COVID-19: NEWS FROM AROUND THE WORLD

In collaboration with Acimac, on this page we are publishing a summary of the main daily economic news items concerning the measures taken in countries around the world to respond to the Covid-19 crisis.

24 APRIL 2020

• USA - UPDATES ON ECONOMIC MEASURES

On Tuesday, April 21 the US Senate approved a new package of loans for small and medium-sized enterprises, guaranteeing a new injection of liquidity, equal to 310 billion dollars, to be used for the support measures already in place (Paycheck Protection Program and Economic Injury Disaster Loan). By the end of this week, the measure will pass to the House of Representatives and then be effective.

Scheduled time frame for the reopening of economic activities in some US States:

• ARIZONA stay-at-home until April 30th.
• CONNECTICUT stay-at-home until May 20th.
• DELAWARE stay-at-home until May 15th.
• FLORIDA stay-at-home until April 30th.
• MAINE stay-at-home until May 15th.
• MASSACHUSETTS stay-at-home until May 4th.
• MICHIGAN stay-at-home until April 30th.
• NEW YORK stay-at-home until May 15th.
• NORTH CAROLINA stay-at-home until April 29th.
• OHIO stay-at-home until May 1st.
• PENNSYLVANIA planned reopening with effect from 8 May.
• SOUTH CAROLINA stay-at-home until April 27th, scheduled opening for certain retailers with specific limitations.
• TENNESSEE expected to reopen for most companies from May 1st, provided that they comply with specific provisions issued to protect employee health.
• TEXAS stay-at-home until April 30, with some activities reopening as from April 27th. • VIRGINIA stay-at-home until June 10th.

23 APRIL 2020

22 APRIL 2020

• GERMANY – INVESTOR CONFIDENCE RISES

Surprisingly, investor confidence in Germany is back positive: in April the Zew index flew to 28.2 points from -49.5 points in March, despite the forecast of a milder rise to -42 points. None of the economists had predicted a positive return to the confidence index.

• SPAIN - 2020 GDP BETWEEN -6.6% AND -13.6%.

The Bank of Spain expects the country's GDP to contract between -6.6% and -13.6% this year. However, the extent of the decline remains uncertain and dependent on the duration of the confinement.

• FRANCE – LOCKDOWN COST IS 120 BILLION EURO

OFCE (the French Observatory of Economic Conjunctures) estimates that the eight weeks of confinement have caused a loss for the French economy amounting to EUR 120 billion, while the 'forced savings' of households will be 55 billion.

• EUROPE – REOPENINGS

Among the European countries that are progressively easing isolation measures, Austria is going to reopen almost all economic activities since May, excluding cultural and sporting events; schools and restaurants will also reopen on 15 May. In Denmark further easing of restrictions has taken place with the reopening of some commercial activities; as from 10 May the gatherings of up to 500 people will be authorised. The Czech Republic began on 21 April the first of five phases of easing of restrictive measures by reopening markets, car dealerships and some small businesses. After 40 days of strict confinement, Albania is reopening hundreds of productive and commercial activities, including hotels, provided that the safe distances are maintained.

17 APRIL 2020

• GERMANY - €600 BILLION EMERGENCY FUND

Finance Minister Olaf Scholz has announced a €600 billion emergency fund which will soon be available to stabilise the German economy. The government expects to grant at least €156 billion of new loans this year. As of 17 April, some 725,000 German companies had applied for aid in the form of short-time work allowances for their employees.

• UNITED STATES - UNEMPLOYMENT CONTINUES TO RISE

The number of workers filing for unemployment benefits in the USA has risen to 22 million. Some economists warn that by the end of April the unemployment rate could exceed the level recorded during the Great Depression. According to the Confindustria Research Department, the shutdown of production activities coupled with the fall in world demand will have a significant impact on GDP in at least two quarters, triggering a recession. In an unprecedented policy response, the US government has approved the $2.3 trillion CARES Act emergency stimulus package, the largest rescue package in US history equivalent to 11% of GDP.

• CHINA - TOWARDS STABILISATION

The Chinese economy contracted by 6.8% in the first quarter of 2020 compared to the same period last year. After the slump in output in February, Chinese manufacturing is now showing signs of recovery, with production gradually picking up as companies re-open. However, alongside the uncertainty surrounding the prospects for long-term control of the epidemic in the country, China’s economic outlook is being adversely affected by the decline in foreign demand.

• ASIA - IMF FORECASTS ZERO GROWTH

The IMF expects Asia’s economy to suffer zero growth in 2020 for the first time in 60 years. It has approved a $1.386 billion emergency aid package for Pakistan.

16 APRIL 2020

• FRANCE - 8.7 MILLION WORKERS ON TEMPORARY UNEMPLOYMENT

14 APRIL 2020

• ITALY – SHUTDOWN OF NON-ESSENTIAL PRODUCTION ACTIVITIES EXTENDED TO 3 MAY

• FRANCE - EXTENSION OF RESTRICTIONS AND FIRST QUARTER GDP

• GERMANY - GDP PROJECTED TO FALL BY 4.2% IN 2020 BEFORE A 5.8% RECOVERY IN 2021

• UNITED STATES: UNEMPLOYMENT CONTINUES TO RISE The U.S.

Department of Labor has confirmed that more than 16 million citizens applied for unemployment benefits in the 3 weeks from 17 March to 3 April. Several analysts expect this number to reach 20 million by the end of April, raising the unemployment rate from 3.5% in February to 15%. As is well known, the Federal Reserve has announced that it intends to inject $2.3 trillion to stimulate the economy. The government's aid plan for businesses covers both financial and employee costs.

• AUSTRALIA – RISE IN UNEMPLOYMENT

Unemployment in Australia is projected to rise to 10% in June due to the economic crisis caused by the Covid-19 emergency. This is the first time unemployment has reached double figures since April 1994.

• INDIA - LOCKDOWN EXTENDED UNTIL 3 MAY

On 14 April, Indian Prime Minister Narendra Modi announced the extension of the country's lockdown until 3 May following a series of consultations with the authorities of the individual Indian states.

• PAKISTAN - GRADUAL RESUMPTION OF SOME KEY ACTIVITIES

Following a three-week lockdown and a strict curfew in parts of the country, Pakistan has relaxed its restrictive measures as of 14 April, allowing for the resumption of agricultural activities and several industries including steel and cement production. Continuation of the economic shutdown would have resulted in the loss of some 18 million jobs with half the population plunged into poverty.

7 APRIL 2020

• GERMANY: GUARANTEED LOANS FOR SME’S

As an extension of the €1.1 trillion emergency fund plan presented to parliament on 25 March, Germany will guarantee 100% of the loans granted by banks to SMEs. The federal government intends to fully guarantee loans of up to €500,000 for companies with a maximum of 50 workers and up to €800,000 for larger companies.

• JAPAN: €900 BILLION RELIEF PACKAGE APPROVED

Japanese Prime Minister Shinzo Abe has announced a 108 trillion yen (€915 billion) relief package to boost the country's economy. The announcement was made on 8 April, the same day the country declared a state of emergency.

• ITALY: FINANCIAL SUPPORT FOR BUSINESSES

On the evening of 6 April, the Italian government approved and expanded the Decree Law introducing “Urgent measures to facilitate immediate liquidity for companies to a total of €400 billion, including €200 billion for exports”. Pending publication in the Gazzetta Ufficiale, the measure will provide guarantees similar to credit assurances, including: SME Guarantee Fund (which will probably be raised to €65 billion to support SMEs and mid-cap companies); new guarantees granted by the Italian export credit agency SACE (on €200 billion of loans); modification of the SACE guarantee mechanism to cover “non-market risks” and increase public export support for companies (up to a further €200 billion).

6 APRIL 2020

• USA: $350 LOAN PROGRAM FOR SMALL BUSINESSES

As of 6 April, the Paycheck Protection Program offers almost $350 billion in loans for small businesses as part of the $2.2 trillion stimulus package intended to cushion the economic impact of the coronavirus pandemic.

• SINGAPORE: SCHOOLS AND OFFICES CLOSED UNTIL 5 MAY

As part of further restrictions aimed at curbing the spread of the coronavirus, Singapore has decided to close schools from 8 April and most of its offices from 7 April to 5 May. Essential services such as markets, supermarkets, medical clinics, hospitals, utilities, transport companies and banks will remain open.

• BANGLADESH: NEW STIMULUS PACKAGE

Bangladesh has announced an economic stimulus package worth $8.5 billion (€ 7.9 billion) to cushion the shock of the global coronavirus pandemic.

4 APRIL 2020

• WORLD BANK READY TO ALLOCATE €148 BILLION

The World Bank is prepared to deploy $160 billion (€148 billion) in emergency coronavirus aid over the next 15 months. “We are working to strengthen developing nations’ ability to respond to the COVID-19 pandemic and shorten the time to economic and social recovery,” said World Bank Group President David Malpass. India will be the main beneficiary of the first batch of aid and will receive $1 billion, followed by Pakistan with $200 million and Afghanistan with just over $100 million. Countries in almost every continent will receive financing.

• EU EUROPE: EUROPEAN COMMISSION CONFIRMS €100 BILLION “SURE” ANTI-UNEMPLOYMENT FUND

To help the countries most affected by the coronavirus epidemic such as Spain and Italy, the European Commission has confirmed its proposal of the SURE unemployment risk mitigation fund, which will be able to deploy €100 billion in loans underpinned by €25 billion of guarantees committed by Member States. “To date, the European Union, that is the European institutions and Member States, have mobilised €2,770 billion. And this is the largest answer to a European crisis ever given,” said European Commission President Ursula von der Leyen.

• RUSSIA: WORKERS TO STAY AT HOME UNTIL 30 APRIL

Paid leave for employees has been extended until the end of April as part of a directive applying to all major Russian cities and regions (primarily Moscow and St Petersburg), which have taken extraordinary measures to contain the virus.

• SPAIN: UNEMPLOYMENT UP 9.3% IN MARCH

The number of unemployment benefit applications made in Spain (under lockdown since 14 March) increased by 9.3% in March compared to February. Between 12 and 31 March, the number of people who paid social security contributions fell by 898,822. In comparison, the number of people receiving benefits increased by 64,843 in the first 11 days of March.

• GERMANY: FINANCIAL AID

According to Germany’s Economy Minister Peter Altmaier, the decline in GDP this year may be worse even than the -5.7% of 2008-2009, with the biggest contraction expected in April and May (greater than -8%). Finance Minister Olaf Scholz said that 1,800 applications have already been submitted (of which 1,500 have already been approved) for a total of about €9 billion in government financial aid to counter the economic repercussions of the pandemic. Germany has agreed a package worth €750 billion, which will involve taking on new debt for the first time since 2013.

• UNITED STATES: RECORD UNEMPLOYMENT

The US Department of Labor has confirmed that 10 million workers applied for unemployment benefits in the last two weeks of March following mass layoffs across the country.

3 APRIL 2020

• EU – SHARP FALL IN ESI

According to data published by the European Commission, in March the Economic Sentiment Indicator (ESI) fell both in the Euro Area (down 8.9 points to 94.5) and in the EU (down 8.2 points to 94.8). This is the biggest fall since 1985. Among the large economies in the Euro Area, Italy is the worst hit with a 17.6 point drop in ESI, followed by Germany (-9.8), France (-4.9), the Netherlands (-4.0) and Spain (-3.4).

• SPAIN: PRODUCTION ACTIVITIES SHUT DOWN UNTIL 9 APRIL

Royal Decree-Law 10/2020 of 29 March introduction a shutdown on all non-essential production activities until 9 April, a measure similar to the one already adopted in Italy on 23 March and extended on 1 April until 13 April.

• FRANCE: PMI INDEX FALLS TO MINIMUM VALUE SINCE 2013

Manufacturing PMI fell from 49.8 to 43.2 in March, the lowest level since January 2013. A total of 337,000 companies have placed 3.6 million employees on partial unemployment.

• GERMANY: 470,000 COMPANIES APPLY FOR GOVERNMENT SUPPORT

Some 470,000 companies have already applied for a government subsidy to support employees with reduced working hours. In March the manufacturing PMI fell slightly to 45.4 (from 45.7 in February). Finance Minister Olaf Scholz has announced the forthcoming allocation of €2 billion to help startups overcome the effects of the crisis. According to the German government’s panel of economic advisers, German GDP is likely to see a contraction of between 2.8% and 5.4% in 2020 before bouncing back next year. The restrictive measures aimed at limiting the spread of the coronavirus will remain in force until at least 19 April.

• UK: CREDIT RATING DOWNGRADED FROM AA TO AA-

On 31 March, Fitch downgraded the UK’s credit rating from AA to AA- citing the budget impact of the coronavirus outbreak and ongoing Brexit uncertainty.

• SWITZERLAND: EMERGENCY LIQUIDITY PLAN FOR BUSINESSES

The Swiss government is implementing an emergency liquidity plan for companies affected by the coronavirus crisis. The banks have already distributed more than half of the CHF 20 billion (€18.3 billion) earmarked for state-guaranteed loans. SWEDEN: GDP EXPECTED TO FALL BY 4% IN 2020 The unemployment rate could rise to 9% according to Finance Minister Magdalena Andersson.

• JAPAN: ECONOMIC MEASURES TO SUPPORT BUSINESSES

The Japanese government has announced that companies whose monthly sales have been more than halved from a year earlier for three months between February and October due to the coronavirus epidemic will be exempted from paying tax. Japan has extended its entry ban to foreign travellers from 73 countries.

• TAIWAN: ECONOMIC MEASURES

President Tsai Ing-wen HAS announced a financial stimulus package of about €31 billion to counter the impact of the health emergency on the country's economy.

• ASIA – WORLD BANK FORECASTS

According to World Bank forecasts, economic growth in the Asia-Pacific region may slow to 2.1% this year compared to 5.8% in 2019, assuming that economic activity resumes in the summer. If the health crisis continues, economic growth in the region could fall to 0.5%.