Connect with us

Economy

Coronavirus update: COVID-19 likely to cost economy $1 trillion during 2020, says UN trade agency – UN News

Published

on


“We envisage a slowdown in the global economy to under two per cent for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September,” said Richard Kozul-Wright, Director, Division on Globalization and Development Strategies at UNCTAD.

Launching the UNCTAD report as world financial markets tumbled over concerns about supply-chain interruptions from China, and oil price uncertainty among major producers, Mr. Kozul-Wright warned that few countries were likely to be left unscathed by the outbreak’s financial ramifications.

Doomsday scenario

One “Doomsday scenario” in which the world economy grew at only 0.5 per cent, would involve “a $2 trillion hit” to gross domestic product, he said, adding that collapsing oil prices had been “a contributing factor to that growing sense of unease and panic”.

While it was difficult to predict how the international financial markets will react to COVID-19’s impacts “what they do suggest is a world that is extremely anxious”, he said.

“There’s a degree of anxiety now that’s well beyond the health scares which are very serious and concerning.”

Spend now, to avoid meltdown later

To counter these fears, “Governments need to spend at this point in time to prevent the kind of meltdown that could be even more damaging than the one that is likely to take place over the course of the year”, Mr. Kozul-Wright insisted.

Asked about how different countries might react to the crisis including China – where the virus first emerged in December – and the United States, the senior UN economist said that the Chinese Government would likely introduce significant “expansionary measures” – shorthand for increasing spending or tax cuts.

“It will almost certainly do that,” he said. “Will the US Government in an election year, which is where we are…also need to respond in a way other than simply cutting taxes and reducing interest rates? I suspect it will do.”

Turning to Europe and the Eurozone, Mr. Kozul-Wright noted that its economy had already been performing “extremely badly towards the end of 2019”.

Europe facing recession

It was “almost certain to go into recession over the coming months; and the Germany economy is particularly fragile, but the Italian economy and other parts of the European periphery are also facing very serious stresses right now as a consequence of trends over (the last few) days.”

Describing many parts of the Latin American region as similarly vulnerable, he added that Argentina in particular “will be struggling as a consequence of the knock-on effects of this crisis”.

Commodity-rich countries face hit from stronger dollar

So-called Least Developed Countries, whose economies are driven by the sale of raw materials, will not be spared either.

“Heavily-indebted developing countries, particularly commodity exporters, face a particular threat”, thanks to weaker export returns linked to a stronger US dollar, Mr. Kozul-Wright maintained. “The likelihood of a stronger dollar as investors seek safe-havens for their money, and the almost certain rise in commodity prices as the global economy slows down, means that commodity exporters are particularly vulnerable.”

“Ultimately,” Mr. Kozul-Wright added, “a series of dedicated policy responses and institutional reforms are needed to prevent a localized health scare in a food market in Central China from turning into a global economic meltdown”.

Threat of pandemic ‘very real’: Tedros

Although the threat of COVID-19 becoming an official pandemic “has become very real”, the world is “not at  the mercy of the virus”, said the World Health Organization (WHO) head, Tedros Adhanom Ghebreyesus, briefing journalists in Geneva on Monday.

He said it was important not to let grim milestones such as passing the infection rate of 100,000 worldwide, sap resolve to contain the disease, stressing that 93 per cent of deaths so far have been in just four countries.

It would be “the first pandemic in history that could be controlled. The bottom line is, we are not at the mercy of the virus”, he added.  

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

China's economy remains resilient despite external risks, says Xi – Reuters Canada

Published

on


FILE PHOTO: Chinese President Xi Jinping arrives for the meeting to commend role models in China’s fight against the coronavirus disease (COVID-19) outbreak, at the Great Hall of the People in Beijing, China September 8, 2020. REUTERS/Carlos Garcia Rawlins

BEIJING (Reuters) – China’s economy remains resilient and there are ample policy tools at Beijing’s disposal despite rising external risks, President Xi Jinping said in remarks published on Saturday.

The world’s second-largest economy has steadily recovered from a virus-induced slump, but analysts say policymakers face a tough job to maintain stable expansion over the next several years to turn China into a high-income nation.

“The basic characteristics of China’s economy with sufficient potential, great resilience, strong vitality, large space for manoeuvre and many policy instruments have not changed,” Xinhua news agency quoted Xi as saying.

China has strong manufacturing capacity, very large domestic markets and huge investment potentials, Xi said.

Xi reaffirmed a “dual circulation” strategy that would help steer the economy towards greater self-reliance, as U.S. hostility and a global pandemic increase external risks.

China still enjoyed “strategic opportunities” in its development, although the coronavirus pandemic has exacerbated global challenges as globalisation slows and unilateralism and protectionism are rising, Xi was quoted as saying at a meeting on the country’s 14th five-year plan (2021-2025).

“We must seek our development in a more unstable and uncertain world,” he said.

Xi urged calmness amid rising difficulties and challenges.

“The great rejuvenation of the Chinese nation can never be achieved easily with the beating of gongs and drums,” he said.

Reporting by Kevin Yao; Editing by Alex Richardson

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

China's economy remains resilient despite external risks, says Xi – SaltWire Network

Published

on


BEIJING (Reuters) – China’s economy remains resilient and there are ample policy tools at Beijing’s disposal despite rising external risks, President Xi Jinping said in remarks published on Saturday.

The world’s second-largest economy has steadily recovered from a virus-induced slump, but analysts say policymakers face a tough job to maintain stable expansion over the next several years to turn China into a high-income nation.

“The basic characteristics of China’s economy with sufficient potential, great resilience, strong vitality, large space for manoeuvre and many policy instruments have not changed,” Xinhua news agency quoted Xi as saying.

China has strong manufacturing capacity, very large domestic markets and huge investment potentials, Xi said.

Xi reaffirmed a “dual circulation” strategy that would help steer the economy towards greater self-reliance, as U.S. hostility and a global pandemic increase external risks.

China still enjoyed “strategic opportunities” in its development, although the coronavirus pandemic has exacerbated global challenges as globalisation slows and unilateralism and protectionism are rising, Xi was quoted as saying at a meeting on the country’s 14th five-year plan (2021-2025).

“We must seek our development in a more unstable and uncertain world,” he said.

Xi urged calmness amid rising difficulties and challenges.

“The great rejuvenation of the Chinese nation can never be achieved easily with the beating of gongs and drums,” he said.

(Reporting by Kevin Yao; Editing by Alex Richardson)

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Fonds de solidarité FTQ is Solid and Committed to Supporting the Economy and Jobs – Canada NewsWire

Published

on


“It’s up to us to build the future we believe in
and to invest in a better society.”
– Gaétan Morin

Highlights as at May 31, 2020:

  • $1.4 billion invested in Québec economy (40% more than projected);
  • Share value at $44.24 (down $1.96 from December 31, 2019, and up $0.34 over July 5, 2019);
  • Annual return of 0.8%;
  • Six-month return of -4.2%;
  • Comprehensive annual income of $230 million (profit);
  • Net assets of $13.8 billion;
  • $3 billion in redemption requests;
  • 707,935 shareholders-savers.

MONTRÉAL, Sept. 19, 2020 /CNW Telbec/ – At the Annual General Meeting of Fonds de solidarité FTQ shareholders, management reported on the year ended May 31, 2020. The AGM was held virtually for the first time due to the COVID-19 pandemic and public health directives aimed at limiting its spread.

“The Fonds’ last financial year was marked by two diametrically opposed periods. During the first nine months, the economy was in full swing and Québec continued to build on the momentum of recent years. This boom then came to a screeching halt when COVID-19 hit. But this is not the first time the Fonds has had to deal with a crisis. Throughout the year, before and after the start of the pandemic, the Fonds has shown that it plays a key role in the Québec economy,” said Fonds Chairman Claude Séguin at the start of the AGM.

“Overnight, the economy came to a stop, weakening many companies and their workers. We quickly adjusted to meet the needs of our savers and to support our partner companies,” said Gaétan Morin, President and Chief Executive Officer of the Fonds.

“These are tough times, to say the least. But Québec has many strengths to help it meet the challenges that lie ahead. It’s up to us to build the future we believe in and to invest in a better society. The Fonds will be there to help Québec realize its dreams of an ever more prosperous, greener society. With assets of nearly $13.8 billion as of May 31, the Fonds is solid and committed to supporting the economy and jobs,” added Mr. Morin.

Record investments

Taking into account the additional financing provided to companies in response to the pandemic, the Fonds invested a total of $1.4 billion in the Québec economy during the fiscal year ended May 31, 2020, or 40% more than originally planned.

The Fonds also acted quickly to ensure that its partner companies had the financial leeway they needed to get through the crisis and save jobs. More than 1,300 of them have taken advantage of the offer to defer their loan payment for six months.

Share issues and redemptions

During the year, the Fonds issued $961 million in Class A shares, a new record. The organization welcomed more than 46,000 new shareholders, of which 61% are under age 40 and 18% under age 25. Automatic saving through payroll deduction or automatic bank withdrawals accounted for 79% of inflows ($759 million).

During the same period, the Fonds received $3 billion in redemption requests. Thanks to its solid financial position and prudent liquidity management, the Fonds can meet the needs of its shareholders in difficult times. The decrease in assets under management in the second half of the year is explained primarily by the sharp increase in redemption requests.

“We would like to express our gratitude to all the people who have placed their trust in the Fonds over the years. Thanks to their support, we’ve been able to deliver on our mission, and we’re proud to give them back their savings along with the gains they’ve realized over the years,” said Gaétan Morin.

The 2020 Operations and Sustainability Report is available on the Fonds’ website here.

About the Fonds de solidarité FTQ

The Fonds de solidarité FTQ is a capital development fund that channels the savings of Quebecers into investments. With net assets of $13.8 billion as at May 31, 2020, the Fonds has helped create and protect 221,267 jobs. The Fonds has 3,329 partner companies and 707,935 shareholders-savers.

SOURCE Fonds de solidarité FTQ

For further information: For media representatives only: Patrick McQuilken, Senior Advisor, Media Relations and Communications, Fonds de solidarité FTQ, Mobile: 514 703-5587, Email: [email protected]

Related Links

www.fondsftq.com

Let’s block ads! (Why?)



Source link

Continue Reading

Trending