US GDP for 2020 logs worst contraction in 74 years

US GDP for 2020 logs worst contraction in 74 years

Washington, DC, January 28, 2021-Real gross domestic product (GDP) increased at an annual rate of 4.0% in the fourth quarter of 2020, according to the advance estimate released by the Bureau of Economic Analysis. However, this was better than the revised -11.4% in the third quarter and the record -16.9% in the second quarter.

The US economy shrunk by 3.5 per cent a year ago as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty.

The International Monetary Fund estimates that the United Kingdom economy, for example, shrank by 10% past year, while Canada, Japan and Germany all dropped by more than 5%.

The Commerce Department reported Thursday that the nation's gross domestic product grew just under 1% in October, November and December - a marked downshift from the three previous months.

"While the pace of consumer spending slowed considerably in the fourth quarter, corporate and residential investment was "really very encouraging" and 'sets up nicely for what could be a really good 2021, ' James Knightley, an economist at ING Financial Markets LLC, said". "However, it also shows the limits of economic recovery without any major relaxation of our quarantine policy", he added. National Statistician and Civil Registrar General Dennis Mapa said in an online press briefing that the 9.5-percent contraction surpassed the 7-percent decline posted in the latter part of the Marcos administration in 1984.

"Moreover, worldwide travel restrictions and the resurgence of the virus in advanced economies also affected the pace of construction as their experts had a hard time coming to the Philippines", he added.

"Consequently, our quarantine restrictions reduced household spending by P801 billion in 2020 or an average of around P2.2 billion per day".

"The IATF (Inter-Agency Task Force on Emerging Infectious Diseases) has looked at both the economic and the health data and we have presented (these) to the President".

India’s rank slips to 86th in corruption perception index 2020
Transparency International also noted that Manila's efforts to control corruption appear "mostly stagnant" since 2012. She pointed to the "lack of trust and lack of cooperation" from the public during the health and economic crisis.

"However, agriculture performance deteriorated and contracted by 2.5 percent due to a series of typhoons, flooding, and the African swine flu".

The World Bank forecasts Philippine GDP to expand 5.9 per cent this year, below pre-pandemic levels, as restrictions on movement remain amid Southeast Asia's second-worst virus outbreak.

But if the job market is in for a recovery, the wait continues for now.

Nevertheless, Chua said the government sees "green shoots of recovery". Citing preliminary data from the Department of Budget and Management, Chua said actual spending in the fourth quarter was at P230 billion, 29.21 percent up versus the P178 billion program, while full year infrastructure disbursements was P681 billion, exceeding the P609 billion program by 11.82 percent.

"While the government relaxed restrictions on the supply side by allowing more public transport and establishments to operate, restrictions on the demand side, notably the mobility of children and families, prevented private consumption from making a stronger comeback". Government spending was weak.

"Leading indicators for the Kenyan economy point to a recovery particularly in the fourth quarter of 2020, from the disruptions earlier in the year". And how much more money will consumers spend once the pandemic is under control?

In 2020, PSA said AFF contracted 0.2 percent; Services, 9.1 percent; and Industry, 13.1 percent. "A vaccine is the powerful shot-in-the-arm that will inject consumer confidence into the economy and jolt it back to life", Villanueva said.

While output of goods and services was far slower than the record 33.4 per cent rate in the previous three months, the growth pace still exceeded the average of the decade-long expansion that ended early past year. But he cautioned that his forecast is based on the enactment of further federal economic relief, and he expects Biden initially to win congressional approval for only about half his $1.9 trillion proposal.

Related Articles