The European Central Bank (ECB) has just approved lowering interest rates and buying back bonds to boost eurozone growth. ECB has lowered deposit rates to a record low, from -0.4% to -0.5%. The agency will also begin to buy back bonds worth 20 billion euros a month, starting in November this year. "The executive board predicts the bond repurchase will last as long as it is necessary, to strengthen the effectiveness of the interest rate lowering. This will end as soon as the interest rate is raised," the notice said. ECB said. It also loosened long-term lending conditions for banks, and introduced a system of deposit interest rates to support banks.
German experts believe that the vaccine and the cure for Covid-19 will not be available before 2021, so it is necessary to deal "in a marathon style rather than sprinting". Even when the pandemic was spreading all over the world and there was no sign of a peak, European governments began to think about how to reopen factories, offices and schools while reducing the risk. muscle infection. Austria yesterday (April 6) said it would gradually reopen stores after Easter. This is the first European country to do this. The pressure to make a restart plan for governments is growing, due to the economic damage caused by the blockade measures. People are also concerned that if the blockade lasts too long, they will not have enough food supplies and medical care.
Today, half of Japan's economy will be in a state of emergency, reinforcing fears that Japan's GDP will drop by 20% in the second quarter. This afternoon (April 7), Japanese Prime Minister Shinzo Abe is scheduled to announce a state of emergency with Tokyo, Osaka and five other provinces. People are recommended to stay at home for a month. Mr. Abe is also preparing a record-breaking stimulus package - nearly $ 1,000 billion to prevent the economy from falling. When the blockade reaches half of the economy, Japanese officials can push the country into a recession that is predicted to be stronger than during the financial crisis. Mr. Abe's task is to balance this risk with the risk of the number of Covid-19 cases getting out of control. This is one of the decisive moments in Mr. Abe's record-long term.
The US stock market flourishes at this time is explained by an illusion that "investors know something that millions of people are facing unemployment." Death and despair are taking over America. The number of people who applied for unemployment benefits in the last two weeks is about 10 times higher than the previous record and probably not fully reflected because the government's processing system is overloaded. A series of businesses closed indefinitely. What is happening indicates the risk of another Great Depression taking place.
Bob Giaimo - founder of the restaurant chain Silver Diner hoped to receive government bailout in the next few days, but he did not intend to spend money right away. Small business owners in the United States are expected to use the loan right away so employees won't lose their jobs because of a pandemic. But there is very little work for Giaimo's staff to do at the moment. His restaurants in Virginia, Maryland, and the District all had to discontinue the meal service at the restaurant until local officials allowed them to reopen. "Getting a loan is hard enough. It's even harder to use it," Giaimo said. He is lobbying with parliamentarians for more flexible loan terms.
Trump, a businessman-like president, is at a loss as to whether he should listen to health experts or business circles about "when to reopen the economy." American business is actively campaigning for President Donald Trump to reopen his business soon. Phone calls from old business friends are still coming. Even economic advisers and others in the White House told him that the solutions had worked and could "relax" the economy back. Meanwhile, the image of the hospital overloaded on TV still makes him obsessed. Public health experts told him that what was doing was working, so don't relax. The problem he faces is that tens of thousands of people could die or lose millions of jobs. "I will have to make a decision and I only hope to God that it is the right decision," Trump said Friday during a daily press conference about the fight against the pandemic. killing more than 18,000 Americans and more than 16 million unemployed. "But I can say without a doubt that this is the biggest decision I have ever made," he added.
The way people spend determines which companies in the US exist and who has jobs. For a few weeks, the pillars of the American industry basically stopped working. Airplanes, restaurants and stadiums were suddenly empty. In many states, businesses deemed unnecessary - including luxury goods retailers and golf courses - have been ordered to close. "This is the sharpest decline in consumer spending we've ever seen," commented Luke Tilley, chief economist at the Wilmington Trust. All of the data below is based on an analysis of the New York Times from Earnest Research, tracking and analyzing credit and debit purchase behavior of nearly 6 million Americans. Although the data does not include cash transactions and therefore does not reflect all sales, it provides a slice of the impact of Covid-19 on the economy. A number of companies like Walmart, Amazon and Uber Eats have recorded a spike in purchases. But customers of many other businesses stop spending, according to this data.
The US economy, with its impressive records, is now exposed by Covid-19, revealing the weak classes behind the wealthy rich. In 2020, when there was Covid-19, there were many scenes that reminded American people of the poverty period of the Great Depression of 1937. It was the image of miles of cars in front of grocery stores and workers. unemployed dragon snakes went to apply for unemployment benefits, patients queued overnight outside the hospital to be tested ... They are just like a line of tired people waiting for relief in 1937. After their backs are giant posters, promoting American life, with two slogans "World's highest standard of living" (roughly translated: The world's highest standard of living) and "There's no way like the American Way" ( Translation: There is no style like the American Lifestyle).
Research firm Rystad Energy expects oil exploration and production companies to lose about 40% of their revenue in 2020, or about $ 1,000 billion. The world oil and gas industry earned $ 2,470 billion in revenue last year, according to Rystad Energy. But this year, industry revenue is expected to fall 40%, to only $ 1,470 billion when Covid-19 crippled transportation demand and forced companies to cut spending. Before the pandemic, Rystad Energy forecasted oil and gas industry revenue this year of $ 2,350 billion. Profits for 2021 are also now forecast to be lower, at $ 1,790 billion compared to the forecast of $ 2,520 billion before the pandemic.
Global GDP is expected to decline by 3% this year, marking the sharpest recession since the "Great Depression" of the 1930s, according to IMF forecasts. "World Economic Prospects Report 2020" The IMF has made a prediction that the global economy will recover partly by 2021, with a growth of 5.8%. But the organization also warned that the prediction was uncertain because the results could still be worse, depending on the course of the pandemic. "The recovery in 2021 is only partially, because the level of economic activity may remain below the level predicted before the pandemic," said Gita Gopinath, IMF chief economist. said. Under the best scenario, the world is likely to lose $ 9,000 billion in total production in two years, greater than the combined GDP of Germany and Japan.