How long will the economic pain of the G7 countries' GDP plummet in the second quarter?

(Financial World) How long will the economic pain of the G7 countries' GDP plummet in the second quarter?

　　China News Service, Beijing, September 4 (Liu Liang) The continuous spread of the global epidemic has caused a huge impact on the economies of many countries, and many developed economies have not been spared.

　　Recently, the economic data of the United States, Canada, Japan, Italy, France, Germany, and the United Kingdom of the G7 countries (hereinafter referred to as G7 countries) have been released in the second quarter of this year.

Affected by factors such as the impact of the epidemic, the GDP (Gross Domestic Product) of the G7 countries has shrunk significantly.

　　In terms of geographical distribution, in North America, the United States and Canada bear the brunt.

In the second quarter of this year, US GDP fell by 31.7% at an annual rate, the largest drop since the quarterly data was released in 1947, and the month-on-month drop was 9.5%.

　　At the same time, Canada’s second-quarter GDP fell 11.5% from the first quarter, which was the largest decline since Canada’s first quarterly GDP data in 1961.

　　Specifically, since March, US states have issued “home orders” that have caused a large area of ​​the economy to “shut down”. Waves of corporate unemployment and bankruptcy have been reported frequently. More than tens of millions of people have applied for unemployment benefits, and consumer spending has been hit hard.

In the second quarter, personal consumption expenditure, which accounts for about 70% of the US economy, fell by 34.1%.

In Canada, household spending also fell sharply in the second quarter, reaching 13.1%.

In addition, Canadian business investment fell by a record 16.2% due to work stoppage restrictions.

　　In Europe, affected by the epidemic, European countries have generally experienced economic downturns.

Among the G7 countries, the UK’s economic decline was the most obvious, with GDP shrinking by 20.4% from the previous quarter in the second quarter, the worst record since 1955.

France, Germany, and Italy also experienced negative growth. Although the decline was not as severe as that of the United Kingdom, their GDP fell by more than 10% in the second quarter.

　　Japan's second quarter was not so good either.

Data show that Japan's real GDP contracted by 7.8% month-on-month in the second quarter of 2020, and the annual rate of decline was 27.8%, setting a record for the largest decline since World War II.

　　Japan’s declaration of a “state of emergency” in April was the main reason for the economic downturn in the second quarter.

During this period, the blockade measures further restrained the consumer demand of Japanese residents, and private consumption shrank sharply.

In addition to weak domestic demand, the weakening of external demand is another major cause of Japan's economic downturn.

Japan’s exports in the second quarter plummeted by 18.5% from the previous quarter, and the weakening of external demand caused Japan’s GDP to shrink by at least 3% in the second quarter.

　　At the moment, restoring economic vitality as soon as possible is undoubtedly a top priority for all countries.

France recently announced a 100 billion euro economic recovery plan to help industries affected by the epidemic to get out of the gloom as soon as possible; the Federal Reserve adjusted its monetary policy framework to stabilize employment and prices.

　　Starting from the second quarter, the economies of individual G7 countries showed signs of recovery.

The German government recently stated that after passing the bottom of the economic downturn in May this year, its monthly economic data has shown a significant recovery trend, and it is expected to usher in a 4.4% growth next year.

With the support of national transfer payments, the disposable income and employment rate of Canadian households have also increased significantly.

　　However, in view of the different situations in various countries, the prospects for economic recovery of the G7 countries are still hazy.

The sudden curtain call of Japanese Prime Minister Shinzo Abe made the Japanese economy restart and add to the variables; the US epidemic data is still high; recently, many European countries such as France, the United Kingdom, Germany and other epidemics have re-lighted the "red light" due to the flow of holiday tourists. .

In addition, the pressure on the sovereign debt market has also made the road to economic recovery in some European countries more difficult.

　　In this regard, the World Trade Organization recently issued a document stating that the epidemic is still a “blocker” on the road to economic and trade recovery, and there are still great difficulties for global trade to have a V-shaped recovery in 2021.

The International Monetary Fund also stated that as more and more companies go bankrupt, people are unemployed for longer and longer, and the duration of economic pain may be longer than expected.

　　From the recent data on production and operation, employment, and consumer confidence in major developed economies, industry insiders have analyzed that it will take at least 3 to 5 years for countries to get out of the "dark moment" without a rebound in the epidemic. time.

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