Grim economic data shows devastating impact of COVID-19

LONDON: Evidence mounted of the devastating economic impact of the coronavirus pandemic on Thursday (May 7) as hard-hit Europe moved to further ease lockdown measures that ground its economies to a halt.

Germany and France reported major slumps in industrial production and Britain said its economic output would plummet by 14 per cent this year. The United States was also expected to announce new jobless figures on Thursday showing millions more out of work.

Governments around the world are under immense pressure to ease the economic pain caused by measures to stop the virus, which has claimed more than 263,000 lives and left half of humanity under some form of lockdown.

Some European nations are now cautiously easing restrictions in the hopes of stabilising their reeling economies, with some shops and schools re-opening and even Germany’s Bundesliga football league to resume on May 15, though without spectators.

US President Donald Trump is also pushing for lockdown measures to be lifted, while engaging in a war of words with China that saw him claim the pandemic was a worse “attack” on the United States than Pearl Harbor or 9/11.

READ: Trump says coronavirus crisis ‘worse than Pearl Harbor’ or 9/11

But experts have warned that social distancing will remain necessary until a vaccine is developed – and governments are keen to avoid a devastating second wave of infections.

The British government was on Thursday reviewing lockdown measures, with a partial easing expected to be announced this weekend.

READ: UK could start easing coronavirus lockdown next week, says PM Johnson

TROUBLE FOR TOURISM

The easing has already begun in Germany, Europe’s largest economy, while on May 11 France is due to start emerging from a lockdown that began in mid-March, with Prime Minister Edouard Philippe to announce on Thursday how this initial de-confinement will take shape.

Germany has started reopening schools and shops

Germany, Europe’s largest economy, has started reopening schools and shops. AFP/Ina FASSBENDER

France is inching toward a May 11 deadline to begin easing its confinement measures

France is inching toward a May 11 deadline to begin easing its confinement measures. AFP/PHILIPPE DESMAZES

Many Europeans are anxious to get back to work, like Elena Isaac, a restaurant owner in Cyprus’s now-empty beach resort of Ayia Napa.

“You can’t survive with no tourists… It is impossible,” she told AFP, as nearby residents enjoyed the loosening of a six-week lockdown with swims in the Mediterranean.

Economists have been warning for weeks that the pandemic will lead to a global economic downturn not seen since the Great Depression of the 1930s and new data is bringing the impact into sharper focus.

The Bank of England said the economic output of Britain – which has the second-highest number of deaths in the world – was set to crash 14 per cent this year.

The forecast came a day after the European Union warned of a 7.7-percent eurozone contraction in 2020.

Industrial production in Germany fell by 9.2 per cent month-on-month in March, official figures showed on Thursday, the worst fall since the manufacturing output data series was started in 1991.

The slump in France was even greater with industrial output dropping by 16.2 percent in March on a monthly basis.

Airlines and travel are among the sectors worst hit by the pandemic, with flights grounded worldwide and social distancing measures severely limiting leisure and business trips.

The World Tourism Organization said on Thursday that the number of international tourist arrivals will plunge by 60 to 80 per cent in 2020 because of the pandemic.

Tourism in Cyprus has been badly hit

Tourism in Cyprus has been badly hit. AFP/Christina ASSI

CHINA HITS BACK AT TRUMP

Most of Europe has seen a significant drop in the number of new infections and deaths from the virus, though in Russia cases are on the rise and on Thursday it reported another record increase with more than 11,000 new infections.

The United States remains the hardest-hit country – with more than 1.2 million cases and over 73,000 deaths – but Trump has said it is crucial to re-open the shuttered economy.

Heading into a re-election campaign later this year, he has also ramped up his rhetoric against Beijing, telling reporters on Wednesday that the disease that emerged in the Chinese city of Wuhan last year “should have never happened”.

“Could have been stopped at the source. Could have been stopped in China,” he said. “This is really the worst attack we’ve ever had … This is worse than Pearl Harbor. This is worse than the World Trade Center.”

China on Thursday called the remarks “disharmonious, untruthful and insincere”.

“We urge the US side to stop shifting the blame to China and turn to facts,” foreign ministry spokeswoman Hua Chunying told reporters in Beijing.

Tom Frieden, former director of the Centers for Disease Control and Prevention, predicted the US death toll could top 100,000 by the end of May.

The pandemic has hammered healthcare infrastructure in many parts of the United States, including New York City, and its impact has been particularly severe among the poorest Americans such as undocumented migrants.

‘SPECTRE OF MULTIPLE FAMINES’

Many of them are afraid of deportation, as well as the risk of racking up unpayable medical bills and hurting their quest to obtain legal status. As a result, many have contracted and died of COVID-19.

“He was very ill but did not want to go to the hospital,” Victoria, a Mexican nanny in New York City, said of her 69-year-old husband who had kidney problems and diabetes.

“After two weeks, when he could no longer walk or breathe, my daughter took the risk, loaded him into the car and drove him there. He died three weeks later.”

The United Nations on Thursday again warned of the risk to the world’s least-developed countries, issuing a new appeal for US$4.7 billion in funding to help them – on top of the US$2 billion it has already requested.

“The most devastating and destabilising effects” of the pandemic “will be felt in the world’s poorest countries,” UN Under Secretary General for Humanitarian Affairs Mark Lowcock said.

“Unless we take action now, we should be prepared for a significant rise in conflict, hunger and poverty. The spectre of multiple famines looms.”

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Source: https://www.channelnewsasia.com/news/business/grim-economic-data-devastating-impact-covid-19-coronavirus-12712470