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The European Central Bank’s (ECB) growth forecast for the euro zone predicts GDP to contract.

Europe was designated as the new epicentre of the Covid-19 outbreak, which originated in China, in March 2020 by the World Health Organisation.

Italy, Spain, France, Germany, and UK are some of the worst affected countries in the region. The outbreak forced countries in the region to implement lockdown measures, which is expected to result in a massive contraction of GDP growth.

Howard Archer

Howard Archer, chief economic advisor to EY ITEM Club, tweeted on the European Central Bank’s (ECB) growth forecast for the euro zone in 2020. The ECB forecast that the euro zone GDP will contract by 8.7% in 2020, followed by a partial rebound of 5.2% in 2021 and 3.3% in 2022.

The ECB also announced a stimulus package of €1.85tn ($2.03tn) under the Pandemic Emergency Purchase Programme.

Gregory Daco

Gregory Daco, chief US Economist at Oxford Economics, shared an article on the expansion of US trade deficit by 16.7% to $49.4bn in April as imports and exports declined due to the Covid-19 pandemic.

Total trade flows including export and imports declined by 25% since the onset of the Covid-19 induced recession. The lockdowns implemented due to the pandemic impacted global commerce by disrupting supply chains and closing down factories, the article adds.

Stephen Kirchner

Stephen Kirchner, director of trade and investment at United States Studies Centre, shared his article on the impact of the Covid-19 pandemic on globalisation and labour productivity in the Organisation for Economic Cooperation and Development (OECD) economies.

Kirchner notes in the article that the Covid-19 pandemic has come at a time when globalisation was already under pressure due to US President Donald Trump’s trade war. Countries are increasingly focusing on economic sovereignty to increase resilience amid the pandemic, which is expected to further hamper globalisation.

Konstantina Beleli

Konstantina Beleli, an economist and journalist, shared an article on 1.9 million people filing for unemployment benefits during the last week of May, according to the US Department of Labor. In total, more than a quarter of the labour force or 42.6 million people have filed for unemployment benefits since the beginning of the pandemic.

The number of claims in the last week of May was higher than those predicted by economists. In addition to unemployment claims, more than 600,000 people filed for pandemic unemployment assistance, which provides assistance to people who do not quality for regular unemployment benefits.