ZURICH (Reuters) – Switzerland’s economy could lose more than $100 billion in output due to the fallout from the coronavirus pandemic, the government said on Tuesday.
The government expects 2020 gross domestic product (GDP) to be around 652 billion Swiss francs ($687.26 billion), down from its December forecast for 712 billion francs. For 2021 it now expects a figure of 688 billion francs, down from the previous view of 725 billion francs.
“On a per capita basis the downturn is going to be as bad as the mid-1970s, if not worse,” said government economist Ronald Indergand. “It is going to take years to get over this. The economy is only going to get back to its previous level by 2022.”
He was speaking after the State Secretariat for Economic Affairs forecast a 6.2% decline for the economy during 2020, before a moderate recovery in 2021.
Indergand said the impact of the coronavirus on Switzerland’s export-orientated economy could take longer to be fully overcome, as unemployment rises and trade stutters due to a slowdown in other countries.
“Government debt will rise, and company and household debt will also rise which might reduce spending and economic growth,” he told Reuters.
“There is still also the risk of a second wave of COVID-19, and how this can be contained. This could have very negative consequences for the economy and significantly slow the recovery,” he added.
(Reporting by John Revill; Editing by Michael Shields)
Coronavirus: NI economy 'declining at a much slower rate' – BBC News
Economic output in Northern Ireland continued to decline in June but at a much slower rate, an Ulster Bank survey has suggested.
The bank conducts a monthly survey of a representative sample of about 200 firms.
In April and May the survey had its worst ever results as lockdown forced many businesses to temporarily close.
The June survey suggested manufacturing returned to growth while other sectors saw less dramatic falls in output.
Ulster Bank chief economist Richard Ramsey said there were signs of an improving trend as the lockdown eases.
“April, the first full month of lockdown, marked the all-time low with rates of decline in output easing in May,” he said.
“A loosening in the lockdown restrictions in June has seen this trend continue. Indeed, last month was the first time in eight months that any sector returned to growth.”
Every month, the bank asks businesses about things such as new orders, exports and staffing.
This is used to create a numerical index with readings of more than 50 indicating expansion and under 50 indicating contraction.
In April, the headline seasonally-adjusted business activity index was just 8.3, the May figure was 18.9 while the June figure was 42.6.
Some analysts suggest that the reliability of these types of surveys have been impacted by the extreme economic conditions caused by the pandemic.
The survey respondents are supposed to reflect how business conditions have changed compared to the previous month.
As parts of the economy reopen this should show strongly positive results as sectors like non-essential retail go from no activity to some activity.
However results which point to continuing declines in activity, even after reopenings, suggest that some respondents are instead making a comparison with pre-pandemic levels of business activity.
Long-term strategies to control COVID-19 must treat health and economy as equally important – EurekAlert
Strategies for the safe reopening of low and middle-income countries (LMICs) from months of strict social distancing in response to the ongoing COVID-19 pandemic must recognise that preserving people’s health is as important as reviving the economy, argue an international team of researchers.
The team also say that strategies need to be based on local epidemic growth rate at the time, social and economic costs, existing health systems capabilities and detailed plans to implement and sustain the strategy.
The COVID-19 pandemic has been responsible for over half a million deaths globally. Many LMICs responded to the pandemic by introducing a number of measures from physical distancing to strict social distancing.
These measures have proved relatively successful in containing the disease and limiting the number of deaths in places where the risk of transmission is high, public health systems and usage are suboptimal and awareness of disease prevention practices is low. However, they have often come with tremendous negative social, economic and psychological effects.
To prevent further negative impacts of lockdown, many countries are now looking to ‘reopen’, risking population health, especially given shortcomings in surveillance infrastructure and poor diagnostic capabilities.
In a paper published in the European Journal of Epidemiology, a team of epidemiologists from the University of Cambridge, the University of Bern, BRAC University and the National Heart Foundation in Bangladesh, have examined three community-based exit strategies, and recommend their scopes, limitations and the appropriate application in the LMICs.
Dr Rajiv Chowdhury from the University of Cambridge, lead author of the paper, said: “Successfully re-opening a country requires consideration of both the economic and social costs. Governments should approach these options with a mind-set that health and economy both are equally important to protect – reviving the economy should not take priority over preserving people’s health.”
The three approaches considered are:
Sustained ‘mitigation-only’ approaches such as those adopted in the United Kingdom, Switzerland and other European countries, involve basic prevention measures such as mask wearing, physical distancing and the isolation of positive cases after testing.
However, the researchers point out that the relative success and ease of implementation of these approaches in high-income settings was aided by a number of factors. For example, high-income countries have the capacity to implement mass testing, population surveillance and case isolation to contain the epidemic, in addition to a high number of trained contact tracers operating in a relatively small and sparse population and high levels of adherence to the measures, including home quarantine and hygiene advice.
By contrast, in LMICs, a sustained mitigation-only approach may be unfeasible due to poor or absent nationwide population surveillance, contact tracing, testing infrastructure and critical care. For example, LMICs generally have limited supply of ventilators (around 48,000 for India’s 1.3 billion people), personal protective equipment, trained healthcare personnel and safe working conditions, compromising the healthcare system’s effectiveness.
Zonal lockdowns involve identifying and ‘cordoning off’ new outbreak clusters with a high number of cases, keeping contact between zones low and containing the disease within a small geographic area.
However, the authors point out that any successful implementation of zonal lockdown requires regular data feedback operations in real time to identify hotspots, including information on newly confirmed cases, updated region-specific reproduction and growth rates, and deaths by age. This may be especially difficult to introduce in LMICs due to the absence of widespread population surveillance on random selections of the population and poor reporting and testing capabilities – for example, Pakistan conducts only 0.09 tests daily per 1,000 individuals compared to 0.52 in France.
Additionally, control of transmission within zones may be an enormous undertaking. In India, where this approach has been employed, the infection size within a cordoned zone can be as high as 100-200 times that outside the zone.
Countries seeking to introduce such measures should establish within the lockdown zone public health measures, including house-to-house surveillance and case-referral systems, and emergency services. They should also create buffer zones to reduce the rates of transmission from outside the zone. Such measures may only be effective when overall population transmission is relatively low and reducing.
Intermittent rolling lockdowns are now advocated by the World Health Organization in various LMICs. These involve implementing strict social distancing for a set number of days before a period of relaxation. Rolling lockdowns may be particularly useful in LMICs with dense populations, where this is a high potential for contact, weak health systems and poor contact tracing.
A modelling study published by the team in May showed that a system involving 50 days of strict lockdown followed by 30 days of relaxation, enabling the economy to ‘breathe’ and recuperate, could reduce the reproduction number to 0.5, reduce the strain on health systems and considerably reduce the number of deaths compared to a situation with no lockdown.
Professor Oscar Franco, of the University of Bern and senior author of the paper, said: “Rolling lockdowns need be flexible and tailored to the specific country. The frequency and duration of the lockdowns or relaxed periods should be determined by the country based on local circumstances. They don’t necessarily need to be nationwide – they can also involve a large zone or province with very high incidence of COVID-19.”
Dr Shammi Luhar of the University of Cambridge and co-author of the paper, added: “These three strategies should not be considered as one or the other. A country should further adapt and could combine them as needed.”
Chowdhury, R et al. Long-term strategies to control COVID-19 in low and middle-income countries: an options overview of non-pharmacological interventions; 13 July 2020
Jordan presses sweeping tax evasion crackdown to aid ailing economy – The Globe and Mail
Jordan’s Prime Minister Omar al-Razzaz promised on Sunday to deepen a crackdown on tax evasion that officials say has deprived the country’s cash-strapped economy of billions of dollars in revenue in recent years.
The government has gone after senior businessmen and former politicians suspected of tax dodging, money laundering and customs evasion in a weeks-long campaign that has gained greater urgency with the hit to state finances from the COVID-19 pandemic.
“Protecting public money and fighting corruption is a national duty,” Mr. al-Razzaz said in his weekly television address to the country.
Tax authorities have raided around 650 companies so far, sometimes accompanied by security forces, according to officials who say this is the biggest campaign to combat tax evasion in decades.
The government said it had frozen the assets of dozens of companies and businessmen on suspected tax evasion charges. It added that it would track offshore havens where wealthy Jordanians have long parked cash to avoid taxes.
Some critics have accused the government of using the campaign to carry out a witch hunt against its political enemies, including some of Jordan’s leading business figures, including former ministers and senior politicians.
Officials deny that, saying the goal is to ensure justice and that no one is above the law.
The government has been using its wider powers under a state of emergency since March to give prosecutors and the main anti-corruption agency greater powers, and stiffen penalties.
A two-month coronavirus lockdown has crippled Jordanian businesses and slashed state revenues by tens of millions of dollars, leading to the sharpest economic contraction in two decades.
The government expects the economy to shrink by 3.5 per cent this year, a far cry from an International Monetary Fund (IMF) estimate of 2-per-cent growth before the pandemic.
The aid-dependent country, already undertaking a tough three-year IMF reform program, tapped international debt markets this month to borrow US$1.75-billion.
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