In this week’s recap talk about the real pandemic numbers and see how the economy is recovering but stocks dropped during these days.
Factories in Asia & Europe continue to show an expansion in manufacturing activity, as the global economy gradually emerges from a downturn triggered by the pandemic, thanks in part to massive government & central bank fiscal & monetary stimulus programs.
Australia became the latest country to officially enter a recession for the first time since 1991, the worst performance since record keeping began there in 1959, although the 7% GDP decline was far better than the coronavirus pandemic induced business disaster seen in other developed economies.
German Chancellor Merkel’s ruling bloc is behind plans allowing for extraordinary deficit spending to the end of 2021 due to the pandemic. As part of a massive stimulus push, Germany temporarily suspended constitutional limits, designed to keep debt in check, with new borrowing this year of $257B. The government has made over 1.3T Euros ($1.54T) available, the most by far in the E.U. Public debt as a % of GDP will grow toward 75% in 2020, from 60%, but still well below many of the world’s major economies.
The worsening conflict between China & the U.S. has damaged bilateral trade, but a complete decoupling between the 2 largest global economies would be even more damaging to China’s long-term growth prospects falling to about +3.5% in 2030, down from the current forecast of +4.5%, which assumes relations remain broadly unchanged. If American allies also decouple from China, Chinese GDP would fall an additional -1.6%.
Kuwait’s one of the world’s richest countries is now struggling to balance its books as a sharp decline in energy prices brings challenges over how all the Gulf Arab states are run financially. Officials in Kuwait were already warning last month that there wasn’t enough money to pay state salaries beyond October.
Samsung officially announces the 5G-compatible Galaxy Z Fold 2; Scotland revives plans for a 2nd independence referendum; The euro gains strength against the dollar.
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