독일과 프랑스 산업생산 '뚝'·영국 300년만에 최악 경제 전망…유럽 경제 위기 현실화

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Due to the impact of the novel coronavirus infection (COVID-19), the United Kingdom has suffered the worst economic damage in 300 years. In March and April, when Europe was virtually under lockdown, the economies of Germany and France, the twin engines leading the European economy, also deteriorated sharply. On the 6th (local time), the European Union (EU) forecasted this year's economic growth rate of Eurozone countries at -7.7%, warning that "Europe is experiencing an unprecedented economic shock since the Great Depression," and this prediction is becoming a reality.

According to Bloomberg on the 7th, the German Federal Statistical Office announced that industrial production (seasonally adjusted) in March decreased by 9.2% compared to the previous month. This is the largest decline since industrial production statistics began in 1991 and is lower than the -7.4% forecasted by Bloomberg experts. By sector, manufacturing production decreased by 11.6%. Among these, the automobile sector, Germany's largest industry, shrank by 31.1%, making it the most affected industry group. Experts expect that since most European countries had not lifted lockdown measures by mid-March, economic indicators for April will worsen further.

France's production also fell short of expert expectations. The announced March industrial production growth rate was -16.2%, lower than the expert forecast of -13.4%. In particular, manufacturing production decreased by 18.2% compared to the previous month. The French Statistical Office explained that due to COVID-19 lockdown measures, current economic activity is occurring at 33% less than normal levels. Additionally, the employment situation has deteriorated significantly. The private sector employment rate in the first quarter dropped by 2.3%, resulting in the loss of 453,800 jobs. This is the lowest level since the third quarter of 2017, right after Emmanuel Macron was elected President of France.

In Europe, countries with the most severe COVID-19 situations, such as the United Kingdom and Italy, are also expected to face economic damage. The Bank of England (BOE) forecasted on the same day that this year's gross domestic product (GDP) will decrease by 14%. Especially in the second quarter, when strict lockdown measures were implemented due to the spread of COVID-19, a growth rate of -25% is expected, and for the first half of the year, -30%, marking the worst economic recession since the Great Frost in 1709, 300 years ago.

Italy, which has a large debt scale, is at risk of having its national credit rating downgraded to speculative grade. Credit rating agency Moody's will announce on the 8th whether to adjust Italy's credit rating from the current 'Baa3' to speculative grade. The market believes that due to support from the European Central Bank (ECB), the possibility of a downgrade is low, but it is not entirely ruled out.

The EU is making joint efforts to respond with the ECB. However, since there is intensified disagreement between Southern and Northern Europe regarding countermeasures, it is not easy to narrow the differences. ECB President Christine Lagarde emphasized on the day regarding the German Constitutional Court's halt on the Public Sector Purchase Programme (PSPP), saying, "We will continue to do whatever is necessary to support the Eurozone economy," and added, "The ECB is an independent institution entrusted with responsibility by the European Parliament."

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