The recovery of the Euro zone economy after the deepest recession in history slowed in August, especially in the service sector. CNBC writes about this.
Many quarantine measures imposed due to the coronavirus pandemic were lifted, so business activity last month grew at the fastest pace since mid-2018. However, in some European countries, there was a repeated spike in the incidence of the disease, which again led to restrictions being imposed.
The IHS Markit index, which is an indicator of economic health, fell from 54.9 to 51.6 points in August. The recovery lost momentum due to weak demand, and people changed their minds about spending money, said Andrew Harker, Director of Economics at IHS Markit. The employment index fell to 47.7 from 47.9. Europe will need two years or more to fully recover from the deepest recession, experts believe.
The economy of the European Union countries in the second quarter of 2020 shrank by a record 14.4 percent in annual terms. This is the strongest decline since the beginning of statistics (since 1995).
In July, EU leaders agreed on a plan to save Europe’s economy by 750 billion euros. About 500 billion euros will be allocated for non-refundable grants to the countries most affected by the coronavirus, and another 250 billion will be used for loans.