And he added that while the precise impact is unclear, it could be “significant.”
Morneau gave the keynote address at a meeting of the Economic Club of Canada in Calgary, Alta., on Monday morning.
Coronavirus outbreak: China says death toll from illness has exceeded 900
In that speech, he addressed the ongoing outbreak, which has sickened 40,171, mostly in China, and killed roughly 908 others, surpassing the death toll from the 2003 SARS epidemic. Two deaths have been reported outside mainland China, while more than 20 countries, including Canada, have confirmed cases of infection.
“The virus is undoubtedly going to have an economic impact,” Morneau told attendees at the gathering, adding that he expects the outbreak will be a “central topic” at upcoming meetings of G20 finance ministers and central bankers later this month.
While he said “we can’t know what the economic impacts are right now,” Morneau said the impact will be felt across Canada on everything from declining tourism, dropping oil prices and supply chain challenges.
He also added that some estimates suggest the outbreak could cause a dip of roughly four per cent in global economic output in 2020.
“We need to keep that in the context of an economy, globally, that’s growing at around three per cent, so it’s a significant impact,” Morneau said.
He pointed in particular to impacts on supply chains and any business with close supply chain ties with China.
The city of Wuhan in Hubei province is considered the epicentre of the outbreak.
It is also an industrial region home to many factories making, among other things, automobiles and the crystal display screens used in products like televisions.
But the city itself has been on lockdown for weeks now, with its 11 million residents confined to their homes in an unprecedented quarantine.
Some 50 million others in surrounding cities are also facing heavy travel restrictions as Chinese officials grapple to contain the spread of the virus.
The Canadian government has evacuated roughly 211 citizens and permanent residents from Wuhan over recent days and is set to evacuate more on Monday.
Evacuees so far are being housed at the Canadian Forces Base Trenton, where they are to remain in quarantine for 14 days.
Parts of China are locked down as the coronavirus spreads. What does that mean for the global economy?
More to come.
© 2020 Global News, a division of Corus Entertainment Inc.
Bitcoin hovers near 6-month high on ETF hopes, inflation worries
Bitcoin hovered near a six-month high early on Monday on hopes that U.S. regulators would soon allow cryptocurrency exchange-traded funds (ETF) to trade, while global inflation worries also provided some support.
Bitcoin last stood at $62,359, near Friday’s six-month high of $62,944 and not far from its all-time high of $64,895 hit in April.
The U.S. Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading this week, Bloomberg News reported on Thursday, a move likely to lead to wider investment in digital assets.
Cryptocurrency players expect the approval of the first U.S. bitcoin ETF to trigger an influx of money from institutional players who cannot invest in digital coins at the moment.
Rising inflation worries also increased appetite for bitcoin, which is in limited supply, in contrast to the ample amount of currencies issued by central banks in recent years as monetary authorities printed money to stimulate their economies.
But some analysts noted that, after the recent rally, investors may sell bitcoin on the ETF news.
“The news of a suite of futures-tracking ETFs is not new to those following the space closely, and to many this is a step forward but not the game-changer that some are sensing,” said Chris Weston, head of research at Pepperstone in Melbourne, Australia.
“We’ve been excited by a spot ETF before, and this may need more work on the regulation front.”
(Reporting by Hideyuki Sano in Tokyo and Tom Westbrook in Singapore; Editing by Ana Nicolaci da Costa)
China’s plunging construction starts reminiscent of 2015 downturn
China’s September new construction starts slumped for a sixth straight month, the longest spate of monthly declines since 2015, as cash-strapped developers put a pause on projects in the wake of tighter regulations on borrowing.
New construction starts in September fell 13.54% from a year earlier, the third month of double-digit declines, according to Reuters calculations based on January-September data released by the National Bureau of Statistics on Monday.
That marks the longest downtrend since declines in March-August 2015, the last property malaise.
When the sector recovered in 2016 after authorities loosened their grip on purchases and development, tens of thousands of real estate firms borrowed heavily to build homes.
But as regulations tightened again this year, many of them have started to face a liquidity crunch, which was then worsened by sharply weaker demand due to tighter restrictions on speculative purchases.
Property sales by floor area dropped 15.8% in September, down for a third month, according to Reuters calculations based on the statistics bureau’s data.
The slowdown in the sector was also underscored by a 3.5% drop in property investments by developers in September, the first monthly decline since January-February last year at the height of the COVID-19 pandemic in China.
“All the data are poor,” said Zhang Dawei, chief analyst with property agency Centaline.
“Financing is hard, sales are tough, so of course, there has been no enthusiasm to build. For the first time in history, developers are encountering two blockages – blockages in sales and blockages in financing.”
The potential collapse of highly indebted real estate firms such as China Evergrande Group have raised concerns about systemic risks to the broader economy. The real estate sector accounts for a quarter of China’s gross domestic product.
Authorities will try to prevent problems at Evergrande from spreading to other real estate companies to avoid broader systemic risk, Yi Gang, governor of China’s central bank, said on Sunday.
On Friday, a central bank official said the spillover effect of Evergrande’s debt problems on the banking system was “controllable.”
“There is a likelihood that housing policies may loosen in the fourth quarter, and that would ease the pessimism in the property transaction data,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.
On Friday, representatives from 10 Chinese Property Companies met government regulators to ask for an “appropriate loosening” on policy restrictions, financial news outlet Yicai reported.
China’s real estate shares have fallen 22% so far this year. On Monday, they were down 2.6% as of 0300 GMT.
In the first nine months, property investment rose 8.8% from a year earlier, slowing from 10.9% growth seen in January-August.
Funds raised by China’s property developers grew 11.1%, slower than the 14.8% rise seen in the first eight months.
(Editing by Jacqueline Wong)
Saks Fifth Avenue ecommerce unit aims for IPO at $6 billion valuation – WSJ
The ecommerce business of luxury department store Saks OFF 5TH is preparing for an initial public offering and targeting a $6 billion valuation, the Wall Street Journal reported Sunday, citing sources.
The company is interviewing potential underwriters this week for an IPO that could take place in the first half of next year, according to the report.
(Reporting by Sheila Dang; Editing by Daniel Wallis)
How many lives have coronavirus vaccines saved? We used state data on deaths and vaccination rates to find out – Devdiscourse
Marlene Dumas: The art exposing the evil in the ordinary – BBC News
The new resurgence in tablet art – ArtsHub
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Iran anticipates renewed protests amid social media shutdown
Media20 hours ago
'Don't squish them': Photos on social media show slimy, sticky salamanders in Labrador – CBC.ca
Business18 hours ago
Bank of England will have to act to contain inflation – Bailey
News18 hours ago
No end in sight to volcanic eruption on Spain’s La Palma – Canaries president
Business17 hours ago
Netflix’s ‘Squid Game’ estimated to be worth about $900 million – Bloomberg News
Investment20 hours ago
Turkey's Erdogan says U.S. proposed F-16 sales in return for its F-35 investment – Reuters
Business20 hours ago
UPDATE: U.S. expected to reopen border November 8, mixed doses eligible – BlackburnNews.com
Science22 hours ago
NASA launches first space probe to study Jupiter's Trojan asteroids – Ottawa Citizen
News18 hours ago
China condemns U.S., Canada for sending warships through Taiwan Strait