Outbreak of the Covid-19 pandemic and the containment measures needed have shoved the global economy off the cliff in the first half of this year. Many economies, including most of the world’s largest economic engines such as the United States, United Kingdom and Japan, have officially recorded recessions. Here, we take a look at how the world’s biggest economies, and a few of India’s neighbours, fared in the first half of 2020.
WHAT IS A RECESSION?
At its simplest, a recession is a period during which a country’s economic output (usually measured by GDP) shrinks. General global convention, though a few institutions may have more nuanced conditions, define a recession as two consecutive quarters of declining GDP. While the first two months of the year were not as impacted by the pandemic, March, April and May saw a precipitous drop in economic activity, before June began a slow, but definite shift toward recovery.
GERMANY
IN RECESSION
The pandemic’s impact has been no less destructive for Germany, the powerhouse of the European region. In April-June, the country saw the steepest plunge in GDP since since statistics department began collecting quarterly growth data in 1970. The country’s statistics department noted that after adjusting for inflation, seasonal and calendar effects, the plunge had erased almost a decade of growth.
GDP
Q4FY20: -2.3%
Q1FY21: -11.7%
UNITED KINGDOM
IN RECESSION
The country has been one of the worst impacted, with its GDP shrinking at the fastest rates since its statistics office began keeping record. The outlook does not look promising and recovery is expected to be slow and long, say experts.
GDP
Q4FY20: -2.2%
Q1FY21: -20.8%
RUSSIA
NOT IN RECESSION
The eastern European oil exporter is among the few countries that have seen a lesser than expected impact on its economy, with GDP rates coming in slightly better during Q1FY21 than estimated by analysts.
GDP
Q4FY20: 1.6%
Q1FY21: -8.5%
CHINA
NOT IN RECESSION
China, the epicentre of the outbreak and the first impacted, had seen a sharp plunge GDP growth during the January-March quarter (Q4FY20), but has since seen the infection spread largely contained and has disclosed a GDP growth in Q1FY21.
GDP
Q4FY20: -6.8%
Q1FY21: 3.2%
JAPAN
IN RECESSION
Japan has actually seen three straight quarters of shrinking GDP up to the quarter ended June 2020. The pandemic has only widened already existing economic cracks and sent the country into its worst
recession since the World War II.
GDP
Q4FY20: -2.2%
Q1FY21: -27.8%
SOUTH KOREA
IN RECESSION
Among the earliest to be affected by the pandemic, South Korea has been pushed into the first recession in over two decades in April-June. As in rest of the world, the pandemic has battered exports and social distancing norms have hit production. The OECD believes Korea will take the smallest hit after it was able to limit the spread without imposing severe lockdowns.
GDP
Q4FY20: -1.3%
Q1FY21: -3.3%
UNITED STATES
IN RECESSION
For the US, the National Bureau of Economic Research (NBER) calls the shots on when to classify a particular period as a recession. On June 8 this year, the NBER officially announced that the US had entered a recessionary period.
GDP
Q4FY20: -5%
Q1FY21: -32.9%
BRAZIL
IN RECESSION (As per estimates)
Brazil, India’s BRICS counterpart, is already likely in a technical recession, according to the Brazilian Economy Ministry’s Secretariat of Economic Policy. While the plunge in the second quarter estimated is yet to be officially confirmed, SEP said that the decline will cause Latin America’s largest economy to enter into a technical recession.
GDP
Q4FY20: -1.5%
Q1FY21: (estimate) -8-10%
MALAYSIA
NOT IN RECESSION
The country has seen trade and industry both decimated by national lockdowns beginning March 18 and its central bank is projecting a full-year contraction of 3.5% to 5.5% before a rebound to 5.5%-8.0% growth next year. It is not yet officially in recession, analysts believe much will depend on trajectory of the recovery.
GDP
Q4FY20: 0.7%
Q1FY21: (estimate) -17.1%
SINGAPORE
IN RECESSION
Singapore’s trade dependent economy has been affected severely, as the financial hub saw immense disruption due to the pandemic and global trade has crashed. The plunge has resulted in the country’s worst recession since the Asian Financial Crisis.
GDP
Q4FY20: -2.2%
Q1FY21: -12.6%
INDONESIA
NOT IN RECESSION
The archipelago nation has recorded its first ever economic contraction in 20 years in Q1FY21, putting it at serious risk of a recession. This was the first such decline in GDP since the first quarter of 1999 when the country was in the midst of the Asian Financial Crisis, OECD data shows.
GDP
Q4FY20: 2.97%
Q1FY21: (estimate) -5.32%
THAILAND
IN RECESSION
Heavily dependent on tourism, Thailand saw its economy fall at the fastest pace in 22 year during the quarter ended June. The country’s Office of the National Economic and Social Development Council said it forecasts a yearly contraction of 7.3%-7.8% in 2020.
GDP
Q4FY20: -1.8%
Q1FY21: -12.2%
INDIA
NOT IN RECESSION
The third largest Asian economy has had a few years of subdued growth running up to the pandemic, but the first half of 2020 has made the previous years look mild by comparison. However, the country is
among the few including China that is expected to avoid a recession.
GDP
Q4FY20: 3.1%
Q1FY21: (estimate) -16.5%*