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It is hard to imagine that the suffering and despair across the Middle East could worsen. But across Syria, Lebanon, and Iraq a new economic unravelling is continuing apace, threatening to throw the region into even deeper turmoil. In Lebanon and Syria state finances are collapsing and hyper-inflation is setting in, while in Iraq a dramatic collapse in oil revenues has depleted the budget…

“…the wider region is engulfed in a devastating economic collapse that is pushing millions of people into humanitarian crisis and risks provoking wider forces of instability. Economic implosion will further hollow out immensely weak states, laying the ground for social unrest and possible intensified conflict.”

https://www.ecfr.eu/article/commentary_economic_meltdown_in_the_middle_east_how_europe_can_soften_the_i


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Tribal conflicts in southern Iraq have become more frequent and deadly in recent months, as security forces have been hamstrung by local power structures and distracted by the coronavirus lockdown

“…the battles… threaten to destabilize areas around oil fields responsible for the large majority of Iraq’s production.”

https://www.iraqoilreport.com/news/tribal-conflicts-escalate-in-iraqs-oil-heartland-42913/


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Lebanon’s routine daily electricity cuts have increased up to five-fold in the capital Beirut in recent days following a corruption scandal involving Algeria’s national oil company that caused fuel shortages at power plants

“A Lebanese judge ordered the arrest of 17 people in April after fuel imported from Algeria was discovered to be tainted.”

https://www.thenational.ae/world/mena/lebanon-crisis-fuel-scandal-leaves-lebanese-in-the-dark-for-longer-1.1043191


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The Palestinian government on Thursday said it will pay its employees half of their salary for the month of May, amid the decline in the country’s revenues.

“Shukri Bishara, Palestinian finance minister, said in a news conference in Ramallah that the payment of half salary will continue in the coming period “as long as the tax revenues crisis continues.””

https://www.aa.com.tr/en/middle-east/palestine-cuts-staff-pay-in-half-amid-financial-crisis/1897364


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European governments are fast learning that they’ll have to live with aid programs to save jobs and businesses longer than thought to keep the economy from falling off a cliff

“The outlook has forced officials to set aside concerns over rising debt to prolong their crisis measures…”

https://finance.yahoo.com/news/europe-pushes-avoid-economic-calamity-040000114.html


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The collapse of Britain’s biggest shopping-mall owner is the starkest warning yet of the pandemic-related economic woes the country is likely to face.

“More than 100,000 retail jobs depend on the malls owned by Intu — and if a buyer cannot be found for the properties, those jobs will be lost.”

https://www.voanews.com/covid-19-pandemic/europe-teeters-precipice-mass-unemployment


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Almost three-quarters of UK manufacturers are preparing to cut jobs in the next six months, according to new figures that will heap further pressure on the government to protect employment ahead of an economic stimulus package expected next week…

“…executives said they were already shifting from using the furlough scheme to pay their workers to starting redundancy programmes given worries that demand will remain subdued for some time.”

https://www.ft.com/content/2defffa2-ab38-4c50-862c-012b9a545825


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The coronavirus recession has dealt a double blow to young people in the UK, who are more likely to have lost their jobs amid the lockdown and now face bleak career prospects, a leading think tank has warned.

“New research from the Institute for Fiscal Studies (IFS) today said the carnage in the hospitality and retail industries combined with the collapse of hiring is likely to “scar” young people’s careers.”

https://www.cityam.com/young-people-face-economic-scarring-from-covid-says-top-think-tank/


The UK and EU have said serious differences remain over a post-Brexit trade deal, following the latest negotiations in Brussels.”

https://www.bbc.co.uk/news/uk-politics-53266902


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“…while the White House has already boasted the report is a sign of successful economic recovery, the reality is that millions of Americans are still indefinitely out of work.

“And to make things worse, the report gets its data from a survey that was administered in the earlier half of June, before states such as California, Arizona and Texas reversed the reopening of businesses like gyms and bars in the wake of huge surges of new Covid-19 infections.”

https://www.theguardian.com/business/2020/jul/02/us-jobs-report-june-key-takeaways


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“About 1.43 million workers filed first-time claims for unemployment insurance last week…

“That latest round of applications means more than 48 million Americans have made initial jobless benefits claims in just 15 weeks. Initial jobless claims are the nation’s most reliable gauge of layoffs.”

https://eu.usatoday.com/story/money/2020/07/02/layoffs-1-4-m-workers-file-unemployment-covid-19-signals-slow-recovery/5357970002/


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The U.S. trade deficit widened in May as the COVID-19 pandemic pushed exports to their lowest level since 2009, strengthening expectations the economy will contract in the second quarter at its steepest pace since the Great Depression

“Exports tumbled 4.4% to $144.5 billion, the lowest since November 2009. Goods exports plunged 5.8% to $90.0 billion, the lowest since August 2009.”

https://uk.reuters.com/article/usa-economy-tradefigures/us-trade-deficit-widens-as-exports-fall-to-lowest-level-since-2009-idUKL1N2E82Q4


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Latin American countries continue to struggle to control the spread of Covid-19, exacerbating uncertainty about the future of stay-at-home measures and complicating any assessment of the depth of the recession that regional economies will suffer this year

“Aggressive rate-cutting cycles, together with the rise in risk aversion, resulted in widespread FX weakness across the region.”

https://think.ing.com/articles/latin-american-latam-mexico-brazil-chile-recession-deepens-fiscal-challenges/


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Brazil’s government on Thursday revised its 2020 fiscal outlook, forecasting significantly higher debt and wider deficits due to the COVID-19 crisis, and said it will be over a decade before public debt falls back to last year’s level

“Brazil is in for a prolonged period of severe austerity once the immediate crisis passes.”

https://uk.reuters.com/article/us-brazil-economy-govt-forecasts/brazil-revises-2020-fiscal-outlook-sees-lost-decade-for-national-debt-idUKKBN2432CZ


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Facing a perfect storm of sharply lower oil prices, a devastating coronavirus outbreak, loss of financing options and deep recession, Ecuador has chosen to restructure its global bonds (USD17.6 billion).

“With its resources constrained, prioritizing debt service against such a dire backdrop had become economically and politically untenable.”

https://www.fitchratings.com/research/sovereigns/ecuador-debt-restructuring-prospects-02-07-2020


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A British judge rejected a claim by Venezuelan President Nicolás Maduro seeking the release of $1bn of the country’s gold reserves held in a Bank of England vault, a decision that sustains US-led efforts to cut off the authoritarian leader’s regime financially…

“[because] the UK government officially recognised US-backed opposition leader Juan Guaidó as Venezuela’s legitimate president…”

https://www.fnlondon.com/articles/uk-high-court-rejects-venezuelan-presidents-claim-over-1bn-in-gold-held-by-boe-20200702


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“Despite comparatively solid financial indicators through the end of March 2020, Fitch Ratings revised the Long-term Issuer Default Rating (IDR) Outlooks on the large, private-sector Peruvian banks it rates (with the exception of Scotiabank Peru, which benefits from support) to Negative from Stable in late April.”

https://www.fitchratings.com/research/banks/unprecedented-crisis-challenges-peruvian-bank-ratings-02-07-2020


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Falling world oil prices and the coronavirus pandemic have made Angola one of the countries most exposed to financial crisis

“Angola is struggling to meet repayment deadlines for eurobonds issued by the country and will have to mobilise $1.5bn this year.”

https://www.bizcommunity.com/Article/7/834/205788.html


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[Ghanaian customers] fumed over the government’s announcement that they [customers] of collapsed banks should forfeit 50% of their deposits if they want their deposits paid back to them.

“They passionately called on their colleagues across the country to massively vote out the Nana Addo led New Patriotic Party’s government, accusing government of visiting innocent citizens with unjustified hardship.”

https://www.modernghana.com/news/1013683/upper-east-aggrieved-customers-of-collapsed-banks.html


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“Across the globe, the pandemic has tanked economies as the world faces its worst collective downturn since the Great Depression.

Russia has been particularly hard hit by the twin blows of the coronavirus and the collapse in oil prices. Russia relies on taxes from the oil and gas sector for 40 percent of its budget.”

https://www.washingtonpost.com/world/2020/07/02/we-feel-absolutely-abandoned-how-pandemic-russia-tanked-economy-plunged-families-into-crisis/


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As poverty rises in Japan, the country’s middle class is slowly eroding away, according to a recent report by Oxford Economics’ Shigeto Nagai.

““After the bubble burst in the 1990s, income has declined across the income percentiles, and the share of low-income households has risen as those of middle- and high-income groups shrink,” Nagai, who is head of Japan economics at the firm, wrote in the report.”

https://www.cnbc.com/2020/07/03/japans-middle-class-is-disappearing-as-poverty-rises-warns-economist.html


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The ramifications of a new security law imposed on Hong Kong by China are still unfolding, as authorities moved to outlaw a popular protest movement slogan and at least one prominent activist fled the city rather than face potential arrest.

“Nathan Law, a former lawmaker and leader of the 2014 Umbrella Movement, said late Thursday that he had left Hong Kong…”

https://edition.cnn.com/2020/07/02/asia/hong-kong-security-law-intl-hnk/index.html


What is the credit market telling us exactly? Stresses lie ahead.”

https://think.ing.com/articles/rates-warning-signs-that-equities-have-it-all-wrong/


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“…an accentuation of the economic crisis could tip more companies into insolvency – sending credit defaults at banks surging. Those spared will revisit credit lines in March and April they tapped in the initial panicked weeks of the crisis to pad their liquidity cushions.

This type of «run» on credit, the bankers report, can lead to liquidity issues for banks – the interbank market threatens to dry up when institutes refused to lend to each other anymore (a phenomenon vividly demonstrated on a large scale in 2008/09)…

“…the fact the central bankers and financial supervisors have [this scenario] in their sights speaks volumes – and they are already issuing warnings.”

https://www.finews.com/news/english-news/41966-coronavirus-second-wave-liquidity-corporates-credit-lines-financial-crisis


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“…a negative interest rate environment can be particularly tough for anyone in retirement living off their savings.

“It can also be a very difficult concept to communicate to consumers. Jane Sydenham, investment director at Rathbones, said: “It’s hard to tell people they’ll earn negative interest on their savings. It doesn’t feel good and can potentially lead to people pulling money out of the banks and building societies and sticking it under the mattress, at risk of burglary and fire.””

https://www.forbes.com/sites/advisoruk/2020/07/02/how-would-negative-interest-rates-affect-your-finances/#20a055d65170


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