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New Covid-19 outbreaks in South Korea, Germany and China have highlighted the challenge faced by governments seeking to loosen social restrictions, as millions of Europeans prepare for the tentative reopening of their economies today

“The Seoul city authorities were forced to shut down bars and clubs in the South Korean capital after a cluster of new infections was linked to the city’s party district…

“Chinese authorities also reimposed restrictions in a city near the border with North Korea on Sunday after recording a handful of new cases.

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“Meanwhile, Germany has experienced a rise in the reproduction rate — the average number of people that each confirmed coronavirus patient infects — to above 1, just days after Angela Merkel’s government moved to relax the shutdown on public life in Europe’s biggest economy.

“According to the Robert Koch Institute, the R number was 1.1 as of Saturday evening. Three districts exceeded the government’s self-imposed limit of more than 50 new infections per 10,000 people during the past seven days and will now have to postpone their exit from lockdown.”

https://www.ft.com/content/cf719c42-ff2f-4447-9f1c-346477724433


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Warning that the coronavirus crisis will have a more profound impact on the economy than initially expected, senior executives are increasingly concerned with the survival of their companies, a recent survey by consulting firm West Monroe shows.”

https://www.forbes.com/sites/sergeiklebnikov/2020/05/09/us-executives-are-more-worried-about-the-economy-than-last-month-heres-why/#517f901b760e


The worst recession since the Great Depression is prompting indebted companies to default, and increasingly more will do so in a way that’s harder for investors to detect.”

https://business.financialpost.com/pmn/business-pmn/hidden-defaults-set-to-soar-as-recession-squeezes-companies


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“As a Brookings report last week detailed:

““By the end of April, more than one in five households in the United States, and two in five households with mothers with children 12 and under, were food insecure. In almost one in five households of mothers with children age 12 and under, the children were experiencing food insecurity.””

https://www.nytimes.com/2020/05/10/opinion/us-hunger-coronavirus.html


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UK Retail and property chiefs have warned that the government’s business bailout package of reliefs, grants and loans will not be sufficient to stop the “imminent collapse of many businesses”.

“Retail bosses have formed an unusual alliance with their landlords to lobby the government for help with rental payments, with retailers warning that they will not be able to pay rents for months to come.”

https://www.ft.com/content/630f744a-148a-4955-b75f-e649d908f097


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Police in Germany say dozens of people were detained following protests against the pandemic restrictions after some rallies turned violent on Saturday.

“Berlin police said 86 people were detained after bottles were thrown at officers during a demonstration in Alexanderplatz, a large central square in former East Berlin.”

https://www.euronews.com/2020/05/10/more-than-130-detained-after-protests-against-coronavirus-restrictions-in-germany


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Several hundred demonstrators gathered in the Swiss capital, Bern, Basel, St Gallen and Zurich to protest against a government-imposed coronavirus lockdown.”

https://www.swissinfo.ch/eng/pandemic-politics_demonstrators-defy-ban-to-protest-against-lockdown/45748938


“…migrant farm workers are considered a problem and are greeted not with gratitude but resentment and suspicion.

“From Ireland to Italy and Germany to Romania there is rising tension over whether such workers should cross borders to harvest crops, and if so how many and under what conditions.”

https://www.theguardian.com/world/2020/may/11/covid-19-crisis-stokes-european-tensions-over-migrant-labour


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Iraq’s young protesters returned to the streets of Baghdad and other southern cities on Saturday night to oppose the new government of Mustafa al-Kadhimi, sworn in on Thursday after months of political deadlock.

“Before the coronavirus pandemic placed the country on lockdown, Iraq had been rocked by months of nationwide unrest…”

https://www.rudaw.net/english/middleeast/iraq/100520202


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Hundreds of protesters gathered in shopping malls across Hong Kong on Sunday as riot police quashed plans to hold a pro-democracy march before it began.

“The abortive protest – which some dubbed “Mother’s Day outing” to coincide with the annual holiday – was meant to kick off at in Tsim Sha Tsui, according to online posts.”

https://hongkongfp.com/2020/05/10/hong-kong-pro-democracy-protesters-chant-slogans-in-malls-as-police-fan-out-to-prevent-street-demo/


Years of social progress in China are at risk of being undone as the country grapples with the economic fallout of the coronavirus pandemic, a black swan event that has lashed the world’s second biggest economy and driven unemployment to historic highs.”

https://www.scmp.com/economy/china-economy/article/3083513/coronavirus-china-faces-historic-test-pandemic-stokes-fears


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South Korean exports and imports suffered a precipitous decline in the first 10 days of May, underlining a bleak outlook for Asia’s fourth largest economy and international trade as the coronavirus crisis slammed global demand.

“The numbers from South Korea, the first major exporting nation to release monthly trade data, underscores the pandemic’s devastating impact across supply chains and businesses, and points to a rough yeah ahead for international trade.”

https://www.reuters.com/article/us-southkorea-economy-trade/south-koreas-may-1-10-exports-dive-as-coronavirus-wipes-out-global-demand-idUSKBN22N0GL


Some Japanese central bankers called for even bolder steps than those announced at last month’s policy decision, a summary of bank views showed on Monday, to prevent the coronavirus triggering an economic slump as bad as the Great Depression.”

https://www.reuters.com/article/us-japan-economy-boj/pandemic-stirs-boj-debate-of-great-depression-like-downturn-idUSKBN22N03O


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Indonesian officials are becoming increasingly worried about the stability of the financial system amid an exodus in capital caused by the Covid-19 pandemic that’s already much larger than flows during the global financial crisis.”

https://www.bloombergquint.com/onweb/indonesia-s-economy-hit-by-virus-domino-effect-indrawati-says


Australia has done exceptionally well on the pandemic front… But the financials of the economy are dire, with alarming figures only now starting to surface. Any thought that the economy will quickly bounce back, now that the worst of the health crisis is hopefully over, is very much in the camp of wishful thinking.”

https://www.smh.com.au/national/massive-economic-cost-of-pandemic-becoming-clearer-20200510-p54rky.html


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To turn a decent profit, high-end Sydney restaurant Nomad needs an average of 1,500 covers per week, or a full 180-seat restaurant across two sittings from Wednesday to Saturday. When the pandemic hit, executive chef Jacqui Challinor made the difficult decision to put the business into hibernation.

““All of our staffing models, our wage costs, food costs … depend upon us turning over a certain amount of money a week, which isn’t going to happen with the restrictions that they’re proposing,” says Challinor.”

https://www.theguardian.com/food/2020/may/11/its-just-not-worth-opening-restaurants-in-australia-can-trade-again-but-will-they


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The global oil market witnessed a doomsday scenario on April 20… The oil prices have since rebounded. Market sentiment, however, is still fragile and oil price continues a volatile trajectory.”

https://www.pressreader.com/singapore/the-straits-times/20200510/282870847994480


Big Oil emerged from first-quarter earnings battered and bruised, but things are only going to get uglier.”

https://www.bloomberg.com/news/articles/2020-05-10/big-oil-earnings-battered-by-virus-but-worst-is-yet-to-come?utm_source=google&utm_medium=bd&cmpId=google


Avianca Holdings AVT_p.CN, Latin America’s second-largest airline, filed for bankruptcy on Sunday, after failing to meet a bond payment deadline, while its pleas for coronavirus aid from Colombia’s government have so far been unsuccessful.”

https://www.reuters.com/article/us-avianca-holding-bankruptcy/latin-americas-second-biggest-airline-avianca-driven-to-bankruptcy-by-coronavirus-idUSKBN22M0N1


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Our analysis suggests that these changes in the world economy make a V-shaped recovery from the recession unlikely. Most international organisations such as the IMF and the OECD assume a V-shaped recovery in their outlook for the next year. This narrative may have been influenced by the experience of the great recession of 2008/2009, in which Global Value Chains recovered quickly after the crisis.

But our analysis suggests that this recession is different.”

https://voxeu.org/article/how-covid-19-transforming-world-economy


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We cannot avoid our problems forever.”

https://citizen.co.za/business/business-insight/2281927/covid-19-the-trigger-of-global-recession-not-the-cause/


Read the previous ‘Economic’ thread here and visit my Patreon page here.

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