BUENOS AIRES — Argentina appointed a government team to kick off talks with creditors to renegotiate about $100 billion in sovereign debt as the new center-left administration of President Alberto Fernandez postponed payments on some of its short-term debt.
The “external debt sustainability management unit” was created in the context of the government’s sweeping economic bill, expected to be passed by the Senate later on Friday, according to a statement by the Secretariat of Finance.
The secretariat said it was inviting financial institutions and advisers to be part of a process that would allow “the recovery of external public debt sustainability.”
Fernandez, inaugurated Dec. 10, inherits an economic crisis, including annual inflation of more than 50% and an economy that is expected to contract for a third straight year in 2020. In addition to trying to get the economy back on track, the government must steer debt revamp talks with bondholders and other creditors, including the International Monetary Fund.
Earlier on Friday, after 20 hours of debate, Argentina’s lower House approved the government’s economic plan, which includes an array of tax increases on grains exports, personal property and foreign assets held abroad.
The Senate was expected to pass the measure, dubbed the “Social Solidarity and Production Reactivation,” Friday night.
The cornerstone of Fernandez’s program, the law aims to maintain fiscal balance to guarantee the future payment of public debt and, at the same time, expand social spending to boost the economy as Argentina struggles with higher poverty and increased unemployment.
Also on Friday, the government said it would postpone payments on some short-term notes known as “Letes” until Aug. 31, 2020. About $9 billion in such payments due to expire from Friday would be affected, according to a government source.
The postponement did not come as a surprise, according to Nikhil Sanghani, a London-based economist at Capital Economics, but longer-term concerns still linger for investors.
“The government has merely kicked the can down the road and maturity extensions alone will not be enough to resolve the debt problem. We think that it will have to pursue a large debt write-down next year,” Sanghani said.
Fitch downgraded Argentina to ‘RD,’ or “Restricted Default,” a credit rating applied to borrowers that have defaulted on one or more of its commitments while to continuing to meet others.
(Reporting by Walter Bianchi, Cassandra Garrison, Hugh Bronstein, Eliana Raszewski and Nicolas Misculin; additional reporting by Rodrigo Campos in New York; Editing by Alison Williams, Steve Orlofsky, Dan Grebler and Richard Chang)
Coronavirus outbreak will hit Singapore's economy this year: trade minister – TheChronicleHerald.ca
SINGAPORE (Reuters) – Singapore said on Monday that the coronavirus outbreak will hurt its economy this year, as it announced new measures to tackle the disease which originated in China and has spread to the city-state and several other countries.
The Southeast Asian travel and tourism hub, which recorded its lowest growth rate in a decade last year at 0.7%, has reported four cases of the coronavirus that has killed 80 people in China so far.
“We certainly expect there to be an impact on our economy, business and consumer confidence this year especially as the situation is expected to persist for some time,” trade minister Chan Chun Sing said.
The government is considering support measures for hard-hit sectors like tourism which could include property tax, rebates and worker levy cuts, he added.
Chinese nationals make up the largest share of visitors to Singapore, one of the worst hit countries outside of China in the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS) which killed 800 people globally.
Singapore is currently forecasting growth in a wide range of 0.5-2.5% this year.
Chan is part of a government taskforce set up to tackle the coronavirus spread in Singapore.
The taskforce also announced a raft of new measures on Monday to halt the spread of the virus, including urging all school students and staff with a recent travel history to China to stay at home for a fortnight. Families in Singapore, many of which are ethnically Chinese and have relatives in mainland China, are currently traveling for Lunar New Year holidays.
It also issued a new advisory for travelers to defer all non-essential travel to mainland China and said it will start temperature screening all inbound flights to Singapore.
The death toll in China from the coronavirus grew to 80 on Monday as residents of the Hubei province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak.
The virus has so far spread to more than 10 countries including the United States, Japan and France.
(Reporting by Aradhana Aravindan; Writing by John Geddie; Editing by Tom Hogue & Shri Navaratnam)
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An international outbreak of respiratory illness sparked by a novel coronavirus has spread from its origins in central China to at least 11 countries, with more than 1,200 confirmed cases — including a presumed case in Canada — and over 40 deaths.
Like previous outbreaks, including the SARS virus 17 years ago, the flu-like disease poses a risk to economies around the world as fear and confusion lead to abrupt changes in behaviour, decreased economic activity and a ripple effect across sectors that threatens everything from productivity to consumer prices.
The Severe Acute Respiratory Syndrome pandemic of 2003 cost the Chinese economy up to US$20 billion, according to the Asian Development Bank, as travel warnings and transit shutdowns discouraged consumption, foreign tourists stayed away and local residents stopped going out.
Coronavirus outbreak: London’s Lunar New Year celebrations overshadowed by virus fears
“The travel and tourism sectors were most obviously hit, although that ripples through the entire economy,” said Richard Smith, a professor of health economics at the University of Exeter Medical School.
“But many effects are short-lived during an outbreak as once the panic is over people go back to business as usual.”
Chinese authorities clamped down on mass transit during the SARS outbreak, hampering commutes, shopping runs and social outings. The national securities regulatory commission closed stock and futures markets in Shanghai and Shenzhen for two weeks to prevent viral transmission. And Beijing ordered movie theatres, internet cafes and other venues to shut down temporarily while hotels, conference centres, restaurants and galleries saw visitors almost disappear completely.
China’s response to the current crisis appears to be swifter, and the disease less virulent, but the country now boasts a far more extensive high-speed rail network than it did in 2003, and its economy is six times larger, upping the risk of transmission and the repercussions of an epidemic.
“China is the engine of the global economy, churning out goods,” said German health economist Fred Roeder.
Its critical role in international shipping may be thrown into disarray as authorities begin to hold back some ships from entering the port at Wuhan, a key hub on the Yangtze River.
“If they cannot leave it creates huge delays in the supply chain and value chain of businesses all across the world,” Roeder said. “It could actually hit the latest generation of smartphone if ports are shutting down.”
Manufacturing could also feel the crunch as supply chains stall, he said.
Roeder has felt firsthand the disruptive power of a pandemic. In the summer of 2003 the teenage Berliner was eagerly gearing up for a United Nations youth conference that would take him to Taipei, but the event was cancelled a few days beforehand due to SARS.
The epidemic also sparked layoffs and time away from work. At one point Singapore Airlines asked its 6,600 cabin crew to take unpaid leave. Children stayed home from school, prompting more parents to shirk their job duties and further reducing productivity, said AltaCorp Capital analyst Chris Murray.
“I was losing guys left, right and centre as people were quarantined,” recalled Murray, based in Toronto — the epicentre of the SARS pandemic outside of Asia. The disease infected 438 Canadians in total and caused 44 deaths in the Toronto area.
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The economic damage culminated with World Health Organization’s one-week travel advisory for the city in April 2003, costing the Canadian economy an estimated $5.25 billion that year.
The outbreak of H1N1, or swine flu, in 2009 also sparked work “dislocations,” Murray said. “It went from, `Maybe it’ll be okay,’ to sheer panic.”
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Freelancers and gig economy workers such as musicians or ride-hail drivers may feel the pinch more acutely, since they can’t rely on a steady wage when demand shrinks.
“It’s something that unfortunately has happened before in a similar way and it tends to affect areas like retail,” said Carolyn Wilkins, senior deputy governor of the Bank of Canada, said this week.
“People don’t go out, they don’t fly in planes, they don’t do as much tourism to the affected areas,” she said.
The fallout makes workers ranging from servers to wholesale bakers to non-unionized hotel staff more vulnerable. Meanwhile spending or investment plans by larger companies may have to be delayed, said Roeder.
New coronavirus’ ability to spread getting stronger say Chinese officials
It is not clear how lethal the new coronavirus is or even whether it is as dangerous as the ordinary flu, which kills about 3,500 people every year in Canada alone.
“Still, we should be extremely worried about the economic effects of this,” Roeder said, calling on Chinese authorities to work transparently with Western governments and disease control experts to mitigate the crisis.
“At the end of the day, it hits the entire economy. No one benefits from this.”
© 2020 The Canadian Press
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