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IMF says too soon to quantify impact of coronavirus on China's economy – National Post

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WASHINGTON — The International Monetary Fund said on Thursday it is closely monitoring China’s coronavirus outbreak, but it is too soon to quantify the potential economic impact there of the virus, which is halting tourism and commerce throughout the country.

IMF spokesman Gerry Rice told a regular news briefing that the direct impact on consumer and business demand had been most severe in Hubei Province, the outbreak’s epicenter, and the extent of the impact depends on how quickly the virus subsides.

Rice added that China has enough fiscal space to support its economy though the crisis if necessary and ensure that households and businesses have access to credit.

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“We’ve seen the direct impacts, mostly on demand as people have stayed home in China and what is usually a busy retail and tourism season has essentially come to a halt,” Rice said. “At the same time, on the supply side, there have been production stoppages, transport delays and frictions and workers staying home.”

Rice said the outbreak was having an indirect impact on market confidence and business uncertainty, which has hurt equity and bond markets elsewhere, with Chinese markets closed for the Lunar New Year holiday.

“How large the impact will be exactly is hard to tell at this point,” Rice said, adding that so far it has been most severe in Hubei Province, which represents about 4.5% of Chinese economic output.

But transport restrictions could impact sales and economic activity throughout China, Rice said.

The IMF’s assessment appeared cautious compared to those from some private economists and companies. One Chinese economist has estimated that China’s growth would be reduced by as much as a percentage point this year. (Reporting by David Lawder Editing by Chizu Nomiyama and Jonathan Oatis)

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No, Britain’s Economy Isn’t On The Rocks. – Forbes

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How bad is Britain’s economy?

It depends on what you read.

For instance, the Atlantic magazine headlined a recent feature “How the U.K. Became One of the Poorest Countries in Western Europe.”

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The features continues with the following: “The U.K. is now an object lesson for other countries dealing with a dark triad of deindustrialization, degrowth, and denigration of foreigners.”

In other words, the Atlantic has some pretty brutal thoughts on the U.K.’s economy.

Unfortunately, none of that reflects the reality I have lived and the economic data.

Let’s start with some basics.

UK Post-pandemic Growth Shines

First up is inflation-adjusted GDP since the beginning of 2021. In that case, the UK leads the pack of the three largest European economies. It grew 7.4% last year following by 3.6% this year, according to data from the International Monetary Fund.

Contrast that with France which grew 6.8% last year and 2.5% this year, then Germany which limped along at 2.6% in 2021 and 1.5% so far this year.

It shouldn’t take a PhD in mathematics to see that the UK is growing faster than the others over that period. Its not a huge difference in the case of France, but still its not like Britain is a basket case.

Fewer Jobless

UK unemployment is also far lower than either France or Germany. Britain’s jobless rate is a mere 3.6%, according to TradingEconomics. That compares with 5.5% and 7.3% for Germany and France respectively.

Some observers say the UK’s rate is so low because many people have stopped looking for work. Its a fair point, but only at the margin. In other words, its a relatively small issue. People who aren’t looking for work can hardly be unemployed. Second, if the UK rate was adjusted for the lower participation its hard to see the jobless figures jump to the current levels in France or Germany.

Modest Debt

Despite claims to the contrary that cutting taxes would send an already-indebted country into economic oblivion, the U.K. could probably afford to borrow bit more cash.

That’s because there’s massive hole in the assertion that Britain is in hock up to its eyeballs, its plainly wrong, especially compared to other rich countries.

The UK’s debt-to-GDP ratio is around 97%, again according to TradingEconomics. However, for France the figure is 113%, and the U.S. is 137%. Germany stands out at 69%.

In other words, the U.S. (generally considered to be a strong economy,) and France (a bedrock economy of the European Union) are much more in debt than Britain and yet observers seem excited to bash the U.K. like it was going out of fashion.

Germany does have a better debt ratio, but it is also a country that spends proportionately far less on defense than the other comparison countries. That’s something that the world has scrutinized closely since the invasion of Ukraine on February 24.

Illegal Migrants

However, perhaps the trump card in demonstrating the strength of the UK’s economy is the wave of illegal migration into the country.

Wave may understate the matter.

Its more of a tsunami.

This year so far more than 40,000 people have made the life-threatening journey across the channel from France to England. That’s up from less than 30,000 last year, and under 10,000 in 2020. Many of the people who make that journey get granted refugee status.

When considering this information its important to understand that migrants are leaving a democratic country will at top notch record on human rights and with a strong economy. Its also worth remembering that France has better weather than the U.K., and finer food.

It’s the Economy, Stupid

So why would so many people risk their lives crossing by far the world’s busiest shipping lane at night in a rubber dinghy to get to Britain? People can and do die on that trip with banal regularity.

Maybe they really do like the abundant grey skies, and drizzle that the country has to offer. Perhaps they really like British food in the way a native enjoys them.

But what about this: There’s a chance that the U.K.’s market driven economy is attractive to people in a similar way that America is attractive to migrants of all types.

On top of that, the Atlantic is wrong about Britons not liking foreigners. In fact, the U.K. population embraces people from all over the world.

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India's Economic Ascendance Might Just Happen This Time: New Economy Saturday – Bloomberg

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India’s Economic Ascendance Might Just Happen This Time: New Economy Saturday  Bloomberg



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Your Weekend Reading: A Global Economy Awash With Mixed Signals – Bloomberg

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Your Weekend Reading: A Global Economy Awash With Mixed Signals  Bloomberg



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