IAN’s Week in Review: GDP falls off the cliff in Q1 as economies prepare to gradually open up
GDP data showed the extent of the corona-virus led recession, whith sharp falls in Europe and in the US. In the Euro Area GDP was down 3.8% in Q1 relative to the previous quarter, while estimates for France, Italy and Spain, three of countries most deeply affected by this crisis, showed drops of 5.8%, 4.7% and 5.2% respectively. In the US, GDP was down 4.8%. Given that the lockdown started towards the end of the quarter in mid-March in most countries but is due to be extended, at least, partially, up until the end of May, the economic impact in the second quarter is likely to be even more severe.
The ECB responded to the data by expanding its already extraordinary programme: it will now lend to banks at rates as low as -1% (which means effectively paying them to accept Money) and increasing the amount of asset purchases. In the US, the Federal Reserve left policy uchanged but prepared makets for a long and volatile road to recovery as Chairman Powel said to expect “considerable risks to the economic outlook over the medium term”.
Meanwhile, the EU confirmed that it had changed a report on disinformation following diplomatic pressure from chinese authorities, toning down its criticism of China. The US President also added pressure on China, saying he had evidence that the coronavírus emerged from a Wuhan laboratory.
International Press Review
Capitalism is not to blame, it’s our escape route out of this mess, by Robert Colvile: This coronavirus crisis has things to teach us. We have clearly optimised the economy for efficiency rather than resilience
Reading the COVID-19 Market, by Jim O’Neil: There is no telling whether equity markets are correct in defying the popular narrative about a coming Great Depression-scale downturn. Investors may be clinging to irrational hopes, or they may be betting that reports of the death of globalization have been greatly exaggerated.
The end of the office? Coronavirus may change work forever: Business ease in adapting to lockdowns changes attitudes to remote set-ups
Even in a pandemic, politicians must decide, by FT’s editorial board: Being ‘guided by the science’ does not mean hiding behind it
What History Can Tell Us about Today’s Coronavirus Pandemic: In an interview, medical historian Frank Snowden discusses how the coronavirus pandemic mirrors past outbreaks and argues that we must quickly apply the lessons learned today in preparation for the next disease.
El sector público también debe arrimar el hombro: Los ajustes derivados de la crisis no pueden recaer solo en las empresas, como pretende el Gobierno
Gestion du coronavirus : l’exécutif français jugé plus durement que ses homologues européens: Selon des enquêtes du Cevipof et d’Ipsos-Sopra Steria dans différents pays, les sondés français sont à la fois plus angoissés sur la situation et plus sceptiques sur leurs dirigeants. Le niveau d’anxiété en France rend l’étape du déconfinement périlleuse.
«Basta con i pregiudizi, l’Italia non è spendacciona»: il mea culpa di “Der Spiegel”, La crisi europea per il Coronavirus sembra aver portato il più grande settimanale tedesco (che prima ci detestava) a una campagna pro-Italia
