Q1-2020 GDP Reports of USA, Eurozone and China.

Dear PGM Capital Blog readers,

In this weekend’s blog article, we want to review with you the Q1-2020 GDP report of the world’s three biggest economies.


The world economy or global economy is the economy of all humans of the world, considered as the international exchange of goods and services that is expressed in monetary units of account.

The following two tables list the ten largest economies by GDP (nominal), and by GDP (PPP) as of 2019.

Q1-2020 will go into history as the quarter of the COVID-19 pandemic, which has put the world economies to an almost still stand.

In this blog article, we’ll take a look into the Q1-2020 GDP report of the three biggest world economies (The United Sates, European Union and China) as reported in the past 2 weeks.


On Friday, April 17, according to released government statistics, China reported that its economy shrank with 6.8% in the first quarter of 2020 compared with a year earlier.

While a contraction was expected, it is still a historic moment for China. That plunge  is by far the worst recorded figures for a single quarter that China has had since it started publishing those figures in 1992. It is also the first time China has reported an economic contraction since 1976.

China’s three major engines for growth – consumer spending, exports and fixed asset investment – all sputtered as large swaths of the country were placed on lockdown in late January and early February to contain the spread of the virus.

Retail spending dropped 19% last quarter, while exports plunged more than 13%. Fixed asset investment declined 16%.


On Wednesday, April 29, the USA bureau of economic statics reported, that the country’s gross domestic product fell 4.8% in the first quarter of this year as can be seen from below chart.

This marked the first negative GDP reading since the 1.1% decline in the first quarter of 2014 and the lowest level since the 8.4% plunge in Q4 of 2008 during the worst of the financial crisis.

Consumer expenditures, which comprise 67% of total GDP, plunged 7.6% in the quarter.

Exports dropped 8.7% while imports fell 15.3%, including a 30% drop in services.


On Thursday, April 30, preliminary estimates from Eurostat, showed that the eurozone economy contracted by 3.8% in the first quarter of 2020.

The economies of France and Spain shrank dramatically, confirming that tough lockdown measures, – which largely weren’t introduced until March – had an immediate impact in countries that use the euro.

Germany, in March recorded its largest fall in retail sales since 2007.


The historic slump, mainly caused by China’s lockdowns of cities to contain the epidemic, first spotted in its central city Wuhan, lays bare what to expect even after relatively successful containment of the virus. While China is gradually re-emerging from the crisis, countries like the US, UK and the EU are repeating some of the worst nightmares China had in the early days of the outbreak.

China now accounts for only 3% of the over 3.5 million confirmed coronavirus cases worldwide, compared with 32% for the US.

Global economic forecasts have also become increasingly pessimistic in recent weeks. The International Monetary Fund said the virus could cause the worst global recession since the Great Depression in the 1930s, while the unemployment rate in the world could soar to above 20%.

Below table shows a projection of IMF world economic growth for 2020 and 2021.

According with the above projection of IMF, China, although it might see a negative GDP growth in Q2-2020, – due to sluggish global demand – the projection shows it will end the year 2020, with a positive GDP growth while the rest of the world might still be in a deep recession.

The above projection of the IMF, also gives us an indication, that China will emerge very strong from this crisis. Due to this – similar with in 2009 – it will become the locomotive which will put the rest of the world out of the coming very deep recession.

We believe that particularly the Chinese financial sector, which are super solvent, will lead the country in becoming the next economic super power.


In our personal portfolio and the ones of our clients, we own shares of Chinese big cap financial companies.

PGM Capital is at your service as your, Professional, Trustworthy and Dedicated, Financial Adviser and Asset Management.

Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.

Yours sincerely,

Eric Panneflek

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