CNBC/Yen Nee Lee
Covid resurgence in some parts of Asia could threaten the region’s economic recovery
As 2020 draws to a close, many investors consider Asia as the region with one of the best economic prospects next year thanks to its relatively better control of the coronavirus outbreak.
But a recent surge in Covid cases in some countries threatens to dim the region’s economic outlook, some analysts have warned.
“For some of Asia’s giants, this year’s Covid-19 woes are unlikely to get any better when the clock strikes 12 on New Year’s Eve,” said research firm Pantheon Macroeconomics.
To be sure, daily reported cases in many parts of Asia — where the virus first hit — remain lower compared with those in Europe and the U.S., data compiled by Johns Hopkins University showed.
But some countries are now battling a resurgence far worse than what they experienced earlier in the pandemic. Even territories that had major successes in containing the virus may not be spared, with Taiwan this week reporting its first locally transmitted case since April 12 — underscoring the difficulty in eradicating Covid.
Gold climbs to one-week peak as dollar slips on U.S. stimulus
Gold prices rose as much as 1.3% on Monday, as the U.S. dollar slipped after the U.S. President Donald Trump signed a long-awaited pandemic aid bill, while liquidity remained low on account of the holiday season.
CNN Business/Hanna Ziady and Julia Horowitz
Brexit is finally done. It will leave the UK poorer
The United Kingdom and the European Union have agreed on a trade deal, closing the book on more than four years of uncertainty over how the country would conduct business with its biggest export market following Brexit.
UK companies are heaving a collective sigh of relief at retaining tariff-free trade with a market of 450 million consumers that buys more than 40% of Britain’s exports and provides more than half its imports. The country left the European Union on Jan. 31 but had continued to enjoy its previous trade privileges under transitional arrangements.
The deal spares the United Kingdom some of the most dire potential consequences from Brexit as it battles a crippling pandemic, and should give a short-term boost to the economy. But the trade agreement will still leave the country poorer at a time when it faces a jobs crisis and the worst recession in more than 300 years.
“The United Kingdom has chosen to leave the European Union and the single market, to renounce the benefits and advantages held by member states,” EU chief negotiator Michel Barnier told reporters. “Our agreement does not reproduce these rights and benefits, and therefore despite this agreement there will be real changes in a few days from now.”
The new relationship is expected to lead to a long-run loss of output of around 4% compared to remaining in the European Union, according to the UK Office for Budget Responsibility, which produces economic forecasts for the government. Leaving the EU’s single market and customs area means higher costs for UK companies, which could lead to higher consumer prices and even more job losses, as well as reduced export prospects, economists say.
Another drawback: The deal appears to mostly cover trade in goods, where the United Kingdom has a deficit with its EU neighbors, and excludes key service industries like finance, where it currently enjoys a surplus.
China will overtake US as world’s top economy in 2028, think tank says
China will overtake the United States to become the world’s biggest economy in 2028, five years earlier than previously estimated due to the contrasting recoveries of the two countries from the COVID-19 pandemic, a think tank said.
“For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China,” the Centre for Economics and Business Research said in an annual report published on Saturday.
“The COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour.”
The CEBR said China’s “skillful management of the pandemic”, with its strict early lockdown, and hits to long-term growth in the West meant China’s relative economic performance had improved.
China looked set for average economic growth of 5.7% a year from 2021-25 before slowing to 4.5% a year from 2026-30.
While the United States was likely to have a strong post-pandemic rebound in 2021, its growth would slow to 1.9% a year between 2022 and 2024, and then to 1.6% after that.
Japan would remain the world’s third-biggest economy, in dollar terms, until the early 2030s when it would be overtaken by India, pushing Germany down from fourth to fifth.