JAKARTA, KOMPAS.com – Issue recession the economy in 2020 it will become increasingly widespread after developed countries in the world have confirmed that they are entering the crisis due to the Covid-19 pandemic.
Most recently, Britain has confirmed that it is entering into a recession abyss growth economy on quarter II 2020 negative up to 20.4 percent.
Meanwhile, the country that has survived the threat of recession is China. For your information, China’s economy had contracted 6.8 percent in the first quarter of 2020 since the Covid-19 pandemic attacked it at the end of 2019.
However economic growth again touched a positive 3.2 percent in the second quarter of 2020, even though the Bamboo Curtain country does not dare to target economic growth throughout 2020.
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So, which countries have confirmed that they are entering a recession phase due to the Covid-19 pandemic?
1. United States
The country that has been confirmed to be on the brink of recession is the United States. Uncle Sam’s country recorded a minus growth of up to 32.9 percent in the second quarter of 2020.
The worsening economic growth in the second quarter then dragged the superpower into a recession phase, after recording negative growth of -5 percent in the first quarter of 2020.
It was noted that the contraction occurred due to a sharp decline in household consumption, exports, production, investment, and state and local government spending.
The German economy experienced the sharpest contraction in the second quarter of 2020. This was following the negative economic growth that Germany experienced in the first quarter of 2020.
Reporting from Reuters, Friday (31/7/2020), the decline in the German economy was caused by a drop in consumer spending, corporate investment and exports due to the corona virus pandemic. Growth the economy that Germany had enjoyed for almost 10 years has disappeared.
The German Federal Statistics Office stated that Germany’s economic growth was minus 10.1 percent in the second quarter of 2020. As for the previous quarter, German economic growth was reported to be minus 2 percent.
The figure for the second quarter of 2020 is the lowest since the Federal Statistical Office collected data on German economic growth per quarter in 1970.
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Economic growth France in the second quarter of 2020 was recorded at minus 13.8 percent. In the first quarter of 2020, French economic growth was minus 5.9 percent. With that, France officially entered into the brink of recession.
The economic downturn in France was partly due to lower household consumption, investment and trade as a result lockdown prevent the spread of the corona virus.
Italy, which is an EU country, is not free from the shadow of a recession. The country’s economic growth has grown by minus 2 consecutive quarters.
In the second quarter, the Italian economy contracted by -17.3 percent. Meanwhile, in the first quarter of 2020, the Italian economy was already minus 5.5 percent.
5. South Korea
In Asia, South Korea has been confirmed as being on the brink of recession.
This caused South Korea’s economy to experience its worst decline in two decades due to depressed export performance. In addition, social restrictions or policies social distancing causing the products to be unable to be absorbed by the market.
The country with the fourth largest economy in Asia shrank 3.3 percent in the second quarter ending in June, when compared with the previous month. The Bank of Korea said the contraction was the sharpest since 1998.
On an annual basis, the growth of South Korea’s Gross Domestic Product (GDP) will decline by 2.9 percent. This figure is the deepest decline since the fourth quarter of 1998.
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Apart from South Korea, Japan is also reportedly experiencing a recession. Economic growth was minus 3.4 percent in the first quarter of 2020. This figure is the biggest decline since 2015.
The contraction in Japan’s economic growth follows economic growth in the fourth quarter of 2019 which reached minus 6.4 percent.
7. Hong Kong
Hong Kong itself had been in recession before the Covid-19 pandemic. However, due to the pandemic, Hong Kong’s recession has been prolonged. According to preliminary data from the Hong Kong authorities, the country’s economic growth was -9 percent (yoy) in the second quarter of 2020.
The quarterly economic deficit is the fourth in a row since 2019.
Hong Kong experienced its first recession in a decade last year, caused by a wave of anti-government protests and the US-China trade war. The condition was then exacerbated by the outbreak of the corona virus which started in Wuhan, China.
Government data shows, in the first quarter of 2020 Hong Kong’s economic growth was minus 9 percent. This figure is worse than previously reported.
The Singapore economy contracted by 42.9 percent (quarter to quarter) in the second quarter of 2020.
The Ministry of Trade and Industry of Singapore also stated that this would put the country’s economy into the definition of a technical recession.
Based on government projections based on data for April and May, the country’s economy is projected to decline 41.2 percent in the second quarter of 2020 when compared to the previous quarter.
As for annually, the Singapore economy slumped 13.2 percent. This figure is worse than the government’s projection, namely -12.6 percent (yoy)
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Furthermore, there is the Philippines which recorded the deepest contraction record in the second quarter of 2020. The Philippine government has revised down its economic growth projection for 2020 as a result of the lockdown policy due to the corona virus pandemic.
According to the local national statistics agency, the Philippines’ economic growth was minus 16.5 percent in the second quarter of 2020.
This achievement was the worst since the Philippines ‘economic growth was recorded for the first time in 1981. In the first quarter of 2020, the Philippines’ economic growth was recorded at minus 15.2 percent.
The UK economy contracted by 20.4 percent in the second quarter of 2020 when compared to the previous quarter. This was caused by the corona virus pandemic (Covid-19) which made the government implement a policy of total isolation or lockdown.
However, there was an improvement in the Gross Domestic Product (GDP) in July which grew by 8.7 percent in line with the easing of the lockdown policy imposed by the government, following May’s improvement of 1.8 percent.
Quoted from CNBC, Wednesday (12/8/2020) the contraction in the second quarter was the worst after previously in the first quarter GDP also contracted by 2.2 percent.
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Meanwhile, the issue of recession in the country became a hot topic after the Central Statistics Agency (BPS) announced that economic growth in the second quarter of 2020 contracted -5.32 percent in early August.
On a quarterly basis, the economy contracted 4.19 percent and cumulatively contracted 1.26 percent.
The contraction of -5.32 percent was higher than the forecast by the government and Bank Indonesia. The former World Bank Managing Director predicts that the Indonesian economy will be depressed with a lower limit of -5.1 percent and a midpoint of -4.3 percent.
Likewise, Bank Indonesia predicts the economy will fall in the range of 4.3 percent to 4.8 percent.
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The woman who served for 2 consecutive terms in the era of President Jokowi even stated that Indonesia’s economic growth has the potential to contract again in the third quarter of 2020. This means that Indonesia will officially enter a recession phase if the economy in the third quarter is confirmed to be minus.
Most recently, Coordinating Minister for the Economy Airlangga Hartarto projects that Indonesia’s economic growth will return to minus in the third quarter of 2020.
In his presentation at the National Working Meeting of the Indonesian Employers’ Association (Rakernas Apindo), he said that Indonesia’s Gross Domestic Product (GDP) in the third quarter of 2020 would be -1 percent.
Meanwhile, in the next fourth quarter, Indonesia’s economic growth is predicted to be 1.38 percent. So that for the whole of 2020, the economy will still be minus 0.49 percent in 2020.
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