurement, it means the countries entered into a collective recession, which is defined by two consecutive quarters of negative economic growth.

"The latest figures are even more dreadful than we expected," Carsten Brzeski, chief German economist with Netherlands-based investment bank ING, told Xinhua. "These are preliminary estimates and we could see some small upward adjustments in the next few weeks. But the headline