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Indian economy projected to contract 11.8% year-on-year, Fitch domestic arm says – TheChronicleHerald.ca

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NEW DELHI (Reuters) – India’s economy is projected to contract 11.8% on the year in the current fiscal year beginning from April, before bouncing back in the next fiscal year, India Ratings and Research, a domestic arm of ratings agency Fitch, said on Tuesday.

“All indicators, be it mobility or consumption, are pointing towards a much weaker economic recovery,” Sunil Kumar Sinha, its principal economist told an online conference.

The economy is projected to contract 11.9% in the current quarter, followed by a contraction of 6.7% in the December quarter and 5.4% in the subsequent quarter, Sinha said, citing the adverse impact of coronavirus pandemic.

Earlier, India Ratings had projected the economy would contract 5.3% in the current fiscal year, versus growth of 4.2% in the previous year.

While a second wave of infections sweeps the globe, India has not yet managed to flatten the first wave, he said.

Its economy shrank 23.9% in the quarter from April to June, much more than forecast, in a sign that recovery could be longer than expected, with analysts urging further stimulus.

On Monday, India surpassed Brazil as the nation with the largest number of infections outside the United States, with a tally of 4.28 million.

India Ratings projected the federal fiscal deficit to rise to 8.2% of GDP, propelled by an economic contraction and greater government spending to mitigate the pandemic effects, versus 4.6% in the previous fiscal year.

(Reporting by Manoj Kumar; Editing by Clarence Fernandez)

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Bangladesh economy shows early signs of pandemic recovery – News 1130

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DHAKA, Bangladesh — A rebound in garment orders after demand crashed during spring shutdowns is helping to revive the Bangladesh economy.

Apparel makers, the country’s main export industry, say they are looking ahead to Christmas orders from the U.S. and other major markets.

Remittances from Bangladeshi workers employed overseas have also recovered, helping to relieve pressures from a pandemic quasi-shutdown during the spring.

The Asian Development Bank reported this week that the economic comeback was encouraging. It is forecasting the economy will grow at a robust 6.8% annual pace in the fiscal year that ends in June if current conditions persist.

That’s a much brighter outlook than in April-May, when global clothing brands suspended or cancelled orders worth more than $3 billion, affecting about 4 million workers and thousands of factories.

“At the moment we can say that the ready-made garment industry has been able to regain its growth trajectory upward compared to March-May,” Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, or BGMEA, told The Associated Press.

“As economies in the West were turning around we were successfully able to get the buyers back to the negotiating table, which is why 80% to 90% of the $3.18 billion in cancelled orders have been reinstated,” she said.

Bangladesh earns about $35 billion annually from garment exports, mainly to the United States and Europe. The industry is the world’s second largest after China’s.

Bangladesh’s exports rose 0.6% to $3.9 billion in July, after plummeting 83% to $520 million in April. Imports, which are reported on a quarterly basis, began recovering earlier, rising 36% in May-June.

In August, exports rose 4.3% from a year earlier, to $2.96 billion, mostly driven by apparel shipments, according to the government’s Export Promotion Bureau. Garment shipments totalled $5.7 billion in July and August.

“The garment sector is making a good comeback. Our agriculture is doing well. Remittances are coming. These all are good signs for the economy,” said Ahsan H. Mansur, executive director of the Policy Research Institute, a think-tank in Dhaka.

“The pace of the recovery is clearly visible. But challenges have been there too. The pace of the recovery will depend on how the pandemic behaves in the West over the next few months,” Mansur said.

That’s the inestimable question facing everyone.

As of Thursday, Bangladesh had reported more than 342,000 confirmed coronavirus infections and 4,823 deaths. The country confirmed its first positive case on March 8.

Some experts say the actual number of infections is higher than the official count. The garment industry says few workers in its factories have fallen ill thanks to precautions such as employing fewer people on the production lines and imposing safety guidelines. The government imposed a nationwide lockdown on March 26, and the garments sector was closed for nearly three months, reopening only gradually.

The country director for the ADB, Manmohan Parkash, said the government has managed the crisis well, “with appropriate economic stimulus and social protection measures.”

“We are encouraged by the increase in exports and remittances, and hope the recovery will be sustained, which will help in achieving the projected growth rate,” Parkash said.

Julhas Alam, The Associated Press

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Asia defies Wall Street weakness but economy, election worries cap gains – TheChronicleHerald.ca

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By Tom Westbrook and John McCrank

SINGAPORE/NEW YORK (Reuters) – Asian stocks inched up on Friday, despite Wall Street declines, but struggled to make deeper gains as worries about a faltering economic recovery kept investors to the sidelines or seeking safer harbour in assets such as the Japanese yen.

Oil prices held hefty overnight gains after OPEC flagged a crackdown on member states that did not cut output and the dollar was back to nursing losses after a brief journey higher in the wake of Wednesday’s Federal Reserve meeting.

MSCI’s broadest index of Asia-Pacific shares outside Japan looked set to end the week 1% ahead following two weeks of tech-led losses. It rose 0.2% on the day while market moves around the region were small.

Japan’s Nikkei edged 0.1% higher. The ASX 200 was flat, while stocks in Shanghai, Hong Kong and Seoul rose between 0.2% and 0.4%.

U.S. stock futures were soft, with S&P 500 futures down 0.2%, though Nasdaq 100 futures turned positive by the middle of the Asia session to trade 0.07% higher.

“The bigger picture issue is that markets, particularly growth and tech stocks, have run very hard into the end of August, which has left them somewhat vulnerable,” said AMP Capital chief economist Shane Oliver.

“There’s uncertainty ahead of the U.S. elections…China-U.S. tensions keep creeping in and on top of that there’s now uncertainty about how the recovery will proceed from here in the absence of more stimulus in the U.S.”

Overnight data showed recovery in the U.S. labour market stalling and Wall Street indexes fell for a second straight session amid disappointment that the Fed made no new monetary easing commitments at its meeting this week.

The S&P 500 ended down 0.84%, and the Nasdaq dropped 1.27%. The Nasdaq’s losses put the index down roughly 10% from a record high hit early in September and have it tracking for its worst month since March.

“Unlike June, there is more fear of a deeper correction,” analysts at Singapore’s DBS Bank said in a note – since the Nasdaq is below its 50-day moving average, a key technical support level, and the U.S. election is fast approaching.

“The landscape is more challenging compared to three months ago.”

YEN RALLIES

In contrast to the Fed, the Bank of England made clear overnight that it is open to further aggressive easing and is looking closely at taking interest rates negative.

That dovish tone sent the pound sharply lower before it recovered as the dollar weakened in the New York session. [FRX/]

The Japanese yen also rose overnight, shrugging off a dovish-sounding Bank of Japan to ride a softer greenback and a safety bid to a seven-week peak of 104.52 per dollar. It held there on Friday, though some traders think it can rise further.

“The relative balance sheet trend between the Bank of Japan and Fed can contribute to downside pressure on dollar/yen,” said Commonwealth Bank of Australia currency analyst Joe Capurso.

In commodity markets, oil held sharp gains after OPEC and its allies said the group will take action on members that are not complying with deep output cuts. [O/R]

Brent crude futures were last 0.2% firmer at $43.39 a barrel and U.S. crude futures rose by the same margin to $41.04 a barrel.

U.S. Treasuries picked up where they left off, with yields on 10-year U.S. government debt at 0.6838% after concerns about possible inflation rises in the future helped reverse a bond rally in overnight trade. [US/]

Later on Wednesday, U.S. consumer confidence data is due and Fed board member James Bullard is to make a speech on the challenges of the COVID-19 recovery, both at 1400 GMT.

(Reporting by Tom Westbrook in Singapore and John McCrank in New York; Editing by Sam Holmes)

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Here's how B.C. will spend $1.5 billion to help the economy recover amid the pandemic – CTV News Vancouver

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VANCOUVER —
With B.C. facing a multi-billion-dollar deficit because of the COVID-19 pandemic, the premier and finance minister announced Thursday how the provincial government will spend $1.5 billion to help the economy recover.

In a news conference, John Horgan and Carole James explained the government’s plan to divide the recovery funding that was set aside in the province’s $8.25 billion pandemic response.

CTVNewsVancouver.ca is streaming the news conference LIVE NOW.

“Lives have been saved because of the sacrifices of British Columbians,” Horgan said Thursday.

“The pandemic continues to challenge us in unprecedented ways, but fundamental priorities remain the same. We need to protect people’s health, we need to keep the economy open safely and we need to support communities.”

Horgan said the economic recovery plan was built based on consultation with individuals, groups and communities.

“There was no government that had a playbook for how to deal with a global pandemic,” he said. “And when you’re building a plan for people, you have to talk to them.”

Some of the funds – about $400 million of it – is earmarked to help businesses recover with initiatives that include recovery grants for small and medium-sized businesses and a tourism task force. That task force will come up with recommendations on how tourism in B.C. can prepare for the 2021 season.

About $375 million will be distributed to communities to help local governments provide services and complete some infrastructure, like projects that are shovel-ready and initiatives to improve active transportation.

“The safe restart funds will help us address local challenges that have been made worse by COVID-19,” Horgan said. 

More than $460 million is set aside for “recovery for people,” the finance ministry says, which includes previously announced funding for more health-care jobs and skills training.

The remaining $250 million is set aside for “building a better future,” which includes funding for clean energy innovation, recycled plastics manufacturing and some supports for the forestry industry.

The finance ministry also announced new tax recovery measures, totalling $660 million outside the $1.5 billion. More than a third of that covers a PST rebate for some businesses looking to invest in machinery, while the remainder is an employment incentive to encourage businesses to increase their payrolls.

Last week, James revealed that, because of COVID-19, B.C. is on track to see a $12.8-billion deficit this fiscal year.

“Our recovery, of course, will not happen overnight,” Horgan said.

“There’s a long road ahead of us and it will require a constant opportunity for us to adapt and innovate to changing circumstances.”

This is a developing story. Check back for updates.  

Detailed list: Economic recovery plan (part 2)

Graphics from the Government of British Columbia

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