Australia’s economy set for first recession since 1991: McIntyre

first_imgMcIntyre forecasts GDP to grow by 0.4 percent in 2020, some 1.5 percentage points below his pre-coronavirus forecast.The Reserve Bank cut interest rates last week and money markets are pricing in a further reduction in April, which would bring it to the estimated lower bound of 0.25% and open the door to unconventional policy. The government is finalizing a fiscal “boost” that could amount to A$10 billion ($6.6 billion) to support firms struggling with cash flow and help them keep on employees.McIntyre predicts large budget deficits ahead as the automatic stabilizers — increased welfare payments and reduced tax collection — begin to take hold. That’s on top of the fiscal stimulus needed to boost demand and confidence.The Treasury and RBA estimate the impact on tourism and education from China’s shutdown and other virus fallout will cut 0.5 percentage point from GDP in the first quarter. That doesn’t include supply chain disruptions and is in addition to a 0.2 point cut from wildfires over summer. McIntyre said the comparison with the 2003 SARS epidemic is problematic because of the massive increase of China’s importance to both the Australian and global economies. He notes that in the Australian Dollar Trade-Weighted Index of the exchange rate, the weighting of the renminbi rose to 30 percent, higher than any other currency in the 36-year history of the gauge.McIntyre notes that the channels through which the reduction in domestic activity transmits during a pandemic were laid out in a 2006 Treasury paper whose author is Steven Kennedy, the current secretary to the Australian Treasury. That analysis saw the economy contracting 5% in the first year.Transmission of the virus in Australia is now occurring, meaning disruptions and shutdowns of aged-care facilities, child-care centers and schools. Health authorities anticipate several months of disruptions from the virus.McIntyre predicts the economy will bounce back, noting that fourth-quarter GDP released last week showed several segments turning around, including housing and mining investment. China is also set to stimulate its economy, which traditionally benefits Australia.Property prices Down Under have surged since late last year when the RBA resumed easing.“How Australia’s housing market weathers the virus outbreak will be a key area of interest given the earlier downturn in construction activity,” he said. “Australia’s resources sector also stands well placed to benefit from a resumption of activity in China’s construction sector and stimulus measures.”Topics : Read also: Virus puts globalized economy at risk, says OECD chief economistcenter_img Australia’s economy will record its first recession since 1991 as the hit from China’s virus-induced slowdown is amplified by slumping confidence and domestic disruptions as the outbreak intensifies Down Under, according to Bloomberg Economics’s James McIntyre.Gross domestic product will fall 0.4 percentage point in the first three months of the year and 0.3 percentage point in the second quarter, ending a 28-1/2-year stretch of economic growth, he said in a report Monday.“Isolations and domestic disruptions to contain the spread of the virus will have a mounting economic impact, which is likely to result in a further GDP contraction in 2Q and potentially beyond,” McIntytre said. “Stimulus, both fiscal and monetary, will help to reduce the damage, but is unlikely to be enough to offset the impacts.”last_img read more

UK’s Harry, Meghan to drop titles, retire as working royals

first_imgLONDON – Prince Harry and his wifeMeghan will no longer be working members of Britain’s monarchy and they willpay their own way in life as they embark on an independent future, BuckinghamPalace said on Saturday. Britain’s Prince Harry and his wife Meghan, Duchess of Sussex, leave Canada House in London, Britain on Jan. 7. REUTERS/TOBY MELVILLE/FILE PHOTO “Harry, Meghan and Archie will alwaysbe much loved members of my family,” Queen Elizabeth said in a statement issuedby the palace, referring to the couple’s baby son.   They will also no longer use their“Royal Highness” titles, the palace said in an announcement that sought to endturmoil in the monarchy sparked earlier this month when the couple announcedthey wanted to reduce their official duties and spend more time in NorthAmerica. Harry will remain a prince and thecouple will keep their titles of Duke and Duchess of Sussex as they begin a newlife split between North America and Britain, but they will not take part inany future ceremonial events or royal tours.(Reuters)last_img read more

Stunning Messi lookalike causes stir in Iranian city

first_imgAn Iranian student who bears an uncanny resemblance to the Barcelona star was taken to a police station after too many people wanted pictures with him.What would you do if you bore a resemblance to one of the most famous footballers on Earth?The race for the Golden ShoeIf you’re like Iranian student Reza Parastesh, and you look like Lionel Messi, you don the famous Barcelona No.10 jersey and walk about town.  Unfortunately for Parastesh, 25, the police in Hamadan had to impound his car and take him into the station to quell the stir caused when the lookalike — self-dubbed the “Iranian Messi” — prompted too many people to stop him for photos over the weekend.He got the idea from his dad a few months ago, after father asked son to pose in a replica Messi jersey. That led to Parastesh styling his hair — both facial and on his head — like the Argentine superstar.”Now people really see me as the Iranian Messi and want me to mimic everything he does,” Parastesh told AFP. “When I show up somewhere, people are really shocked.”I’m really happy that seeing me makes them happy and this happiness gives me a lot of energy.” Parastesh may have found himself a career imitating the Barcelona forward, with media appearances growing thanks to his newfound notoriety.last_img read more