List of Countries That Have Been Hit by Economic Recession

Jakarta, CNN Indonesia –

The Covid-19 pandemic (corona virus) which has infected more than 13 million people worldwide has also caused the economies of various countries to collapse or experience an economic recession.

Recession itself is a state when a country experiences a contraction in economic growth for two consecutive quarters or more.

The following are the countries officially declared to be entering the brink of recession:

1. United States

The US superpower is powerless against the effects of the coroba virus pandemic after the economy contracted or minus 32.9 percent in the second quarter of 2020. With this condition Uncle Sam’s country officially entered the recession abyss because the first quarter of 2020 was recorded to grow by minus 5 percent.

This condition puts the US into the worst economy since 1947. The economic downturn was caused by household consumption which fell 34.6 percent on an annual basis.

In fact, this indicator is a major contributor to the US economy so far.

2. Germany

The German government announced Germany’s Gross Domestic Product (GDP) minus 10.1 percent. Germany officially entered the recession. Because the German GDP contracted 2.2 percent in the first quarter of 2020.

The German Federal Statistics Agency called the contraction in GDP to be the largest and worse than the 2008-2009 financial crisis. Efforts to tackle the corona virus pandemic have plummeted the economy, especially in the export and import sectors.

However, in the midst of this recession, Germany managed to withstand the number of layoffs. The unemployment rate released in conjunction with GDP showed a steady 6.4 percent in July, the same as the previous month.

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3. Hong Kong

Hong Kong has experienced an economic recession for four consecutive quarters since 2019. Hong Kong has plunged deeper into recession in the second quarter of 2020, contracting 9 percent compared to the same period last year.

Noted in the third quarter of 2019, Hong Kong’s economic pace was minus 2.8 percent due to protracted demonstrations. In the fourth quarter of 2019, the Hong Kong economy again fell minus 3 percent which made Hong Kong officially slumped into recession.

Hong Kong Finance Secretary Paul Chan said Hong Kong was facing a bumpy road to economic recovery. Because, new cases of corona virus in Hong Kong have also jumped lately. As a result, the Hong Kong government has again imposed social restrictions.

On the other hand, Hong Kong was also hit by a negative impact reheating US-China tension which added to the uncertainty of the global economy. Moreover, Hong Kong became a source of fire US-China dispute after the Chinese government imposed national security laws in Hong Kong in early July.

“Together with the recurrence of the recent local epidemic, (these factors) indicate that it may take longer than expected for the local economy to recover,” Chan said.

4. South Korea

South Korea was also unable to escape a pandemic blow and was declared to have experienced a recession for the first time in 17 years due to a drop in exports.

The Bank of Korea announced the growth of South Korea’s Gross Domestic Product (GDP) plunged 3.3 percent in the second quarter or the April-June period compared to the previous quarter which contracted 1.3 percent.

Decline in economic growth per quarter is even the worst after the 1998 recession ago.

Exports plunged 16.6 percent or steepest since 1963 ago. Meanwhile, imports tumbled by 7.4 percent. However, household consumption rose 1.4 percent due to higher spending on durable goods such as cars and household appliances.

“The South Korean economy has been down since 2017 and the shaking of the corona virus is accelerating the economic slowdown,” said Bank of Korea Director Park Yang-Soo.

5. Singapore

Singapore Ministry of Trade and Industry (MTI) announces preliminary data (prelimenary) Singapore’s economic growth fell 41.2 percent in the second quarter of 2020 compared to the previous quarter. Some analysts rated the quarterly performance to be the worst during the record.

On an annual basis, Singapore’s economy also contracted 12 percent. The decline was deeper than the first quarter of 2020 which was minus 0.7 percent.

MTI revealed restrictions on activities that were implemented from early April to early June to prevent the spread of the corona virus outbreak. The policy resulted in a number of businesses temporarily closing operations.

The contraction in economic performance occurred because the country which was highly dependent on trade was hit by the corona virus pandemic. Analysts consider Singapore’s economic performance to be a warning signal of a slowdown in the global economy.

“This is the worst quarterly data for 55 years of Singapore’s history,” said CIMB Private Banking Economist Song Seng Wun.

(we/vws)

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