All major Eurozone economies registered a hitherto unseen quarterly decline in real GDP: Germany -10.1% (after -2.0%), France -13.8% (after -5.9%) and Spain -18.5% (after -5.2%). The U.S. economy shrank at a quarterly rate of -9.5% (after -1.2%.), i.e. an annualized rate of -32.9%. The biggest surprise was Italy, where the GDP contraction was far less than expected at -12.4% (after -5.3%), even outperforming France.

The GDP figures confirm the different recovery speeds across advanced economies: Germany and the U.S. are in the pole position, France and Italy are the chasing group and Spain is the laggard. The main reason for both leaders is a massive fiscal response.

After a historic slump, a historic rebound. For the next quarter, we expect economic activity in the Eurozone to increase by +12.8% q/q.

The most important stage of the recovery is now ahead. The underlying rhythm will be moderate. No sustained impulse is to be expected from foreign trade because of the asynchronous opening of the global economy. Yet, the recovery of domestic demand is not happening at full speed either. Heightened economic uncertainty (insolvency risk) still weighs on investment, while some sectors are still affected by restrictions (major events). Consumers are likely to stay rather cautious, whether out of contagion fears or job insecurity.

GDP figures remain in line with our baseline scenario of a decline in real economic output of -9.0% in the Eurozone and -5.3% in the U.S. in 2020.