Germany’s economy, Europe’s largest, will probably shrink by 9.8% in the second quarter, its biggest decline since records began in 1970, due to measures imposed to slow the spread of the novel coronavirus, the country’s leading think tanks said on Wednesday, Reuters reported. That would be more than double the drop seen in the first quarter of 2009, during the global financial crisis, the economic institutes said. Germany has been in virtual lockdown for several weeks.
Italian government bond yields rose on Wednesday after European Union finance ministers failed to agree a rescue package to help economies recover from the impact of the coronavirus outbreak, Reuters reported. Diplomatic sources and officials said a feud between Italy and the Netherlands over what conditions should be attached to euro zone credit for governments fighting the pandemic was blocking progress on half a trillion euros worth of aid.
The German and French economies are in the grip of historic recessions which are set to wipe out many years of growth in only a few months, according to forecasts published on Wednesday as leading bodies warned of the impact of the coronavirus crisis on the global economy and trade, the Financial Times reported.
Brazilian banks may have to extend a moratorium on loan payments by consumers and small businesses beyond an initial two-month time frame, Banco Bradesco SA’s chief executive said on Wednesday, as the coronavirus crisis squeezes Latin America’s biggest economy, Reuters reported. CEO Octavio de Lazari became the latest top Brazilian banker to warn that existing measures to help the country’s small businesses and consumers may need to last longer given the gravity of the crisis. In March, Brazilian banks paused retail debt payments for two months amid the crisis caused by the coronavirus.
The Belgian economy could contract by 8% this year due to measures to contain the coronavirus before a sharp rebound in 2021, the country’s central bank and national planning agency said on Wednesday, Reuters reported. That rebound could be as much as 8.6%, although the bank and agency said their figures should be seen as a broad macroeconomic “scenario” rather than a firm granular forecast and that they were based on a number of conditions, with risks.
Defaulted Lebanon gave the first glimpse of its restructuring plans by setting a goal of halving one of the world’s biggest debt burdens as early as this year and moving to a more flexible exchange rate, according to a draft document seen by Bloomberg. The government is discussing a reform plan submitted by the Finance Ministry and drafted by a group of advisers including other ministries and Lazard Ltd, Bloomberg News reported.
A looming economic crisis triggered by the coronavirus pandemic is a chance for India to enact sweeping reforms to fix ailing sectors and attract more foreign investment to the country, Bloomberg News reported. That’s a call being made by a former central banker and an ex-government official, as well as financial market participants, who say India needs to liberalize and deepen its financial markets, and take policy steps to fix the banking and farm sectors.
The coronavirus crisis is creating a new threat for Indonesia’s debt-laden state-owned businesses, Bloomberg News reported. Many had binged on debt for years, faced accusations of mismanagement and even corruption, and were running into repayment problems before the virus struck. Now a slump in revenues and a credit crunch triggered by the dollar’s surge mean those risks will get a whole lot worse. “Covid-19 is exacerbating some of the challenges of the state-owned sector,” said Xavier Jean, an analyst at S&P Global Ratings in Singapore.
Bankruptcies among Japanese companies rose for a seventh straight month in March as the coronavirus outbreak slammed the brakes on business activity across the country, Reuters reported. Tokyo Shoko Research, which tracks Japanese bankruptcies, said there were 740 in March, up 11.8 % from a year earlier. Among them, 12 firms went bankrupt due to the coronavirus pandemic as declines in inbound tourism hit sectors such as accommodation and restaurants, the research firm said.
Healthcare company NMC Health said on Wednesday it expects to be placed into administration in due course, following weeks of uncertainty relating to its debt levels and undisclosed shareholder dealings, Reuters reported. NMC said in a statement it was unable to reach agreement with its creditors despite strenuous efforts to address their concerns. Abu Dhabi Commercial Bank, one of the major lenders to NMC Health, filed an application earlier this month in a UK court to put the company into administration.