Economic impact of COVID-19 in South Africa vs The World
Households are bunkering cash amid the coronavirus outbreak, worried about the economy, their jobs and their future incomes.
As near-term indicators pick up, central to the longer-term recovery is whether consumer worries fade enough to get people to spend again. The opposite – continued saving – could create a negative spiral of weaker demand, business closures and higher unemployment.
Here are some of the charts that appeared on Bloomberg this week, offering insight into the latest developments in the global economy:
The damage inflicted on the global labor market by the coronavirus is proving worse than initially estimated, according to the International Labour Organization. It’s also predicting that it will be impossible to repair in the second half of the year, which isn’t good news for incomes, livelihoods and economic growth.
That backdrop appears to be driving cash hoarding, according to a study that seeks to debunk the notion that the pandemic was hastening the demise of paper money due to e-commerce or fears of infection. The Bank for International Settlements supported those findings, saying “precautionary holdings of cash have risen in some economies.”
The job market made greater progress than expected last month digging out of a deep hole with a record 4.8 million jobs added. Yet optimism over the rebound was tempered by stubbornly high layoffs and a resurgent coronavirus outbreak across parts of the U.S.
A closely watched measure of manufacturing jumped in June to the highest in more than a year, signaling the resumption of growth as pandemic-related lockdowns ended.
With lockdowns and social distancing changing consumption patterns, official U.S. data may be understating inflation right now, especially for low-income households, according to Bloomberg Economics.
Italy may have weathered a financial-market storm this year, but officials are already working on a new line of defense for the next crisis. That strategy involves enlisting citizens in the protection of the republic’s finances: The government is marketing a first fully retail-based security for sale next week.
The U.K. hospitality sector is getting ready to open en masse this weekend after months of lockdown to stem the spread of the coronavirus pandemic. More than half of businesses in an industry survey expect to open by the end of the month. Most will open within days of July 4, desperate to get revenue coming in again after the recent hit.
Japanese Prime Minister Shinzo Abe will fall well short of his pledge for women to hold 30% of the nation’s leadership positions this year as the coronavirus pandemic highlights the fragility of women’s employment gains.
India’s economic ties with China run deep, making the recent escalation in political and trade tensions between the two powerful neighbours all the more worrying for businesses.
South Africa’s economy probably contracted more than 30% in the second quarter when restrictions to curb the spread of the virus shuttered almost all activity for five weeks, according to central bank forecasts.
Purchasing managers’ indexes for June signaled a manufacturing rebound is under way in emerging markets. Even though most countries are still in the contraction zone, with the PMI readings below 50, the scale of improvement over May suggests economic activity is picking up. The big surprise: Turkey and South Africa had the strongest expansion.