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Europe’s Economy to Slump More Than 10% on Virus Restrictions

Published 04/14/2020, 02:45 PM
Updated 04/14/2020, 03:18 PM
© Reuters.

(Bloomberg) --

Europe is heading for a double-digit slump in the first half of 2020 amid widespread lockdowns to stem the spread of the coronavirus.

Bloomberg’s monthly survey of economists puts the contraction in the euro area at more than 10% in the January-June period, with most of the hit -- 8.3% -- in the second quarter. Even with an expected rebound later in the year, the bloc’s output will still decline more than 5% in 2020.

The surveys show widespread damage: Germany will shrink 7.6% this quarter, Italy 8.8%, Spain 10%, and the U.K. will suffer a near 12% contraction.

The figures echo gloomy reports from central banks and institutions such as the OECD on the economic damage. The message will be repeated again on Tuesday when the International Monetary Fund publishes its latest global outlook.

Its managing director, Kristalina Georgieva, has already set the tone for the forecasts, saying the situation is the worst since the Great Depression almost a century ago.

The timing of any rebound depends on when restrictions on movement, gatherings and businesses are lifted, or at least eased.

While some governments have indicated they’re looking into relaxing some rules, the rapid spread of the virus so far suggests a return of normality remains a distant prospect.

The number of people infected worldwide reached almost 2 million, while the death toll is close to 120,000. Three euro-area countries -- Italy, Spain and France -- account for 53,000 of those.

©2020 Bloomberg L.P.

 

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