Mumbai: As the pandemic brought the global economy to a standstill, the global real GDP contracted 7.2 percent on a year-on-year basis in the second quarter (April-June) of 2020, said the ‘EcoScope’ report by Motilal Oswal Financial Services.
The global real private final consumption expenditure (PFCE) declined at record 11 percent YoY last quarter while global real gross capital formation (GCF) fell 6 percent, and global real government final consumption expenditure (GFCE) remained stagnant in 2QCY20.
It noted that India’s real PFCE contracted by 26.7 percent and real GFCE saw a growth of 16.4 per cent in Q2 2020 (YoY). In terms of real GCF, India witnessed a decline of 47.5 percent in Q2 2020 (YoY), the report added.
It said that the real GDP in advanced economies (AEs) contracted 11 per cent, while it shrank 14 per cent in emerging and developing economies (E&DEs), excluding China. Interestingly, China was the only nation in the sample of 39 nations, which posted growth in 2QCY20. Taiwan posted the slowest decline of only 0.2percent YoY, while India posted the worst decline of 24 percent YoY last quarter.
“The record decline in PFCE is not a surprise amidst the economic lockdowns and social distancing practices due to COVID-19 globally. It has declined in all 39 nations, ranging from -2.9 per cent YoY in China to -28 percent in Singapore,” it said.
Despite the massive fiscal stimulus, no growth in real GFCE in 2QCY20 is surprising, said the report, adding that the real GFCE declined 0.6 percent YoY in advanced economies but grew 1.9 percent YoY in emerging and developing economies.