ECB Executive Board member Benoît Cœuré warned of “consequence of protectionism” in a speech at a workshop today.
A few from the speech to note:
- “Greater global economic integration has boosted living standards worldwide and lifted millions out of poverty.”
- “Winding back globalisation is the wrong solution.” And, “a retreat from openness will only fuel more inequality as import prices rise, goods become dearer and real incomes fall.”
- “The distributional and social effects of greater economic integration should rather be addressed by targeted policies that achieve fairer outcomes.”
- “By allowing Member States to recover some of the state functions that have been eroded by globalisation, the European Union is a vehicle that brings the benefits of economic openness to the greatest number of its citizens while protecting them against untrammelled global forces. It represents the most progressive model we have for taking back control of globalisation by addressing people’s concerns over open markets and fair competition – doubts that individual countries on their own cannot dispel.”
Japan PMI services dropped to 33.8, GDP contracting at 8% annualized rate
Japan PMI Services dropped to 33.8 in March, down from 46.8. The index was close to record low seen in February 2009 (33.7). PMI Composite dropped to 36.2, down from 47.0. Markit said that output fell at near record pace as coronavirus pandemic hits demand. Employment declined as operating requirements slumped. Also, business activity was expected to fall sharply over the coming 12 months.
Joe Hayes, Economist at IHS Markit, said, latest data showed that the economic impact from coronavirus pandemic “has become widespread”. The sharp fall signals “how aggressive and sudden the drop in activity has been”. The combined manufacturing and services PMI already point to “GDP contracting at an annual of around 8%”. If the outbreak were to escalate in Japan, Q2 GDP could be “poised for an annual decline in excess of 10%”.
Full release here.