The virus affected consumption as well. Household consumption spending shrank by 8.4% on a year-on-year basis, which is explained by the lockdown and the unavailability of some services during that period. In contrast, community consumption increased by 5.8%. Investments shrank by 13.5% because of the increasing economic uncertainty and the drop in sales. The change of the foreign trade balance also contributed to the downturn: exports shrank by 24.0%, imports shrank by 15.8% on a year-on-year basis.

With the lifting of the lockdown, the economy could restart, although this is still far from complete. Although June’s retail sales were already 0.4% higher than one year before, its industrial output was still 8.1% below the figure recorded one year before. This downturn was, however, much less severe than the one seen during April and May. The construction industry does, however, not show any signs of restarting and, because of the weak demand, its July output was also about one fifth below the level measured in the same period of 2019. Taking all these factors into account, this year’s economic output could be 5.2% lower than one year before and the next year might see a growth of 4.5%.

Please find the full report here.