Italy and Europe in crisis, the USA already out. But we have the Recovery Fund
Last week a lot of statistical data came out that clearly indicate that there are some economies already out of the economic crisis linked to covid-19, while others that, in the crisis, are still well planted.
Let's take the Euro Areas for example, how is GDP and gross domestic product going?
Here is the growth data:
In terms of GDP calculated month on month, the first quarter of 2021 is still in recession. Lockdowns in various countries have had a very severe effect on the euro area economies. this is even more noticeable if we see the trend in GDP not on a monthly basis, but on an annual basis:
Compared to last year, to the first quarter of 2020, we are still down by 1.9%, yet that first quarter had already seen a decline of 3.3%. The crisis is not over, indeed we have what the Americans call "Double deep", double lunge. No recovery. This is due to countries such as Germany, Belgium and the Netherlands which have applied harsh economic closure measures, while France has experienced slight growth because… it has applied the lockdown afterwards.
How's Italy doing? Bad indeed, very badly:
We have a recession, on an annual basis, even compared to the first quarter of 2020, and we were coming from a recession in the last quarter of 2019! A nice disaster even compared to a previous disaster.
What is the cause of this situation? Consumption, shown by retail sales, which plummeted due to the lockdown.
Consumption plummeted in the lockdown quarters, including the first of 2021. A big problem also because the famous Recovery Fund:
- however it will arrive, if all goes well, at the end of 2021;
- in any case, the forecasts relating to its effect prepared by the government indicate a further compression in consumption, at least for three years. Instead we should re-launch them.
The way to revive consumption is the one followed by the United States which is seeing a very robust recovery, thanks to Biden's income policy.
The US is already growing, on an annual basis, compared to the GDP of the first quarter of last year. So the "hole" of the economic crisis was filled and started to grow again. This is thanks to a strong increase in consumption:
The consumption side in the first quarter of 2021 was impressive, almost off the scale. Biden's policy, although questionable in some respects, had the effect of skyrocketing direct consumption and boosting GDP.
The European countries are "Austere", in short, they are beggars and in times of need they have left their citizens to themselves. But we have the miraculous "Recovery Fund".
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The article Italy and Europe in crisis, USA already out. But we have the Recovery Fund that comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/italia-ed-europa-in-crisi-usa-gia-fuori-pero-noi-abbiamo-il-recovery-fund/ on Sun, 02 May 2021 07:00:14 +0000.