Euro zone slump eased in May but still sharp

As government-imposed lockdown measures across the Europe have been eased the disastrous impact of the coronaviurs on the euro zone economy abated marginally this month, a survey shows.

According to Press TV, Germany, France and some other countries have begun to reopen parts of their economies, despite the thousands of cases of the virus still being reported daily.

After crashing to by far its lowest reading in the survey’s nearly 22-year history last month, IHS Markit’s Flash Composite Purchasing Managers’ Index, which is viewed as a good gauge of economic health, improved to 30.5 from April’s 13.6.

While that surpassed the median expectation of 25.0 in a Reuters poll, there was still way below the 50 mark separating growth from contraction.

“The big picture is that the index is consistent with economic activity in the region remaining very depressed even as lockdown measures are being gradually lifted,” said Jessica Hinds at Capital Economics.

In Germany, Europe’s largest economy, the easing of lockdown measures helped its services and manufacturers recover, however, companies continued to cut jobs as they expected demand to remain weak for quite a while.

The German economy shrank by 2.2 percent in the first quarter of 2020, federal statistics agency Destatis said on Friday, calling the quarter-on-quarter decline “the worst since the global financial crisis” in 2009.

In France, business slump eased in May, but not as much as expected. Data compiler IHS Markit reported a rise in its composite purchasing managers’ index to 30.5 from a record low of 11.1 in April when much of the economy was closed.In the UK, where the number of virus-related deaths is the highest, the economy bottomed out a bit this month from its nosedive in April, but still suffers from a severe contraction.

A recent study showed that as many as 6 million people there fear losing their job within six months as the coronavirus outbreak has caused the biggest economic shock in living memory.

The Center for Labour and Social Studies (Class) said workers feared the coronavirus recession would be worse than the 2008 financial crash.

SS