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Eurozone economy to crash 8.7% in 2020: EU forecast

Jul 07, 2020: The eurozone economy will plunge 8.7 percent in 2020 due to the coronavirus crisis, the European Commission said Tuesday in more pessimistic forecasts that do not see a complete rebound next year.

The new forecasts see the eurozone economy bouncing back by 6.1 percent in 2021, still leaving the region worse off than before the countries were forced to implement lockdowns in an attempt to contain the spread of COVID-19.

"The economic impact of the lockdown is more severe than we initially expected," said Commission Vice President Valdis Dombrovskis in a statement accompanying the release of the updated forecasts.

"Looking forward to this year and next, we can expect a rebound but we will need to be vigilant about the differing pace of the recovery," he added.

Germany, the EU's biggest economy, is expected to see a 6.3 percent contraction this year and 5.3 percent growth in 2021.

The economies of France, Italy and Spain will each contract by more than 10 percent, and then partially recover.

France, the eurozone's second-largest economy, is expected to contract by 10.6 percent this year and grow by 7.6 percent in 2021.

Italy, which should suffer a 11.2-percent drop this year, is only forecast to rebound by 6.1 percent in 2021.

Spain's economy is seen as contracting by 10.9 percent before bouncing back by 7.1 percent.

"The policy response across Europe has helped to cushion the blow for our citizens, yet this remains a story of increasing divergence, inequality and insecurity," said the EU's economy commissioner, Paolo Gentiloni.

"This is why it is so important to reach a swift agreement on the recovery plan proposed by the Commission -- to inject both new confidence and new financing into our economies at this critical time," he



Pakistan online shopping trends boost e-commerce sales during the...

Jul 07, 2020: Pakistan’s e-commerce and digital economy has registered a huge boost in sales during the coronavirus pandemic as shoppers’ physical mobility is limited, Arab News report said.

In recent years, the country has tried to expand the digitization of its economy through promoting online businesses in a bid to boost exports and create job opportunities for young people, the report said.

“We have received an overwhelming response… our data shows that online orders have grown by nine times [since March],” said Muhammad Ammar Hassan, chief marketing officer at Pakistan’s largest online shopping store.

“We are getting hundred percent year on year growth in each item … and this has even increased since March due to the coronavirus,” Hassan said.

Pakistan’s state bank claims that migration to electronic payments will stimulate consumption and trade, helping the country’s economy by as much as seven percent, creating four million jobs and boosting GDP by $36 billion by 2025, the report added.

Although the digital industry remains in its infancy stage in Pakistan, there has been a steady rise in e-commerce transactions and in the number of registered e-commerce merchants. Sales of local and international e-commerce merchants in Pakistan have increased to Rs 40.1 billion in 2018 from Rs 20.7 billion in 2017, according to the Ministry of Commerce.

“These figures do not include all the post-paid, cash-on-delivery transactions which account for 60 percent of the total value of e-commerce in Pakistan,” Aisha Humera Moriani, joint-secretary at the Ministry of Commerce said in interview with Arab News.

The government is also developing an international payment gateway that will be integrated with other online payment companies, like PayPal, to facilitate incoming payments to boost exports and facilitate freelancers.

“COVID-19 has pushed back development of the payment gateway, but we will be trying to roll it out as soon as possible,” said Shabahat Ali Shah, chief executive officer at the National Information Technology Board.

Businessmen said that the encouraging online sales figures would grow further if the government offered tax incentives and ensured regulation for Pakistan’s e-commerce platforms, as numbers of people visiting shopping malls and retail outlets trickles to a near-halt.

“The footfall on stores and shopping malls has declined up to 80 percent after the outbreak of the coronavirus while revenue of the retail business has been reduced to only 25 percent,” said Rana Tariq Mehboob, chairman for Pakistan’s Chainstore Association which represents 200 of the country’s most prominent retailers.

He said that an overall 60 percent decline in sales had been registered at brick and mortar stores since March, as most shoppers switched to buying online.

“This [online shopping] has increased drastically,” he said.

“The majority of our revenue is from online now, the online business has grown up to 50 percent”

Mehboob said many brands in his association were mulling shutting down their brick and mortar establishments after August to cut down on expenses and to focus instead on boosting their businesses online.


Hugo Boss places its first order of sportswear to...

July 07, 2020 (MLN): German Fashion House Hugo Boss has placed its first order of sportswear to a Pakistani company.

Advisor to PM, Abdul Razak Dawood announced on his official twitter account that this achievement was not possible without the efforts of Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) for holding the 35th IAF Fashion Convention in Nov last year, in Lahore.

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PKR depreciates by 23 paisa at interbank trade

July 07, 2020 (MLN): Pakistani rupee (PKR) depreciated by 23 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 166.95 per USD, against yesterday's closing of PKR 166.72 per USD.

The rupee traded within a very narrow range of 65 paisa per USD showing an intraday high bid of 167.00 and an intraday Low offer of 166.55.

Within the Open Market, PKR was traded at 166.30/167.50 per USD.

Meanwhile, the currency lost 13 paisa to the Pound Sterling as the day's closing quote stood at PKR 208.33 per GBP, while the previous session closed at PKR 208.19 per GBP.

Similarly, PKR's value weakened by 13 paisa against EUR which closed at PKR 188.29 at the interbank today.

On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation in which it injected Rs.117 billion for 3 days at 7.07 percent.

The overnight repo rate towards close of the session was 7.50/7.75 percent, whereas the 1 week rate was 7.05/7.10 percent.

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Inflow of $15 million in T-bills & PIBs has...

July 7, 2020 (MLN): Pakistan witnessed an inflow of $15.11 million by foreign investors via Special Convertible Rupee Account (SCRA) in government debt securities in first three days of FY21.

The total inflows in Treasury bills (T-Bills) during first three days of the ongoing month recorded at $10 million whereas, inflows in PIBs logged at $5 million. These investments in debt instrument had been injected by UK investors.

With regards to equity investment, inflows during the said period were recorded at $2.1 million while outflows stood at $10 million, bringing the total net inflow by overseas investors to clock in at $7.2 million in FY21 so far.

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