Most G20 economies record 'unprecedented' contraction in Q2 economic growth, OECD says

Most G20 member countries recorded an "unprecedented" contraction in their economies in the second quarter of 2020 as Covid-19 containment measures weighed heavily on the group, the Organisation for Economic Cooperation and Development (OECD) said.

The G20 area collectively saw their economies shrink 6.9 per cent quarter-on-quarter, significantly larger than the 1.6 per cent contraction recorded in the first quarter of 2009 at the height of the financial crisis, the OECD said in a report on Monday. China was the only exception, growing 11.5 per cent quarter-on-quarter.

On an annual basis, the G20 nations’ collective GDP shrunk 9.1 per cent during the second quarter, with the exception of China. The Chinese economy expanded 3.2 per cent compared to the same quarter in 2019, reflecting the earlier onset of the outbreak in the country and the subsequent recovery.

India was the worst hit economy with its GDP shrinking 23.5 per cent year-on-year in the second quarter, followed by the UK economy with a 21.7 per cent contraction and France with an 18.7 per cent contraction in GDP, the report showed.

"Covid-19 containment measures weighed heavily on economic activity in the second quarter of 2020, with unprecedented falls in real gross domestic product (GDP) in most G20 countries," the OECD said. "China recorded the highest annual growth ... while India recorded the largest annual fall."

The G20 – a group of the world’s 20 largest industrialised nations – includes Saudi Arabia, Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, the Russian Federation, South Africa, Turkey, the UK, the US, and the EU.

The US, the world's biggest economy, recorded a 9.1 per cent contraction in GDP while the EU economy shrank by 13.9 per cent.

The OECD economies shrank by a collective 11.7 per cent in the second quarter from the prior-year period.

The OECD includes some of the world’s biggest economies such as the US, Euro area countries, the UK and Canada.

The Covid-19 pandemic has disrupted global trade, paralysed international air travel and crippled the world economy.

The World Health Organisation reported a record one-day increase in global coronavirus cases on Sunday, with the tally rising by 307,930 in 24 hours.

The biggest increases were from India, the US and Brazil, according to the United Nations agency's website.

Updated: September 14, 2020 06:09 PM