Coronavirus: France and Italy enter recession as global economic crisis deepens
30 April 2020, 18:02
France and Italy's economies have slumped into recession while US unemployment figures have hit the 30 million mark.
The French economy recorded a historic decline and entered recession on Thursday morning as its GDP fell for the second consecutive quarter because of the coronavirus pandemic and resulting lockdown measures.
A 5.8 per cent slump in the eurozone's second-biggest economy during the first quarter of 2020 - following a 0.1 per cent decline in the fourth quarter of 2019 - represents a far greater contraction than the 1.6 per cent hit in early 2009 following the financial crash of the previous year.
The dramatic fall is the largest recorded in the country since the Second World War, surpassing the 5.3 per cent slump in the second quarter of 1968 when France was gripped by civil unrest, mass student protests and general strikes.
Similarly, the Italian economy saw GDP shrink for another quarter thanks to the outbreak, this time by 4.7 per cent. This follows a 0.3 per cent decline experienced at the end of 2019. It too is greater than the 2.8 per cent contraction witnessed following the 2008 financial crash.
Italy's fall is not as large as economists had forecast, whereas France's decline surprised experts in exceeding expectations.
Perhaps oddly, unemployment figures in Italy fell from 9.3 per cent in February to 8.4 per cent in March - the lowest rate in nine years.
Meanwhile in Spain, the third-most impacted country in Europe behind Italy and the UK, GDP plunged sharply by 5.2 per cent - the worst drop since records began in the 1970s.
Across the Atlantic, US unemployment figures rose by another 3.8 million to 30 million since the pandemic began, according to the labour department.
The country has well and truly become the clear global epicentre of the disease, which has hit the job market with full force.
However, the number of people claiming unemployment per week has been consecutively falling since a peak at the end of March and beginning of April.
Nonetheless, the levels being recorded have been unseen since the Great Depression of the 1930s with some states struggling to keep up with the number of claims, meaning the total figure could be higher.
The US economy also shrank in the opening quarter of 2020, falling by 4.8 per cent according to the advance estimate by the Bureau of Economic Analysis (BEA).
It is the country's first decline since 2014 and represents the largest drop in over a decade.
"The decline in first-quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued 'stay-at-home' orders in March," the BEA said
"This led to rapid changes in demand, as businesses and schools switched to remote work or cancelled operations, and consumers cancelled, restricted, or redirected their spending."
It added that "the full economic effects of the Covid-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified."