In the first quarter, the economies of the major industrial countries declined at the sharpest rate since the Great Recession’s financial crisis.
In a preliminary report, the Organization for Economic Cooperation and Development (OECD) said its 37 member countries reported a GDP drop of 1.8 percent as COVID-19 measures took effect, CNBC reported.
The hardest hit was France, whose GDP fell 5.8 percent in the first quarter, compared to a decline of 0.1 percent in the previous quarter. Next was Italy, where gross domestic product fell 4.7 percent, compared to 0.3 percent in the previous quarter.
In general, the OECD’s “major seven” economies — which include those two countries and Canada, Germany, Japan, the U.K. and the United States — were particularly hard hit. In the U.S., the economy fell 1.2 percent. The European Union’s economy shrank by a stunning 3.3 percent.
The 1.8 percent decline is the OECD’s biggest quarterly GDP reduction since early 2009, when the organization logged a 2.3 percent decline at the peak of the financial crisis.
The economic collapse took place as governments around the world have adopted lockdown measures to stem the spread of the coronavirus. One goal was to prevent the collapse of healthcare systems, which were challenged to come up with basic personal equipment, testing supplies and ventilators.
Still, there was some good news on the economy.
As reported here previously, economists are looking at positive indicators that the U.S. economy is improving. These include reports that even hard-hit industries such as travel and shipping are showing some improvements.
The Wall Street Journal reports that Truckstop.com, which tracks the industry’s spot market, has seen demand rising significantly for weeks.
Also, air travel is up from the depths of various shutdowns.
Even the real estate market is seeing an uptick, with mortgage applications on an upswing.
However, the global outlook remains troubled. Even though governments have brought dramatic fiscal and monetary stimulus policies online in a bid to prop up the world economy, shutdown orders amid the health crisis are expected to continue to weigh on global GDP in 2020.