List of 5 Countries in the Recession Gap Page all

JAKARTA, KOMPAS.com – The Covid-19 pandemic, which has now reached 18 million cases worldwide, has hit the economies of most countries and even experienced them recession. At present there are 5 countries that have officially entered the recession.

Recession was a significant decline in economic activity that took place over several months, marked by negative economic growth for at least two consecutive quarters.

The economic impact during a recession will certainly be felt in a country and the effect is domino in economic activity. Like, if investment plummets in the middle of a recession then a number of jobs will disappear, making the number of unemployed and layoffs increase.

The following 5 countries have officially experienced an economic recession:

1. Germany

The German Federal Statistics Office reported that German economic growth was minus 10.1 percent in the second quarter of 2020. Continuing the economic slowdown from the previous quarter which was minus 2 percent.

The realization of economic growth in the second quarter of 2020, was the lowest since the German Federal Statistical Office collected quarterly economic growth data in 1970.

Also read: Economic Growth Minus Two Consecutive Quarter, Germany Enter Recession

The decline in the German economy is caused by a drop in consumer spending, corporate investment and exports due to the corona virus pandemic. The economic growth enjoyed by Germany for almost 10 years has also disappeared.

Exports and imports of goods and services plummeted in the second quarter of 2020, household consumption and investment in corporate production equipment also declined. Nevertheless, government spending has increased.

The German government estimates economic growth will be minus 6.3 percent so far this year, and will rebound, aka positive growth of 5.2 percent in 2021.

2. United States

The United States (US) officially entered the recession after the US economic growth was reported to be minus 32.9 percent in the second quarter of 2020, in the previous quarter the US had recorded economic growth of minus 5 percent.

There was a sharp decline in household consumption, exports, production, investment, as well as state and local government spending, which further pressured US gross domestic product (GDP).

Household consumption dropped 25 percent, the consumer price index dropped 1.5 percent, imports jumped 10 percent, and exports only rose 9.4 percent in the second quarter of 2020.

As for household income surged thanks to direct cash assistance from the US government in response to the impact of the corona virus pandemic.

Also read: Avoid Recession, Government Will Massive Shopping

This is the worst period of the US economy, even when compared to the period of the Great Depression and the Great Recession.

In comparison, the worst quarter of the US economy during the 2008 Global Financial Crisis was minus 8.4 percent in quarter IV-2008.

In the first quarter of 1958, US economic growth was minus 10 percent. Meanwhile, the worst record for the US economy was in the second quarter of 1921.

3. Singapore

Singapore’s economic growth contracted in the second quarter of 2020 which made it officially experiencing a recession. In the first quarter of 2020 Singapore’s economic growth was recorded at minus 0.7 percent, then continued to minus 12.6 percent in the second quarter of 2020.

The realization of economic growth in the second quarter of 2020 was worse than economists’ expectations, which predicted to be in the range of 10.5 percent.

The Singaporean recession was triggered by a circuit breaker policy to prevent the transmission of the corona virus (covid-19), causing external demand to weaken amid a sluggish global economy.

Also read: Avoid the Impact of Recession, What Can People Do?

The Singapore government also projected the economy in the Singat State to experience a contraction of about 7 percent to 4 percent by the end of 2020.

4. South Korea

Countries with the fourth largest economy in Asia, also suffered an economic blow due to the Covid-19 pandemic. South Korea’s economic growth slipped 3.3 percent in the second quarter of 2020, compared with the previous quarter’s 1.3 percent contraction.

The Bank of Korea said the decline in economic growth per quarter was the sharpest since the 1998 recession.

Exports which are the biggest contribution of South Korea’s economy dropped by 16.6 percent. Construction investment fell 1.3 percent, investment in capital dropped 2.9 percent, and manufacturing and service output dropped 9 percent and 1.1 percent respectively.

The only positive economic performance was private consumption which increased 1.4 percent, which was driven by the direct cash assistance policy provided by the government.

5. Hong Kong

Hong Kong is increasingly mired in the brink of economic recession amid a corona virus pandemic. The country recorded a negative economic growth of 9 percent in the second quarter of 2020,

In the previous three quarters Hong Kong reported that economic growth was also negative, namely nimus 9.1 percent in quarter I-2020, minus 3 percent in quarter IV-2019, and minus 2.8 percent in quarter III-2019.

The recession in 2019 was triggered by massive anti-government demonstrations that lasted for several months. The protest hit Hong Kong’s retail and tourism sectors.

Then the economy was worsened by the US and China trade wars. Entering 2020, Hong Kong’s economic downturn deepens due to the Covid-19 pandemic.

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