Global Economics Intelligence executive summary
McKinsey & Company – 10 Aug 2020
The US economy experienced a record-breaking GDP contraction of –9.5% (year over year) in the second quarter of 2020 (–32.9% annualized). Many analysts expect positive growth in the third quarter, stemming from partial reopening, but a continued surge of COVID-19 cases could halt further expansion. In terms of pandemic control and recovery, the eurozone occupies a position between China and the United States, but its economy sustained a deep contraction in the second quarter as well. Preliminary flash estimates published by the European Union show a contraction of –15.0% (y-o-y) in the eurozone as a whole, with contractions in its largest economies of –22.1% in Spain, –19.0% in France, –17.3% in Italy, and –11.7% in Germany. These are the worst quarterly results ever recorded in the eurozone and reveal how steep a climb lies ahead. Industrial production has, however, been ramping up lately as eurozone economies reopen.
Some positive economic signs did emerge in June and July in that contractions in industry slowed, business- and consumer-confidence indexes did not worsen, and equity markets continued to recover. The improvements are a product of government crisis-support measures, positive growth in China, and the emergence of economies from restrictions. The resulting increases in demand have helped revive the price of oil and other industrial commodities.
A recent report by McKinsey revealed that economic indicators improved in June and July, but disparities in controlling the novel coronavirus suggest diverging recovery paths. The full executive report can be read at the link below: