Yesterday we saw the American disaster, today we have the European ones. Italy, Spain and France publish GDP data. The results are dramatic, but we expected them. Paradoxically, the problem is not what we are but illustrating you, but the fact that there is no real economic strategy to respond to it.
Let's see the Italian data: in the second quarter of 2020 it is estimated that the gross domestic product (GDP), adjusted for the calendar effects and seasonally adjusted, decreased by 12.4% compared to the previous quarter and by 17.3% in tendential terms , i.e. on an annual basis.
The cyclical change in GDP is the synthesis of a decrease in added value in all production sectors, none excluded, from agriculture, forestry and fishing, to industry, to the complex of services. On the demand side, there is a negative contribution both from the national component (gross of inventories) and from the net foreign component. Consumption has collapsed and exports have also collapsed.
The variation acquired for 2020 is equal to -14.3%. We have already exceeded, or rather doubled, the government's budget target and we align ourselves with the worst forecasts.
Can it be worse? Yes, we see Spain, with a -18.5%. On an annual basis we are at -22%
France was also hit hard, with a -13.8 quarterly, -19% year-on-year. France even manages to make less public spending, -3.8%, an element that shows the lack of efficiency in the response of the Macron government and has certainly helped such a negative result:
Here is a table showing the data of the main European countries both on a quarterly and annual basis:
If we consider the value of Italian GDP well, we went back to 1993. But I don't feel young anymore.
In theory now the bet is played on the rebound in the third quarter, but will we see it or will we witness yet another dead cat? The conditions are not good: Spain now pays a second wave with the United Kingdom imposing quarantine on those returning from those lands and Germany strongly advising against travel, therefore with a canceled summer season. France pays for the previous industrial difficulties associated with a virus that is difficult to eradicate. Latin Europe is, even politically, in disarray, without any government that has the courage to carry out serious economic growth policies and the countries that stick to the Recovery Fund which, as we know and as it is shown, will not distribute anything. . In an era in which we really should study new economic and social solutions to avoid total disaster and social turmoil, as well as great suffering, instead we seem frozen in nineteenth-century economic schemes. The Macron, Sanchez and Conte governments really appear to be selling illusions, but Spain, with a 22% drop in GDP, is truly a country at risk, as if not more than Italy. It would take more democracy, more sharing, instead we live a split society.
The article DROP PIL: a Latin disaster, and no serious cure to overcome it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/caduta-pil-un-disastro-latino-e-nessuna-seria-cura-per-superarlo/ on Fri, 31 Jul 2020 12:28:34 +0000.