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Friday, Apr 03, 2020

The Pulse:Hong Kong's Budget & the impact of the coronavirus on the global economy

On Wednesday, the World Health Organisation declared the coronavirus outbreak to be a pandemic as cases outside of China surged 13-fold in two weeks. The virus has spread to well over a hundred countries. Italy, Europe’s worst affected country, on Monday announced a national lockdown of its 60 million residents.
The United States is suspending all travel from Europe with the exception of the United Kingdom. World stock markets were hit hard this week with share prices plunging faster than at any time since 1987.

Inevitably all this is delivering multiple blows to Hong Kong’s economy, already hit by months of protests. The government warns unemployment is likely to hit 2003 levels of up to 5%, compared with the current 3.3%.

On Monday, the impact of Covid-19 and an oil price war between Saudi Arabia and Russia sent stock markets into freefall. Countries around the world are struggling to come up with plans to reduce the economic fallout from the pandemic. The World Bank has pledged US$12 billion in emergency aid.

Central banks in the United States, United Kingdom, Canada and Australia have lowered interest rates. Last month’s budget in Hong Kong, saw the government rolling out a HK$120 billion (US$15.4 billion) relief package.
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