Europe in Slump, December Industrial Production Down 2.1% MoM

Largest Drop in 4 Years... Worse Than Expected
US-China Trade War and Brexit Ended
But Chinese Epidemic Causes Company Closures and Logistics Obstacles

[Image source=AP Yonhap News]

[Asia Economy Reporter Cha Min-young] The Eurozone ended the sluggish year of 2019 with assessments that it had "fallen into a slump." This also posed a challenge to authorities, as it is expected to be difficult to escape the economic recession this year as well.

According to Eurostat, the European statistical agency, on the 12th (local time), the industrial production (excluding construction) of the European Union (EU) in December decreased by 2.1% compared to the previous month. This was the largest monthly decline in four years and was worse than the initially expected -2.0%. Compared to the same period last year, it decreased by 4.1%, which was also worse than the initially expected -2.5%.

There are various reasons why the European economy fell into a slump. The US-China trade war issue has calmed down, and Brexit (the UK’s withdrawal from the EU) was relatively smoothly concluded, but the novel coronavirus infection (COVID-19) emerged as a new variable.

Bloomberg News diagnosed, "The virus that originated in China has pushed the world into a new crisis phase," adding, "Companies have closed factories and warned of disruptions to logistics systems and negative impacts on profits."

The poor industrial indicators are also believed to have been partly influenced by individual issues in major countries. For example, France, a major country, experienced strikes in December, and Germany is said to have been affected by the construction industry during the year-end holiday season.

In particular, it is assessed that a significant challenge has arisen for fiscal and monetary authorities. Bloomberg News warned, "Speculation has begun that government parliaments need to consider easing policies to stimulate the economy," adding, "Even before the outbreak of the novel coronavirus, the Eurozone was expected to grow by only 1.1% this year."

This content was produced with the assistance of AI translation services.