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Coronavirus: NI faces 'deep and prolonged economic downturn’ – BBC News

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Northern Ireland faces rising unemployment, sharply reduced foreign investment and Brexit complications, the economy minister has warned.

The sobering assessment is contained in an economic recovery plan published by Diane Dodds.

The plan is intended to tackle the challenges of the next 18 months.

It includes a focus on improving skills and supporting strategically important sectors.

“Our people are our key asset so developing the skills base of our young people and workforce will remain central to our economic success,” said Mrs Dodds.

“We also intend to focus on sectors where there is a potential for growth in higher paying jobs such as life and health sciences, advanced manufacturing, clean energy and big data.”

On Tuesday, official figures showed unemployment in Northern Ireland had risen to its highest level since 1997.

‘Prolonged economic downturn’

The report, Rebuilding a Stronger Economy, says it is “inevitable that we are facing a deep and prolonged economic downturn”.

It warns unemployment will keep rising and that foreign direct investment is likely to be greatly reduced in the short and medium term.

It adds that these issues could be could be further compounded by the operation of the NI Protocol and Brexit more generally.

The report says that some of the structural weaknesses of the NI economy will need to be tackled for a sustained recovery.

Those include too few higher-paying jobs, a skills gap and regional imbalances.

The report says that re-skilling people who lose their jobs will need a particular focus.

Meanwhile, Mrs Dodds also announced the membership of her Economic Advisory Group: It will be lead by Ellvena Graham, the former head of Ulster Bank in Northern Ireland.

‘Very frightening’

BBC NI’s Good Morning Ulster spoke to two young people about their future prospects.

Niamh, a student at Queen’s University, said that a Youth Forum survey showed that unemployment was a “massive issue” for 20% of young people.

“There’s just no jobs going and all the people who are working in hospitality – so many young people – hospitality and retail jobs are just gone,” she said

“There’s no way for young people to really make money.”

Adam, who has just finished his A-Levels, said: “We’re looking at a big recession, maybe as bad as ones previous, maybe the worst we’ve ever had.

“So I think we all need to band together and think of supporting each other.

“It is very frightening. The amount of jobs that will be available will drastically reduce.”

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Return of North American economy will negate need for tariffs, PM tells Trump – CP24 Toronto's Breaking News

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WASHINGTON – Prime Minister Justin Trudeau urged Donald Trump to think twice Monday before imposing new tariffs on Canadian aluminum, saying the sector is emerging from the pandemic-induced production stance that prompted the White House to consider such measures in the first place.

Trudeau, who said in a news conference he had spoken to the U.S. president earlier in the day, told him that with the North American economy getting back up to speed, Canada’s aluminum smelters would soon be back producing value-added specialty products for the American auto sector.

The spectre of new tariffs emerged last month after Canadian producers, unable to shut down production and with their usual customers hamstrung by the impact of COVID-19, were forced to make a more generic form of aluminum and ship it to warehouses in the United States.

That alarmed certain U.S. smelter owners and operators, who have been urging the U.S. trade representative’s office to slap fresh levies on imports from Canada.

The pandemic “caused certain disruption in the aluminum sector that is starting to realign itself, given the economies are starting up again and manufacturing is getting going,” Trudeau said after his call with Trump.

“I impressed upon him that it would be a shame to see tariffs come in between our two countries at a time where we’re celebrating NAFTA and at a time where we want our businesses and our manufacturers to get going as quickly as possible.”

Canada has been on the outside looking in when it comes to the coming into force of NAFTA’s successor, the U.S.-Mexico-Canada Agreement, which took shape in 2017 and 2018 before a backdrop of steadily worsening relations between Trump and Trudeau.

While Trump welcomed Mexico’s President Andres Manuel Lopez Obrador to a celebratory event at the White House last week, Trudeau kept his distance, citing the tariff dispute and the ongoing COVID-19 pandemic among his reasons. A readout from Monday’s call said the prime minister “expressed regret” for being unable to attend.

The U.S. trade representative reportedly gave Canada a deadline of July 1 to impose export restrictions – the very day the USMCA took effect. That deadline has come and gone without a hint from either the White House or U.S. trade ambassador Robert Lighthizer about what happens next.

Trudeau said he and Trump also discussed the Canada-U.S. border, where non-essential travel has been curtailed since March in an effort to limit the spread of the novel coronavirus. The 30-day bilateral agreement to limit discretionary cross-border travel without restricting trade or essential workers has been extended three times and is now set to expire July 21.

Since the last extension, however, the public health crisis in the U.S. has exploded.

More than 100,000 new COVID-19 cases were identified over the weekend, particularly in southern states that reopened early, with Florida emerging as the new epicentre. Canada has had 108,000 confirmed cases in total, compared with more than 3.3 million cases and 135,000 deaths in the U.S. to date.

Hospitals in major urban centres across the United States are again nearing capacity and health care workers face another critical shortage of personal protective equipment like masks and respirators.

Recent polls suggest Canadians remain unequivocally opposed to reopening the border any time soon – a predictable symptom of the accelerating crisis in the U.S., said Kathryn Friedman, a University at Buffalo law professor and Wilson Center global fellow.

But there could be other lingering foreign-policy irritants at play, she added.

“I wonder if the United States had treated our dear neighbour, friend and ally a little bit better over the last three-and-a-half or so years, if the reaction would be as harsh,” Friedman said. “Maybe people are just like, ‘Well, too bad, I don’t care if you want to open the border.”’

Friedman is among several Canada-U.S. experts, border community leaders, northern state lawmakers and others who want to see a plan for when the time comes to lift the restrictions.

“I think we have to have this conversation,” she said. “I think we have to engage the right people now, so that when the border restrictions are eased, whenever that’s going to be, they are done so responsibly.”

It’s less a question of when and more a question of how, Friedman said – what sort of controls, testing and screening measures and other tools will need to be in place even after the emergency has passed.

“I’m more concerned that the climate will change, and some relevant government officials won’t have given any thought to how this border opening is going to take place,” she said.

“We have to get our act together and really think more clearly about how we’re going to handle these kinds of situations in the future, and really use science-based data – an evidence-based, science-based approach – to health screenings when it comes to border restrictions and border policies.”

Trudeau demurred Monday when asked whether this time, Canada and the U.S. might negotiate a closure that lasts longer than the standard 30-day window.

“We will be discussing with our American partners what the next steps should be, and I think this is a situation that is evolving rapidly and we need to keep responding to the situation on the ground.”

This report by The Canadian Press was first published July 13, 2020.

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China's economy seen growing 2.5% in second quarter as lockdowns end, stimulus kicks in: Reuters poll – TheChronicleHerald.ca

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By Kevin Yao

BEIJING (Reuters) – China’s economy likely returned to modest growth in the second quarter after a record contraction, as lockdown measures ended and policymakers announced more stimulus to combat the shock from the coronavirus crisis, according to a Reuters poll.

The world’s second-largest economy likely grew 2.5% in April-June from a year earlier, reversing a 6.8% decline in the first quarter – the first contraction since at least 1992 when official quarterly gross domestic product (GDP) records started, the poll showed.

But the expected growth rate would still be the weakest expansion on record.

Forecasts by 55 analysts polled by Reuters ranged from a

3.1% contraction in gross domestic product (GDP) to a 4.0% expansion in the second quarter, reflecting uncertainty over the pace of recovery.

China’s services sector, which is dominated by smaller companies, has not rebounded as quickly as industrial production, though there are some signs that consumer confidence is gradually improving.

On a quarterly basis, GDP is expected to have grown 9.6% in April-June, compared with a decline of 9.8% in the previous

quarter.

The government has rolled out a raft of measures, including more fiscal spending, tax relief and cuts in lending rates and banks’ reserve requirements to revive the virus-hit economy and support employment.

Still, analysts say the recovery remains fragile, as rising coronavirus inflections in some countries overshadow improved demand for Chinese exports while heavy domestic job losses and lingering health concerns have kept consumers cautious.

Data on Tuesday showed the country’s imports in June rose for the first time this year as stimulus boosted demand for building materials, while exports also edged up as overseas economies reopened after lockdowns.

While China’s economy is showing a steady recovery, a hard battle still lies ahead as the situation remains severe both at home and abroad, state radio quoted Premier Li Keqiang as saying on Monday.

China releases second-quarter GDP data on Thursday (0200 GMT), along with June factory output, retail sales and fixed-asset investment.

Analysts polled by Reuters expect industrial output to grow 4.7% in June from a year earlier, quickening from a 4.4% rise in May, while retail sales were seen rising 0.3%, versus a 2.8% fall in May. Retail sales have slumped for five months in a row.

Fixed-asset investment is forecast to fall 3.3% in the

first six months from a year earlier, easing from a 6.3%

slide in the first five months, according to the poll.

POLICY SUPPORT STILL NEEDED

Central bank governor Yi Gang has said China would keep financial system liquidity ample in the second half but would need to consider withdrawing support at some point, raising questions among investors over when it may start dialing down stimulus.

Still, analysts expect policymakers to maintain support for the economy for a while longer to ensure the recovery remains on track, despite a rise in overall debt levels.

Tang Jianwei, senior economist at Bank of Communications, expected the central bank to dole out 1-2 more targeted reserve requirement cuts and another 20 basis points of cuts in the interest rate on the medium-term lending facility in the second half.

Credit growth is also expected to remain strong. New bank lending hit a record 12.09 trillion yuan ($1.72 trillion) in the first half of the year.

Moreover, China has allowed local governments to issue 3.75 trillion yuan in special bonds to fund infrastructure projects, up from 2.15 trillion yuan last year, and issue 1 trillion yuan in special treasury bonds to spur activity.

Tang expected the economy to grow around 2.5% this year.

The International Monetary Fund has forecast an expansion of 1.0% for China for the full year, the only major economy expected to report growth in 2020.

($1 = 7.0092 Chinese yuan renminbi)

(Polling by Shaloo Shrivastava in Bengaluru and Jing Wang in Shanghai; Reporting by Kevin Yao; Editing by Kim Coghill)

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UK economy begins tepid recovery in May after record slump – TheChronicleHerald.ca

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By David Milliken

LONDON (Reuters) – Britain’s economy took a first step on the long road to recovery from the COVID-19 crisis in May, as activity began to pick up after lockdown restrictions began to ease, but there was less of a rebound than economists had forecast.

Gross domestic product rose by 1.8% in May after slumping by a record 20.3% in April, Britain’s first full month of lockdown, the Office for National Statistics said, below all forecasts in a Reuters poll of economists.

Over the three months to May, the economy shrank by 19.1% and compared with a year ago it is 24.0% smaller.

“The pick-up in output in May is more likely to reflect the partial release of pent-up demand as restrictions began to loosen, rather than evidence of a genuine recovery,” said Suren Thiru, head of economics at the British Chambers of Commerce.

The weak rebound was driven by just 0.9% growth in Britain’s large services sector, with weakness in professional services, commercial property and computer programming.

More than 44,000 people in Britain have died from the disease, the highest death toll in Europe.

Britain’s government closed non-essential shops and other businesses to the public on March 23, shortly after ordering the closure of bars, restaurants and cinemas.

In May, there was a limited relaxation of lockdown rules, and more businesses became used to operating under the new restrictions.

Private sector data has shown some signs of recovery in May and June, as lockdown measures eased, but the Bank of England has warned that a big rise in unemployment is likely later this year as temporary job support measures end.

“Today’s figures underline the scale of the challenge we face. I know people are worried about the security of their jobs and incomes,” finance minister Rishi Sunak said after Tuesday’s data.

Last week finance minister Sunak announced an extra 30 billion pounds ($38 billion) of stimulus to limit the increase in unemployment.

($1 = 0.7970 pounds)

(Reporting by David Milliken and Andy Bruce; editing by Michael Holden)

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