ACROSS THE GLOBE


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Despite focused government intervention, Europe’s jobless have now surpassed 18 million in number during the past 35 days.
Figures show that as much as half of France’s labor force is idle and a third of workers in Ireland are off the job.
About 59 million jobs in the EU and U.K., or about 26 percent, are at risk of disappearing, according to McKinsey & Co. The company estimates that 54 million U.S. jobs could be on the chopping block.
Several European governments are funding large portions of workers’ salaries as long as companies keep the workers on their books as employed. The cost in France, Germany, and Spain alone could exceed €135 billion, which is more than $146 billion.
For example, the Timson Group, with about 2,000 stores across Britain offering services such as key-cutting and shoe repairs, has furloughed 5,300 of its 5,500 workers but government aid is paying their full salaries.
These interventions, however, may not outlast the economic damage the shutdown has done.
No one knows when consumers will once again be comfortable eating in restaurants or staying in hotels. A slow recovery in those industries could mean that neither companies nor governments will be able to marshal enough cash for the businesses to hang on long enough to return.
“There will be a structural shift” in people’s post-pandemic behavior, predicts Susan Lund, a McKinsey partner.
ASIA
Taiwan Avoids Economic Crisis

Taiwan, with a population of almost 24 million people, has confirmed only 420 cases of COVID-19 and six deaths even though it has left offices, restaurants, schools, and most entertainment venues open during the pandemic.
Although foreign tourists are absent, about 1.5 million Taiwanese flocked to the island’s 11 most popular resorts during a spring holiday.
Taiwan also is among the few developed countries expected to show positive economic growth this year. The government is forecasting a 1.92-percent expansion of its GDP in 2020, slightly less than the 2.57 percent growth last year.
Although some economists expect the reduction in the pace of growth to be more pronounced, none are forecasting the contraction that is expected to plague many developed economies this year.
Taiwan’s notable success in avoiding economic collapse is being attributed to closing its borders to other Chinese early in the epidemic, strict quarantine measures, health monitoring, and contact tracing, lessons the country learned from the 2003 SARS virus epidemic.
South Korea “At the Beginning Stage of a Crisis”

South Korea’s government has raised its economic rescue fund from $120 billion to $200 billion, aiming $70 billion of the new amount at small businesses, workers, and the nation’s hardest-hit industries.
“We are at the beginning stage of a crisis,” warned president Moon Jae-in. “A hiring freeze together with a corporate crisis is looming” and a “hiring shock like we have never experienced may be coming.”
The country’s export-based economy saw outbound shipments fall by a third in the first 20 days of this month.
The April export numbers foreshadow a second quarter’s economic performance that “will not be much better than the first quarter, even if domestic mobility recovers,” said Nguyen Trinh, an analyst at Nataxis bank.
Hong Kong, Japan, and Singapore also have announced record economic bailout plans, committing $287 billion, $1.09 trillion, and $63 billion respectively.
RUSSIA
 Russia Cuts Interest Rate, Forecasts Contraction

Russia’s central bank cuts its key interest rates by 50 basis points, or 0.5 percent, to 5.5 percent on 23 April, and projected a 4- to 6-percent economic contraction for this year.
The ruble weakened against the dollar by 0.8 percent after the cut was announced.
The virus pandemic is moving across the country but, more significant for Russia’s economy, the world’s oil market has collapsed and oil prices with it.
In mid-April, Russian oil producers were selling oil to Mediterranean markets at a price below $9 a barrel, the lowest in more than 20 years.
Russia’s government says it has enough cash reserves in its sovereign wealth fund to withstand five to six years of low oil prices without significant damage to its economy.
Still, the price collapse is especially dangerous for a country that, in recent years, has depended on oil for 16 percent of its GDP, 70 percent of its export revenue, and 52 percent of its national budget.
In announcing the rate cut, the Bank of Russia also said it sees the nation’s returning to growth, expanding by 2.8 to 4.8 percent in 2021 and 1.5 to 3.5 percent in 2022.
 AFRICA
South Africa Announces Stimulus, Seeks IMF Loan

Facing an unemployment rate of 30 percent and a looming hunger crisis, South Africa is launching a $26-billion stimulus program, equal to about a tenth of GDP.
For the first time, the nation also is seeking a loan from the IMF.
When South Africa locked down its economy in late March, the country already was weakened by years of corruption, stagnant growth, and rising debt that recently caused Moody’s to label its bonds as junk.
The lockdown crippled an informal economy of street vendors, tradespeople, and day laborers, many of which now have no work.
The finance ministry has predicted a 6-percent economic contraction this year, although some analysts expect the shrinkage to be worse.
The rescue measures will raise the nation’s debt even more sharply but “may also help to protect the economy from a deeper contraction,” said Razia Khan, chief African and Middle East economist at Standard Chartered Bank.
The government will refocus its current cash assistance program on the poorest South Africans and has promised a “risk-adjusted” reopening at an unspecified future time after the health crisis has passed.
 
 

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