Tag Archives: world economy

Pandemics, War, Trade Wars; the road ahead will be rough

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Why It Seems Everything We Knew About the Global Economy Is No Longer True
  • “Nearly all the economic forces that powered progress and prosperity over the last three decades are fading,” the World Bank warned in a recent analysis. “The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world.”
  • A lot has happened between then and now: A global pandemic hit; war erupted in Europe; tensions between the United States and China boiled. And inflation, thought to be safely stored away with disco album collections, returned with a vengeance.
  • But as the dust has settled, it has suddenly seemed as if almost everything we thought we knew about the world economy was wrong.

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Beijing’s New World Order – Living the ‘Chinese Dream’

Ecclesiastes 5:8 If you see the poor oppressed in a district, and justice and rights denied, do not be surprised at such things; for one official is eyed by a higher one, and over them both are others higher still

Important Takeaways:

  • As Beijing boosts its diplomatic clout, analysts say it wants to “remold” and even supplant existing global institutions.
  • Ever since China abandoned its zero-COVID policy at the end of last year, Beijing has been involved in a flurry of engagements from East to West.
  • And while Western leaders have talked about decoupling or de-risking economic ties with China, the nation remains deeply integrated with the world economy and is the largest trading partner of more than 120 countries.
  • “It would be a world order that does not constrain communist China but contributes to its rise,” he said.
  • Beijing’s world order would be defined by multipolarity, according to Mok, who says China has no plan to be a dominant power. “I don’t see a change in the world order being a case of a new boss simply replacing the old boss.”

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The World Economy is heading the wrong direction

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • World Economy Heads for One of Its Worst Years in Three Decades
  • The world economy is facing one of its worst years in three decades as the energy shocks unleashed by the war in Ukraine continue to reverberate, according to Bloomberg Economics.
  • In a new analysis, economist Scott Johnson forecasts growth of just 2.4% in 2023. That’s down from an estimated 3.2% this year and the lowest — excluding the crisis years of 2009 and 2020 — since 1993.

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Oil is $100 per barrel. J.P. Morgan warns a run up to $150 could stall world economy

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • $100 Oil Threatens to Compound World Economy’s Inflation Shock
  • Oil’s surge toward $100 a barrel for the first time since 2014 is threatening to deal a double-blow to the world economy by further denting growth prospects and driving up inflation.
  • More broadly, JPMorgan Chase & Co. warns a run-up to $150 a barrel would almost stall the global expansion and send inflation spiraling to over 7%, more than three times the rate targeted by most monetary policy makers.
  • China, the world’s biggest oil importer and goods exporter, has so far enjoyed benign inflation. But it’s economy remains vulnerable as producers are already juggling high input costs and concerns over energy shortages.

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Gas price surge, just one more headwind for world economy

By Dhara Ranasinghe

LONDON (Reuters) – Soaring gas prices that threaten to push up winter fuel bills, hurt consumption and exacerbate a near-term spike in inflation are another blow to a world economy just getting back on its feet after the coronavirus shock.

The gas market chaos, which has driven prices 280% higher in Europe this year and led to a 100%-plus surge in the United States, is being blamed on a range of factors from low storage levels to carbon prices to reduced Russian supplies.

So high are tensions that several European Parliament lawmakers have demanded an investigation into what they said could be market manipulation by Russia’s Gazprom.

Whatever the causes, the surge carries major market implications:

1/GROWTH

Analysts say it’s too early to downgrade economic growth forecasts but a hit to economic activity looks inevitable.

Morgan Stanley reckons the impact in the United States, the world’s biggest economy, should be small. While over a third of U.S. energy consumption in 2020 was supplied by natural gas, users were predominantly industrial, it notes.

Overall though, higher gas prices raise the risk of stagflation – high inflation, low growth.

“It is quite clear there is a growing sense of unease about the economic outlook as a growing number of companies look ahead to the prospect of rising costs,” said Michael Hewson, chief market analyst at CMC Markets.

2/INFLATION

Euro zone wholesale power prices are at record highs, potentially exacerbating inflation pressures inflicted by COVID-related supply bottlenecks. In Germany, 310,000 households face an 11.5% increase in gas bills, data showed on Monday.

Noting German factory gate prices were already the highest since 1974, Citi analysts predicted 5% hikes for electricity and gas prices in January, adding 0.25 percentage points to consumer inflation next year.

Higher food costs are another side effect, given a shortage of carbon dioxide which is used in slaughterhouses and to prolong the shelf-life of food. Cuts in fertilizer production could also lift food prices.

Goldman Sachs predicts higher oil demand, with a $5 per barrel upside risk to its fourth-quarter 2021 Brent price forecast of $80 a barrel. Brent is trading at about $74 currently.

3/CENTRAL BANKS

Central banks are sticking with the line that the spike in inflation is temporary — European Central Bank board member Isabel Schnabel said on Monday she was happy with the broad-based rise in inflation.

But as market- and consumer-based measures of inflation expectations rise, gas prices will be on central banks’ radar.

“If we have higher inflation, transitory or structural, and have slower growth – it will be a very tricky situation for markets and central banks to assess, navigate and communicate,” said Piet Haines Christiansen, chief strategist at Danske Bank.

This week’s central bank meetings could test policymakers’ resolve. The Bank of England meeting on Thursday is in particular focus, given UK inflation has just hit a nine-year high.

With UK producer price inflation soaring, shipping costs showing little sign of cooling, commodity prices higher up and job vacancies tipping 1 million, there is a growing chance that higher prices will stick around for longer, said Susannah Streeter, senior analyst at Hargreaves Lansdown.

“If they do, more (BoE) members may move quickly to vote for a rate rise sooner than expected next year, but it would be an unpopular course of action with looming tax rises already hard to digest for many consumers,” she said.

4/ STATE BAILOUTS

Britain is considering offering state-backed loans to energy firms after big suppliers requested support to cover the cost of taking on customers from companies that went bust under the impact of gas prices. One firm, Bulb, is reportedly seeking a bailout.

France meanwhile plans one-off 100 euro ($118) payments to millions of households to help with energy bills.

“The story emerging from the UK energy sector will soon be more relevant to the European market than Evergrande,” said Althea Spinozzi, senior fixed income Strategist at Saxo Bank.

And in a week packed with central bank meetings, she added that markets were “right to fret.”

5/COMPANIES

Spain shocked the utility sector last week by redirecting billions of euros in energy companies’ profits to consumers and capping increases in gas prices. Revenue hits at Iberdrola and Endesa were estimated by RBC at one billion euros and shares in the companies sold off heavily.

Since the move, investors have fretted about contagion to other countries, Morgan Stanley said. While seeing those fears as overdone, the bank acknowledged there was a risk of margin squeezes at European utilities in coming months.

Sector shares are down for the third week straight

(Reporting by Dhara Ranasinghe; graphics by Saikat Chatterjee and Dhara Ranasinghe; additional reporting by Yoruk Bahceli and Sujata Rao; Editing by Sujata Rao and Hugh Lawson)

Scarred and scared: post-Covid consumers not their old selves

By Mark John

LONDON (Reuters) – Michael Clark of Amy’s Housewares has one big fear as its London stores prepare to reopen on June 15 along with other retailers around Britain: “Customers not spending, having no trust in the economy.”

His concern, captured in a survey by the British Independent Retailers Association (BIRA) before a nationwide easing of social distancing measures, may be well-founded.

Across the world, consumers are emerging from lockdowns warier and more thrift-conscious than before. That will drag on any recovery and could encourage governments and central bankers to follow up on coronavirus handouts with more costly stimulus.

The new thrift is showing up in various ways: some households are hoarding the cash they saved during lockdowns; some are flocking to cheaper brands or sticking with essentials.

GRAPHIC: Savings rates in Europe rise Savings rates in Europe rise – https://graphics.reuters.com/ECONOMY-EU/SAVINGS/yxmvjkqlnpr/chart.png

Other risks to consumer demand include the outright collapse of purchasing power among those whose livelihoods were ruined by the pandemic and even imponderables such as what happens to spending patterns if more people continue to work from home.

In China, shopping malls began to fill up again from April after lockdown eased. Online sales have surged in some categories, often helped by discounts and state coupons.

But a lingering wariness about items deemed non-essential means consumers may still not emerge as the pillar of growth which Beijing hopes they will be.

“Consumers are placing a greater focus on essential spending categories,” Fitch Solutions said in a June 4 report, predicting a fall in Chinese household spending this year and slashing its 2020 growth forecast to just 1.1% from 5.6% before the pandemic.

DOLLAR STORE CLIENTELE GROWS

In the United States, commonplace brands such as chocolate giant Hershey or toothpaste-maker Colgate say consumers have traded down. Dollar stores, meanwhile, expect to open their doors to a new set of customers as they did after the 2008-09 Great Recession.

“In 2008, folks lost jobs … and they found us. And I think that’s some of what we’re planning for as we take a look into our crystal ball at back half of the year and 2021,” Dollar Tree Chief Executive Gary Philbin said on May 28.

Much hangs now on what happens to the mountain of savings built up by those U.S. households which weathered the worst of the lockdown fall-out and have pushed the overall U.S. savings rate to a record 33% of income.

GRAPHIC: Savings rates in the U.S. rise – https://graphics.reuters.com/ECONOMY-USA/SAVINGS/nmovakbjdva/chart.png

While that rate will fall, those who expect cash to flood back into the economy may be disappointed. A 2012 paper by IMF researchers found that lingering uncertainty after the onset of the 2008-09 recession boosted saving rates durably, leading to lower consumption and growth in the wider economy.

Moreover many U.S. households are about to suffer “income cliffs” with one-off tax rebates expiring in May and pandemic unemployment compensation ending in July, Oxford Economics said, forecasting lower household income through the rest of the year.

“This will likely act as a constraint on the consumer spending recovery well into 2021,” it said in a June 3 note.

Such a scenario could force policy makers across the world to encourage savers to spend by speeding up moves to ease lockdowns, offering more economic support or pushing interest rates further towards, and even into, negative territory.

The same dilemma exists in Europe. The European Central Bank expects household savings to rise six points to 19% of income this year and remain high next year due to what economists call “scarring”, when an event leaves a durable impact on behaviour.

Citing the risk of cash-hoarding, French Finance Minister Bruno Le Maire has called for direct incentives to boost demand. The budget he will present next week will forecast a drop in consumer spending of 10% this year as households amass savings.

Germany has announced a cut in valued-added tax for the second half of the year to drive consumption, coupling that with cash handouts to parents.

Presenting hefty downgrades of the bank’s eurozone growth protections on Thursday, ECB President Christine Lagarde said the depth of scarring of domestic demand was one big factor that will determine the size of the contraction and recovery to come.

She warned: “Overall, the (ECB) Governing Council sees the balance of risks … to the downside.”

(Additional reporting by Reuters bureaux; editing by Philippa Fletcher)

Factbox: Latest on the worldwide spread of the coronavirus 5-25-20

(Reuters). – * The number of deaths in the United States from the new coronavirus was heading towards the 100,000 mark.

The U.S. Centers for Disease Control and Prevention said on Saturday that the toll had risen 1,852 to reach 96,002. It also reported 1,595,885 cases, an increase of 24,268 from its previous count.

* British Prime Minister Boris Johnson backed his senior adviser Dominic Cummings on Sunday, despite calls from within his own Conservative Party for the aide to resign for traveling 250 miles during the coronavirus lockdown. Cummings, who masterminded the 2016 campaign to leave the European Union, came under pressure after it emerged that he had traveled from London to Durham in late March when Britain was under a strict lockdown to combat the coronavirus outbreak.

* Americans flocked to beaches and outdoor areas on Saturday, snarling roadways and forcing some closures on the Memorial Day weekend after weeks in lockdown.

In Destin, Florida, The Back Porch restaurant was full. In Arizona, holidaymakers flooded Interstate-17, causing a 15-mile backup on the highway used to reach some of the desert’s most beautiful canyons.

President Donald Trump played golf at his Trump National club in northern Virginia.

DEATHS AND INFECTIONS

* More than 5.27 million people were reported to have been infected globally with the virus and 339,267 have died, according to a Reuters tally.

* For an interactive graphic tracking the global spread, open https://tmsnrt.rs/3aIRuz7 in an external browser.

* For a U.S.-focused tracker with state-by-state and county map, open https://tmsnrt.rs/2w7hX9T in an external browser.

 

EUROPE

* Russia on Sunday reported 153 coronavirus deaths over the previous 24 hours, the epidemic’s highest daily toll there, raising total fatalities to 3,541, its coronavirus crisis response center said. It also said 8,599 new cases had been documented, fewer than on the previous day, pushing the nationwide tally of infections to 344,481.

* The University of Oxford’s COVID-19 vaccine trial has only a 50% chance of success as the coronavirus seems to be fading rapidly in Britain, the professor co-leading the development of the vaccine told the Daily Telegraph newspaper.

Adrian Hill, director of Oxford’s Jenner Institute, which has teamed up with drugmaker AstraZeneca Plc to develop the vaccine, said that an upcoming trial involving 10,000 volunteers threatened to return “no result” due to low transmission of COVID-19 in the community.

* First indications of the effectiveness of a potential vaccine against coronavirus may be available in the autumn, the head of the GAVI vaccine alliance told a Swiss newspaper, forecasting a long road from there to broad availability.

* Spain will reopen its borders to tourists in July and its top soccer division will kick off again in June, the prime minister said, marking another phase in the easing of one of the world’s strictest lockdowns. Pedro Sanchez’s announcements coincided with calls for his resignation over the lockdown’s impact on the economy from the far-right Vox party, which called protests in cities across Spain drawing thousands of horn-blaring cars and motorbikes.

* The public returned to St Peter’s Square on Sunday to receive Pope Francis’s blessing from his window for the first time in nearly three months. The few dozen people kept to social distancing rules and most wore masks.

* Police arrested about 60 protesters on Saturday as part of city-wide demonstrations against restrictions due to the coronavirus pandemic, German newspaper Tagesspiegel reported.

The protesters had violated official guidelines to keep the virus contained, and some had attacked police officials, the newspaper said.

AMERICAS

* Americans flocked to beaches and outdoor areas on Saturday, snarling roadways and forcing some closures on the Memorial Day weekend after weeks in lockdown. President Donald Trump played golf at his Trump National club in northern Virginia.

* Mexican health authorities registered 3,329 new cases of the novel coronavirus and 190 new deaths, a health official said on Saturday, bringing the total number to 65,856 cases and 7,179 deaths.

* Argentina extended until June 7 a mandatory lockdown in Buenos Aires on Saturday and tightened some movement restrictions, after a steady increase in the city’s confirmed coronavirus cases in recent days.

ASIA-PACIFIC

* Three large Indian states have sought to delay the planned opening of their airports on Monday as new cases of the novel coronavirus jumped, complicating the federal government’s plan to resume flights after a two-month lockdown.

India registered 6,767 new cases of the novel coronavirus on Sunday, its biggest 24-hour rise yet, taking the total to over 131,000.

* The Philippines’ tally of coronavirus cases surpassed 14,000 on Sunday and the number of fatalities rose to 868, the health ministry said.

* China recorded no new confirmed COVID-19 cases on the mainland for May 22, the first time it had seen no daily rise in the number of cases since the pandemic began in the central city of Wuhan late last year.

* Coronavirus cases in Singapore topped 30,000 as the city-state reported hundreds of new infections in cramped migrant worker dormitories every day. In Malaysia, a new cluster of coronavirus infections has broken out a detention center for undocumented migrants, authorities said.

MIDDLE EAST AND AFRICA

* Finance minister Mohammed al Jadaan said Saudi Arabia’s economy is solid and has the ability to deal with the coronavirus crisis despite the need to cut spending.

* Underground production at AngloGold Ashanti’s Mponeng mine in South Africa will remain shut down until further notice after 53 employees tested positive for the coronavirus, the provincial health department said.

* A 107-year-old Iranian woman who was infected with the new coronavirus has recovered, Iran’s Fars news agency reported.

* Zambia’s information minister Dora Siliya said she had tested positive for the coronavirus but was asymptomatic and had gone into self-isolation.

“Even after taking all precautions…yesterday I did test positive for COVID-19,” she said on social media.

ECONOMIC FALLOUT

* Chinese lenders could post flat or even falling profits in 2020 despite earnings growth in the first quarter as the coronavirus outbreak brings difficulties to the economy, the central bank said. For the first quarter of 2020, China’s commercial banks realized net profits of 600.1 billion yuan ($84.2 billion), up 5% year-on-year, mainly due to the expansion of banks’ assets and lower management costs, according to an article by the research bureau of the People’s Bank of China.

The possibility could not be ruled out that banks could log zero or even negative profit growth within 2020, due to mounting bad loans and a fast-draining of cash buffers, as the difficulties in the real economy spills over into the financial area, the PBOC said.

* France’s state debt to gross domestic product (GDP) ratio is set to increase to more than 115% by the end of the year due to the cost of coronavirus crisis measures, Budget Minister Gerald Darmanin said.

* Car rental firm Hertz Global Holdings Inc HTZ.N filed for bankruptcy protection after its business was decimated during the coronavirus pandemic and talks with creditors failed to result in much needed relief. The firm is reeling from government orders restricting travel and requiring citizens to remain home.

(Compiled by Angus MacSwan; Editing by John Stonestreet)

Take Five: Coronavirus vaccine race is on

(Reuters) – U.S. President Donald Trump has put his faith in anti-malarial drug hydroxychloroquine to ward off COVID-19, but governments and investors are focusing on a vaccine. Without one, it’s unlikely economic activity can resume fully.

So the race is on, and the rewards are rich: AstraZeneca has vaulted into the position of the most valuable British company after receiving a U.S. pledge for up to $1.2 billion for its experimental vaccine.

Pharma/biotech shares have outperformed broader equities since Feb 19. Investors twitchy for vaccine news sent the share price of biotech company Moderna 20% higher when it said its vaccine trials showed promise. Rivals Novavax and Inovio also rose when they secured vaccine development funding.

The United States has vaccine development deals with Johnson & Johnson and Sanofi, too. But many others, big and small, are in the race: Imperial College, Gilead Sciences, Roche, China’s CanSino Biologics and India’s Glenmark to name just a few.

THE RUBICON

European clashes over how to handle the economic impact of the COVID-19 crisis raised fears for the bloc’s future, but a Franco-German proposal aimed at helping the worst-hit states represents a pivotal moment. The markets want to see the details, however. All eyes will be on the European Commission, which on Wednesday presents its pandemic recovery plan.

The task is to ensure weaker states such as Italy can access funding without adding to their debt burden. But EU states remain divided over whether recovery funds should be funneled through loans or transfers. If those opposed to big-spending manage to water down the plan, the euro and southern European bonds will take a knock.

The change in Germany’s previously hardline stance was momentous. Now it’s the turn of others such as Austria and the Netherlands to decide whether they are ready to cross the Rubicon.

TRYING TIMES

Beijing’s control has long been a sore point for some Hong Kongers. Its latest proposal for a tougher national security regime for the city will almost certainly lead to further violent confrontations on the streets and open a new venue for Sino-U.S. tension.

Only this time it may be worse, which is why the Hang Seng index was hit harder on Friday than even the worst days in the March selldown. China has replaced the leadership in its Hong Kong Liaison office and, foreign envoys reckon, quietly doubled the number of staff there.

The United States has already warned of a tough response. Investors will look there, and to the situation on the ground for cues. As for markets, Hong Kong’s property index posted its worst drop in 11.5 years on Friday. European luxury shares and banks such as HSBC also took a hammering on Friday, meaning ripples could spread.

CLOUD STOCKS FLOAT HIGHER

Coronavirus is a double-edged sword for cloud-computing firms. It has supercharged demand for data center services to support video-streaming and other remote services but is also forcing corporates to slash budgets amid a deep recession.

Cloud computing players take the spotlight on Wall Street in the coming days as they report quarterly results and guide investors on the outlook. Autodesk and Workday report on Wednesday. Salesforce.com  – viewed as the gold standard – follows on Thursday, along with systems software seller VMWare.

The First Trust Cloud Computing index ETF  has gained over 10% in 2020, although some big-name cloud-computing stocks have yet to fully recover from their March lows.

DOOM AND GLOOM

Armed with less fiscal firepower and weaker healthcare systems than richer peers, emerging economies have been less able to counter coronavirus-induced drops in consumption, foreign investment and exports, or alleviate the effects of job losses.

That strain shows up in economic data, not least the 6.8% Q1 contraction in China’s economy, the biggest in decades. Soon four other emerging market heavyweights – Turkey, Mexico, Brazil and India – will tell us how their growth fared in the January-April quarter.

Expect gloomy readings. India, not long ago, the fastest-growing big economy, is expected to have expanded 2% in Q1; Turkey’s economy is seen contracting this year for the first time in over a decade. For Brazil and Mexico Goldman Sachs predicts full-year contractions of 7.4% and 8.5% respectively.

(Reporting by Sujata Rao, Dhara Ranasinghe and Tom Arnold in London, Tom Westbrook in Singapore and Lewis Krauskopf in New York; Editing by Hugh Lawson)

What you need to know about the coronavirus right now

(Reuters) – Here’s what you need to know about the coronavirus right now:

Back on the road

The U.S. auto industry is slowly returning to life with assembly plants scheduled to reopen on Monday and suppliers gearing up in support as the sector that employs nearly 1 million people seeks to recover from the coronavirus pandemic.

General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV (FCA) all have been preparing for weeks to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity.

The reopening will be a closely watched test of whether workers across a range of industries can return to factories in large numbers without a resurgence of infections.

Hitting new lows

Japan’s economy became the world’s largest to slip into recession after the pandemic, first-quarter data showed on Monday, putting the nation on course for what could be its deepest post-war slump.

The GDP numbers underlined the broadening impact of the outbreak, with exports plunging the most since the devastating March 2011 earthquake as global lockdowns and supply chain disruptions hit shipments of Japanese goods.

But analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close.

China on alert for new wave

While much of the rest of the world is experimenting with easing restrictions, one Chinese province is back in a partial lockdown after a spate of infections.

Jilin in the northeast reported two more confirmed cases over the weekend to take its total number of new infections to 33 since the first case of the current wave was reported on May 7. Separately, the financial hub of Shanghai reported one new locally transmitted case for May 17, its first since late March.

Pop-up carparks

Australia’s most populous state New South Wales encouraged its residents to avoid peak-hour public transport as it began its first full week of loosened lockdown measures, which saw people heading back to offices.

To help with maintaining social distancing, extra bicycle lanes and pop-up car parking lots will be made available, officials said.

“We normally encourage people to catch public transport but given the constraints in the peak…, we want people to consider different ways to get to work,” state premier Gladys Berejiklian told reporters in Sydney.

Furloughs no cure-all

Temporary unemployment schemes have spread far wider and faster than during the 2008-2009 global financial crisis, but are not likely to save jobs in sectors which face a tougher recovery post-pandemic, such as leisure and tourism.

These schemes, which typically provide at least 80% of pay for workers for whom there is no work now, mean companies do not face firing and potential re-hiring costs. Workers are more inclined to keep spending and so help prop up the economy.

“If it’s more than a year, you need other solutions and will need other policies like retraining,” said Gregory Claeys, senior fellow at economic think-tank Bruegel. “It’s good in a lockdown, but if there is more social change, you need alternatives.”

(Compiled by Karishma Singh and Mark John; Editing by Mark Heinrich)

With over a million coronavirus cases, economic freefall looms

By Cate Cadell and Lisa Shumaker

BEIJING/NEW YORK (Reuters) – Global cases of the new coronavirus have shot past 1 million with more than 53,000 fatalities, a Reuters tally showed on Friday, as death tolls soared in the United States and western Europe while the world economy nosedived.

In the space of just 24 hours, 6,095 infected people died – nearly twice the total number of deaths in China, where the virus and COVID-19, the disease it causes, originated.

Atop the grim tally of officially reported data are Italy, with 13,915 deaths, and Spain, with 10,935. But the United States is becoming the new epicentre, with 243,635 cases – by far the most of any nation – and 5,887 deaths.

In China, where draconian containment measures stabilised the epidemic, coronavirus “martyrs” will be mourned on Saturday with a three-minute silence.

Though the official figures are shocking enough, health experts and even some governments acknowledge they do not capture the full spread. The virus mostly goes undetected in people with minor symptoms or none at all.

With airlines largely grounded, businesses closed, layoffs mounting and millions of people under lockdown, the economic fallout is set to be worse than the 2008 financial crisis.

Rather, comparisons are being drawn with such traumatic periods as World War Two or the 1930s global Depression.

ECONOMIES IN FREEFALL

Morgan Stanley predicted that the U.S. economy, the world’s biggest, would shrink 5.5% this year, the steepest drop since 1946, despite an unprecedented aid package. An eye-watering 38% contraction is predicted for the second quarter.

The bank said Britain was heading for a slump that could be worse in the short term than the 1930s.

Global stocks slipped, but then recovered as Wall Street headed into positive territory in morning trade.

Morgues and hospitals in New York City were struggling to treat or even bury victims of the virus, and state governor Andrew Cuomo predicted similar misery for the rest of the country.

Staff at one medical centre in Brooklyn were seen disposing of gowns and caps in a sidewalk trash can after loading bodies into a refrigerated truck.

After initially playing down the crisis, U.S. President Donald Trump’s administration was set to advise Americans to wear masks if venturing out.

Spain and Italy were also counting their daily dead, but prayed they were plateauing as data at least showed a slowdown in daily increases.

Some 900,000 Spanish workers have lost their jobs. Double that number have done so in Turkey, the opposition said.

Britain, accused by the opposition of being slow to respond to the threat of the virus, unveiled a hospital installed in an exhibition centre in under two weeks to provide thousands of extra beds, and promised a tenfold increase in testing.

But Prime Minister Boris Johnson’s extended self-isolation, after testing positive, was a reminder of the risk.

In a video message from Downing Street, he said he still had fever.

In France, the government did something that was shunned even in wartime, cancelling the end-of-high-school “baccalaureat” exam for the first time since its inception in 1808 under Napoleon Bonaparte.

DISASTER FOR DEVELOPING WORLD

While prosperous nations reel, there are fears of potentially far worse impact in places already struggling with poverty, insecurity and weak health systems.

In Iraq, three doctors and two officials said there were thousands of cases, many times more than publicly reported.

In India, many poor labourers were desperate, and hungry, after losing jobs in a lockdown ordered at four hours’ notice by Prime Minister Narendra Modi.

“I’m very sure that he works only for the big people and not for a man like me,” said former Modi supporter Ravi Prasad Gupta, laid off from a pipe plant.

Aware that religious gatherings have in some parts aided the virus’s spread, both Pakistan and Bangladesh sought to stop people going to mosques for Friday prayers, while Saudi Arabia imposed a curfew in the holy cities of Mecca and Medina.

Though there was little cause for cheer anywhere, one positive offshoot of the crisis has been a massive drop in atmospheric pollution. One expert said carbon dioxide emissions could fall this year by the largest amount since World War Two.

New Google data from mobile phones in 131 countries showed huge changes in human behaviour as people are told to stay home and businesses shut. For example, in Italy and Spain, visits to retail and recreation locations including restaurants and cinemas plunged 94% in March.

But authorities are still nervous about public criticism in many places, not only authoritarian states.

The U.S. Navy relieved the captain of the aircraft carrier Theodore Roosevelt of his command on Thursday, punishing him for the leak of a scathing letter to superiors seeking stronger measures to a curb a coronavirus on board.

(Reporting by Reuters bureaux worldwide; Writing by Daniel Wallis and Andrew Cawthorne; Editing by Howard Goller and Kevin Liffey)