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New Zealand says can manage coronavirus impact on economy – TheChronicleHerald.ca

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WELLINGTON (Reuters) – A coronavirus epidemic will have an “inevitable” impact on New Zealand’s economic growth, Prime Minister Jacinda Ardern said on Monday, but added that the effect would be manageable, even though it was too early to say how big it would be.

Travel and work curbs prompted by the outbreak, which has killed more than 900 people in China and sparked a global health emergency, are putting the squeeze on New Zealand firms doing business in the world’s second-biggest economy.

“Already we are seeing China reflect in some of their projections that they will have an impact,” Ardern told a news conference.

“Because we are seeing a global impact, inevitably we will see an impact here.”

New Zealand exporters of meat, dairy, timber and seafood have faced cancellations in China, the country’s biggest trading partner, which accounts for the majority of its sales of food products and in the tourism and services sector.

It was too early to say how big the impact would be, Ardern said, adding that the government is working with the tourism and education sectors, as well as traders, to limit the fallout.

“There will be implications for us economically….of that I have no question,” she said. “It will have an impact on our GDP figures.”

She added, “But it is something we can manage.”

The economy grew at an annual rate of 2.9% last year, slightly below expectations, as demand was partly hurt by a trade war between the United States and China.

New Zealand’s central bank is expected to hold rates at record lows of 1.0% at a policy review on Wednesday, but an easing could come soon, prompted in part by the epidemic.

Australian bank Westpac has said New Zealand’s first-quarter gross domestic product will be 0.6% lower than previously thought, due to the virus impact, assuming a two-month ban on travel and one month of disruption in China’s factories.

New Zealand has had no confirmed cases of virus infections.

(Reporting by Praveen Menon; Editing by Clarence Fernandez)

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Brazil economic activity much brisker than expected in June – Financial Post

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BRASILIA — Economic activity in Brazil rose more than expected in June, a central bank index showed on Monday, contributing to a second-quarter rally helped by a service sector rebound following the impact of the COVID-19 pandemic.

The IBC-Br economic activity index, a leading indicator of gross domestic product, rose a seasonally adjusted 0.69% in June from May, much higher than the 0.25% growth expected by economists, according to a Reuters poll.

In the second quarter, activity increased 0.57% over the previous quarter.

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The IBC-Br index was up 3.09% on a non-seasonally adjusted basis from June 2021, while in the 12 months through June it grew 2.18%, the central bank said.

Official GDP figures will be released by the statistics agency IBGE on Sept. 1.

Economy Minister Paulo Guedes recently estimated that the economy will grow above 2% this year, driven by the strength of the labor market and the normalization of economic activities that have suffered during the pandemic, with an emphasis on the services sector.

Meanwhile, private economists who started the year projecting a 0.3% rise in GDP in 2022 are now expecting 2% growth, according to a weekly central bank survey.

After the IBC-Br figures, Bank of America revised its GDP growth forecast to 2.5% from 1.5% previously, saying activity data was surprising on the upside as the service sector remained strong.

“Increase in social transfers and tax cuts should cushion the slowdown in the second half,” wrote David Beker, head of Brazil Economics at BofA.

For the second half, analysts had expected a slowdown amid aggressive monetary tightening led by the central bank to tame inflation, which has already pushed interest rates to 13.75% from a record low of 2% in March 2021. (Reporting by Marcela Ayres; Editing by Steven Grattan, Hugh Lawson and Rosalba O’Brien)

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Chinese Households’ Pivot to Thriftiness Is Bad News for World Economy – Bloomberg

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Chinese Households’ Pivot to Thriftiness Is Bad News for World Economy  Bloomberg



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Japan’s economy rebounds from COVID, growing 2.2 percent in Q2 – Al Jazeera English

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Growth driven by rise in private consumption following the lifting of pandemic curbs in March.

Japan’s economy grew an annualised 2.2 percent in the second quarter, as robust private consumption provided a boost to the country’s long-delayed recovery from the COVID-19 pandemic.

The relatively strong economic data released on Monday comes after gross domestic product (GDP) grew just 0.1 percent during the January-March period.

The growth was driven largely by a 1.1 percent rise in private consumption, which accounts for more than half of Japan’s GDP, as dining out, leisure and travel rebounded following the lifting of pandemic curbs in March.

The latest results mean Japan’s 542.12 trillion yen ($4.07 trillion) economy is now larger than it was before the pandemic hit.

The world’s third-largest economy, however, still faces an uncertain road to recovery amid slowing global growth and rising inflation, supply chain constraints, a weakening yen, and a resurgence in domestic COVID-19 infections, which have topped 200,000 daily cases in recent weeks.

In July, the International Monetary Fund cut Japan’s growth outlook for 2022 to 1.7 percent, down from 2.4 percent in April.

Japan’s economic recovery from the pandemic has lagged other countries due to weak consumption, which has been exacerbated by ongoing border controls and domestic pandemic restrictions that continued until March.

The weak recovery has turned the Bank of Japan into a global outlier, with it sticking to an ultra-loose monetary policy as other central banks raise rates to tame rising inflation.

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