Euro zone economic recovery falters in August
Saturday, 08 22 2020, Category: Economy, Country: Europe
The euro zone’s recovery from its deepest economic downturn on record hit the brakes in August, particularly in services, as pent-up demand unleashed by the easing of coronavirus lockdowns dwindled, a survey showed on Friday.
To contain the spread of the virus, which has infected over 22.5 million people globally, governments imposed strict lockdowns - forcing businesses to close and citizens to stay home, bringing economic activity to a near halt.
After many of those restrictions were relaxed, activity in the euro zone expanded in July at the fastest pace since mid-2018. But as infection rates have risen again in parts of the region, some earlier curbs have been reinstated.
So in data likely to concern policymakers and diminish hopes for a V-shaped recovery, IHS Markit’s flash Composite Purchasing Managers’ Index sank to 51.6 from July’s final reading of 54.9, below all forecasts in a Reuters poll that predicted no change.
“The fall back in the euro zone composite PMI in August suggests the initial V-shaped rebound following the lifting of the lockdowns is already fizzling out,” said Jessica Hinds at Capital Economics.