The decline in real GDP in the second quarter of 2020 of 15.1 percent year-on-year is slightly higher than HNB’s expectations, according to HNB’s reaction to the DZS announcement of the First estimate of gross domestic product in the second quarter of 2020. This decline is similar to the average movements across the entire EU (a decline of 14 percent), with significant differences recorded among individual member states, depending on the epidemiological situation, implemented epidemiological measures, and economic structure.
– The intensity of the decline, as well as the negative contribution to economic activity, is particularly highlighted in the service sector, where activity decreased by over 30 percent, and is most vulnerable to social distancing measures. This applies equally to domestic demand for services, as well as to the export of services, which decreased by almost 70 percent – states the HNB announcement.
Finally, the HNB notes that the decline in gross value added (11.9 percent), which generally corresponds better with the actual movements of economic activity, was slightly lower than the decline in gross domestic product. This difference is, by all accounts, the result of delays in the collection of indirect taxes and increased subsidization of companies.
Given the recovery of high-frequency activity indicators recorded at the end of the second and the beginning of the third quarter, the decline in GDP for the entire year of 2020 is expected to be milder than the decline in the second quarter, although movements in the third quarter, due to its specific structure, will be marked by a smaller export of tourist services, conclude the HNB.
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