Global engines fire up again, Europe makes steady start

Europe, despite reeling under the pandemic, is steadily opening up.

ET Intelligence Group: The lockdown restrictions following the Covid-19 pandemic are being lifted across the world and various indicators of activity across economies point to a mixed bag.

Europe, despite reeling under the pandemic, is steadily opening up. The Eurozone’s Purchasing Managers Index (PMI) reached 30.5 in May from a record low of 13.6 in April. The index has to rise above the 50-mark to signal economic recovery. According to economic research consultancy Capital Economics, Denmark has restored its economic activity to more than 90% of normal levels.

Apple’s mobility data revealed that the road traffic in Europe’s five biggest economies — Germany, UK, France, Italy and Spain — rose to more than 60% of pre-pandemic levels in the second week of May with Germay at 93% on May 17 from the lows of 38% in March. Several tourism-dependent European countries are re-opening beaches and cafes with distancing norms in place.

Meanwhile, in the US, another 2.4 million filed for unemployment benefits claims — totalling 38 million jobs lost in the country.

On the other hand, China has scrapped its GDP growth target for 2020 amid the uncertainty — which is the first time in a decade.

Emerging economies including India are lifting curbs even as positive cases in their populations are on a rise. As a result, in an attempt to balance the objectives of healthcare, safety and economic recovery, many countries are facing regional and political standoffs.

Besides, real-time data to measure a fast-evolving situation in India is not available in the absence of which, it is difficult to measure the various facets of recovery. Further, issues related to migrant labour, too, will have an impact.