Economic impact of Covid-19

German tourist companies asked Merkel to give them permission to stop refunding people and to make already paid amounts for travel as a debt people would use when covid danger is off.
 
China is now the single largest owners of US treasury with 1.18 trillion holding surpassing Japan.
 
The economics team at Nomura have slashed their forecast for the global economy this year, again.

They now expect world GDP to shrunk by 4% during 2020 -- with major economies including the UK contracting by over 10% in April-June (a really grim, and highly credible, forecast)

We have slashed our 2020 forecast of global GDP growth to -4.0% and now expect %q-o-q saar growth in Q2 of -42% in the US, -43% in the euro area and -44% in the UK - all similar to that in Chinain Q1.

[SAAR = seasonally adjusted annual rate, ie how much an economy would change if one quarter was extended over a year]

In a best case scenario, Nomura reckon the world economy would only shrink by 2.2% -- but in a bad outcome, it could slump by 6.9%.

In the good scenario, the virus is quickly beaten through strict compliance with social distancing, technological innovations and medical breakthroughs. The result is still a short, deep recession, but it is followed by a sustained recovery.

In the bad scenario, the virus beats us. The intravenous cash flow support policies do not last long enough to save companies and jobs. The result is a large, permanent loss in output featuring persistently high unemployment, company liquidations and financial crise.
 

Fitch cuts UK credit rating to AA-

The ratings agency Fitch has cut Britain’s sovereign debt rating to AA-, saying debt levels will jump as the government ramps up its spending to offset the near shutdown of the economy in the face of coronavirus.

Fitch downgraded the country by one notch to the same level as its rating for Belgium and the Czech Republic. It said a further cut could follow as it kept the rating on negative outlook.

“The downgrade reflects a significant weakening of the UK’s public finances caused by the impact of the Covid-19 outbreak and a fiscal loosening stance that was instigated before the scale of the crisis became apparent,” Fitch said. “The downgrade also reflects the deep near-term damage to the UK economy caused by the coronavirus outbreak and the lingering uncertainty regarding the post-Brexit UK-EU trade relationship.”

Fitch said the coronavirus shutdown was likely to shrink Britain’s economy by nearly 4% in 2020, assuming the drastic containment measures could be relaxed in the second half of the year, leading to a 3% bounce in growth in 2021. But doubts about Britain’s future trading ties with the European Union posed a further risk, Fitch said.
 
We need new shoes for my youngest. Was just going to buy online (sports direct) but with the lockdown would they even deliver? Is it just the shops that are closed or warehouses and shipping too?
 
Genuine question. What has the EU done or said in all of this?
Was talking with an mate who’s father and family were from Bergamo and he was telling me about the devastation there but also that the Italians feel alone no support from anybody and the contempt towards EU will linger a long time in Italy.

The EU wasn’t popular in Bergamo before this. I’ve been going a couple of times a year for the last few years.

The only thing I’ve read is that the EU are doing joint purchasing of ventilators and PPE that we opted out of on political grounds. From what I’ve seen on social media, it isn’t the UK and the States whose initial responses to the Pandemic were the biggest laughing stocks. I think we’ve been pulling out all the stops in recent days though. (Health is primarily the responsibility of member states as another poster explained).

I don’t see Coronavirus deaths any different whether they are in Bergamo or Birmingham. It’s not the time for politics or recriminations other the focus needing to be 100 percent on tackling the virus.
 
Interesting to see how this pans out for Brexit. I doubt preparations to leave are making any progress for the foreseeable , so an extension would seem sensible and remain may even be back on the table after all this. Having said that, it's equally likely that the financial fall out from covid could be the final nail in the coffin of EU financial structures and the whole thing could disintegrate.
 

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