Economy

OECD countries log worst quarterly contraction in GDP since the financial crisis

Key Points
  • According to provisional estimates, it marked the OECD's largest quarterly GDP decline since the 2.3% contraction of early 2009, which occurred at the height of the financial crisis.
  • The Organization for Economic Cooperation and Development is an alliance of 37 countries.
Workers back on the job at the construction site of new towers near Government Center in downtown Boston on May 19, 2020.
Lane Turner | The Boston Globe | Getty Images

Gross domestic product across OECD countries fell by 1.8% in the first quarter as Covid-19 containment measures weighed on the economy.

According to provisional estimates, it marked the organization's largest quarterly GDP decline since the 2.3% contraction of early 2009, which occurred at the height of the financial crisis.

The Organization for Economic Cooperation and Development is an alliance of 37 countries.

Among the "major seven" members — Canada, France, Germany, Italy, Japan, the U.K. and the U.S. — France and Italy, which implemented stringent coronavirus measures in the quarter, saw the most significant damage.

VIDEO4:0504:05
Life and the economy will not be normalized soon, OECD chief says

French GDP fell 5.8% in the three months to March, while Italy's GDP contracted by 4.7%. In the previous quarter, their GDP fell by 0.1% and 0.3% respectively.

GDP in Germany and the U.K. was down by around 2%, with GDP for the entire European Union shrinking by 3.3%. Across the Atlantic, U.S. GDP fell by 1.2% in the first quarter, compared with 0.5% in the previous quarter.

Governments around the world have enforced lockdown policies in an attempt to mitigate the spread of the coronavirus, which has killed 346,508 people.

Despite unprecedented fiscal and monetary stimulus policies being rolled out by policymakers in a bid to reduce the economic impact of the pandemic, lockdown policies and the toll of the health crisis are expected to continue to weigh on global GDP in 2020.

The International Monetary Fund has warned that the world faces the deepest global recession since the 1930s, while the World Bank has forecast a worldwide GDP contraction of 5% this year.