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The coronavirus outbreak could leave the world economy in its worst state since the global financial crisis, with economic activity tipped to shrink through the first quarter of the year as manufacturing and travel falters.

“With the International Energy Agency (IEA) predicting the first drop in global oil demand in a decade, analysts downgraded their expectations for the global economy as the fallout from the virus becomes clearer…

“Capital Economics believes global GDP will shrink by 1 per cent annualised through the start of 2020. It would be the first global economic contraction since the first quarter of 2009, which was during the depths of the GFC.”

https://www.brisbanetimes.com.au/politics/federal/global-economic-impact-of-virus-approaching-gfc-levels-20200214-p540s4.html


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The coronavirus outbreak is causing travel demand across the whole Asia Pacific region to slump, data showed on Thursday…

“ForwardKeys, a travel analytic company, said that airline bookings from across the region were 10.5% lower for March and April 2020 compared with last year. That drop excludes trips to and from China and Hong Kong.”

https://uk.reuters.com/article/uk-china-health-travel-data/coronavirus-travel-slowdown-spreads-from-china-across-asia-study-idUKKBN207107


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Japan – the world’s third largest economy – was contracting before the coronavirus outbreak:

“BoJ Executive Director Director Eiji Maeda said Japan’s economy have suffered a “big contraction” in Q4 due to sales tax hike and sluggish global demand.”

https://www.actionforex.com/live-comments/271805-boj-maeda-economy-suffered-big-contraction-in-q4/


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“‘Thousands of [Australian] businesses have had a horror start to the year with drought, bushfires and floods,’ she said today…

Now the coronavirus is having a severe impact on both their ability to create products and also export them to markets overseas.”

https://www.dailymail.co.uk/news/article-8002497/How-coronavirus-plunge-Australia-recession-spark-40-cent-house-price-plummet.html


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“The true economic toll of the coronavirus outbreak on China’s floundering economy will most likely be a closely guarded state secret. The world’s factory has shut up shop and the disruption is reverberating through global supply chains.

Many economists believe that China is suffering an “unprecedented” contraction – but Beijing will never admit it.”

https://www.telegraph.co.uk/business/2020/02/13/coronavirus-havoc-could-push-china-secret-recession/


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In Dubai, the shopping malls and expat bars are as crowded as ever, but the economic outlook is not as sunny as the weather outside. Jobs figures are at their weakest for a decade, the low point of the financial crisis, as the city’s debts continue to bite.

“In Saudi Arabia, meanwhile, the reform plans of the “ambitious” crown prince, Mohammed bin Salman, show signs of coming off the rails.”

https://www.thetimes.co.uk/edition/world/when-will-the-gulf-go-bust-wtjjhscf0


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Europe is stuck in a rut and it’s getting dangerous. Monetary policy is looser than it’s ever been and there’s little chance it will tighten any time soon. Is helicopter money the way out?

“If growth slows suddenly due to, for example, the coronavirus… there will be calls for more monetary easing.”

https://www.euromoney.com/article/b1kb4z04mn14gl/ecb-helicopter-money-could-lift-the-mood-in-europe


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Germany is the world’s fourth largest economy:

Germany entered 2020 with a flatlining economy and manufacturers in distress, leaving it ill prepared for continued trade uncertainty and the new coronavirus threat.”

https://www.bloomberg.com/news/articles/2020-02-14/germany-avoids-contraction-but-remains-in-weakened-position


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Exuberant equity markets have been telling one story since the coronavirus first escaped control in Wuhan. The bond, currency, and commodity markets are reading from a different, darker script.

“Safe-haven flight into the Swiss franc, the Japanese yen, and the dollar suggests that some large funds are battening down the hatches. The Australian dollar, a proxy for risk appetite, is plumbing depths last seen during the Lehman crisis.”

https://www.telegraph.co.uk/business/2020/02/14/bond-currency-markets-sniff-trouble-covid-19-pandemic-risk-equities/


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“JCB, the British digger maker, has cut working hours and suspended overtime for 4,000 UK employees after the coronavirus outbreak prompted a shortage in parts coming from China… JCB’s decision came as companies around the world counted the mounting cost of disruption caused by the coronavirus,

The boss of China’s biggest listed company, Alibaba, described the coronavirus outbreak as a “black swan” event…”

https://www.theguardian.com/business/2020/feb/13/businesses-worldwide-count-cost-coronavirus-outbreak


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