U.S., Germany see huge falls in GDP during second quarter
Updated: 2020-07-31 17:08:45 KST
The COVID-19 pandemic has taken an unprecedented toll on the global economy, with the U.S. and Germany recording their steepest ever drops in gross domestic product.
According to statistics released by the U.S. Commerce Department on Thursday, the country's economy shrank in the second quarter at an annualized rate of 32.9 percent .
"Consumer spending accounts for 70 percent of economic activity in the U.S. so the steep contraction last quarter was driven by the lockdown."
Not annualized, U.S. GDP was down on-quarter by 9-and-a-half percent.
But by either measure, this is the largest quarterly decline since such figures were first recorded in 1947.
The plunge was far greater than the eight.four percent fall in the fourth quarter of 2008 at the peak of the global financial crisis.
The expert said he expects the U.S. economy to see an upswing in the second half of the year as the economy hit its lowest point in the second quarter.
"I believe vaccines will be developed and will be distributed in the fourth quarter. If that happens, I expect the U.S. economy to recover at a fast pace and reach the level it was at before the pandemic.
There was a huge drop in GDP also in Germany, Europe's biggest economy.
During the April to June period, Germany's economy shrank by 10.1 percent on quarter as exports and business investment collapsed.
The eurozone's second biggest economy, France, shrank on quarter by 13.8 percent.
Another expert said these contractions in the world's major economies will hurt South Korea's exports, which are the main driver of the country's economy.
And that impact, he said, will last through next year.
Eum Ji-young Arirang News.