The Eurozone’s economy shrank 0.7 percent in 2020’s final quarter, contributing to the region’s loss of 6.8 percent for all of 2020 compared to 2019, according to Eurostat, the European Union’s statistics agency.
For the year, economic output dropped 8.8 percent below 2019’s in France, 8.3 in Germany, 11 in Italy, and 5 in Spain, despite Germany and Spain showing a bit of growth in the year’s final three months.
Declines in those countries were the worst year-on-year performance since World War II.
In contrast, China’s economy grew 2.3 percent in 2020 while the U.S. kept its economic contraction to 3.5 percent, aided by 6-percent growth in the fourth quarter.
Economic lockdowns, continuing spread of the COVID virus, and a snail’s-pace vaccine distribution is likely to hobble Europe’s economic recovery through the first months of this year, the Wall Street Journal reported, while China and the U.S. continue to grow.
The U.S. economy will end 2021 1.5 percent larger than at the end of 2019; Europe’s will be 3.3 percent smaller, the International Monetary Fund has predicted. The American economy is likely to return to its pre-pandemic size by the middle of this year, according to the Financial Times.
TREND FORECAST: That the euro is at 1.21 vs. the dollar compared to 1.08 a year ago, makes only Bankster (non)sense.
The dollar is slipping again, down to a two-week low on expectations of more stimulus injections into the economy. However, with much of the Eurozone in lockdown and recording the worst economic performance among major economies, the euro should be diving.
At some point, it will sink lower. And regardless of the “official” rate of exchange, it will be inconsequential since Dragflation will persist and it will cost more to buy goods and services regardless of the “printed” currency value.
