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The Great recession of coronavirus: Europe pushed to the front-line

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Coronavirus has proven to be a double-edged sword that is not only battering countries’ health structure but also shredding their economy into pieces. Europe reflects the worst numbers both in terms of both health and the economy. The pandemic outbreak of the highly contagious coronavirus has sparked a near-recession scenario in the continent.

The year’s first major data assimilation of the monthly Purchasing Managers Indexes (PMI) from IHS Markit presented a very grim story. PMI fell to 44.8 in March 2020 from 49.2 in the previous month but was above market expectations of 39.0, a preliminary estimate showed. The output dived the deepest since April 2009. Besides, the region witnessed the worst fall in its manufacturing and services sector since it began in 1998.

“The near term economic outlook is terrible,” said Stephen King, senior economic adviser at HSBC Holdings Plc. “There should be no surprise about these numbers given what is going on and that they confirm what we knew from China earlier.”

Though the European governments have committed to introducing stimulus emergency packages to inject liquidity, devise plans to prevent layoffs, and undertake huge asset purchase programs, still the measures don’t seem enough to prevent the emergence of a deep recession this year. Things are rather expected to grow worse.

Bloomberg’s chief economist Tom Orlik said, “the global economy will shrink almost 2% year-on-year in the first half, with the euro-area suffering the worst back to back quarterly contractions in its history. While a pickup is expected later this year, a lot needs to go right for that to happen.”

On Monday, IMF Managing Director Kristalina Georgieva warned of the slump in the global economy caused by the worldwide business shutdowns amid the spread of Covid-19. Georgieva called the situation as bad as during the ‘2008 global financial crisis or worse’. The deadly virus has so far taken 17,000 live and infected about 3,50,000 people. WHO warned that the numbers could rise.

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