Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman today said that the COVID Emergency Credit Facility covers all companies and not just MSMEs. Addressing the FICCI National Executive Committee members, Smt Sitharaman assured the industry of all possible Government support with the intent of supporting Indian business and reviving the economy, and said, “We are committed to support/intervene if any of your members have a problem”. On the question of liquidity, the Finance Minister said, “We have fairly clearly addressed the issue of liquidity. There is definitely the availability of the liquidity. We will look into it if there are still issues.” Smt Sitharaman also said that every Government department has been told to clear dues and if there is any issue with any department, the government will look into it. The Finance Minister also said that the Government will consider an extension in the deadline for availing the 15% corporate tax rate on new investments. “I will see what can be done. We want industry to benefit from the 15% corporate tax rate on new investments and I take your point for considering an extension in the deadline of 31st March, 2023,” Smt Sitharaman said. The Finance minister suggested the industry to submit their recommendations related to the ministry of corporate affairs or SEBI deadlines so that necessary steps could be taken. With regard to the need for reduction in GST rates in the badly affected sectors, She said, “GST rate reduction will go to the Council. But the council is also looking for revenue. The decision for reduction in rate for any sector has to be taken by the Council".Finance and Revenue Secretary Mr Ajay Bhushan Pandey informed FICCI members that Income Tax Refund to the corporates have also started and I-T refunds to the tune of Rs 35,000 crore have been issued in the last few weeks. The meeting was also attended by the Secretary Expenditure Mr T V Somanathan , Economic Affairs Secretary Mr Tarun Bajaj, Corporate Affairs Secretary Mr Rajesh Verma , Department of Financial Services Secretary Mr Debasish Panda and Chief Economic Advisor Dr K V Subramanian. FICCI President Dr Sangita Reddy informed the Finance Minister that the chamber is in constant touch with different government departments to support the implementation of the measures announced to deal with the COVID-19 impact. “FICCI is committed to the common goal of Atmanirbhar Bharat and working with the government in enhancing implementation,” Dr Reddy added.
Source: PIB
Carpet exporters, struggling to regain foothold in a global market disrupted by the Covid-19 pandemic and facing huge liquidity problems, have asked the government to expedite the release of pending duty drawback claims and GST refund payments. In a recent virtual meeting with Textile Minister Smriti Irani, the sector also made a case for a cap on rising air freight charges and sought permission to hold a virtual global fair. “Our duty drawback and GST refunds are pending for four-six months which has put a strain on carpet manufacturers who don’t have enough finances to carry on their businesses. We urged the Textile Ministry to ensure that the promise made to us earlier by the Finance Ministry for early release of the pending money is honoured,” said Siddh Nath Singh, Chairman, Carpet Export Promotion Council. Singh pointed out that the Customs department was asking exporters to send their shipment agents to get the payment cleared which was totally unwarranted. “When export consignments are sent, the Customs officials check all document and goods before issuing the shipping bill. Why do they now need an agent to answer additional queries before releasing payment?” Singh said. Since the government partially lifted the lockdown restrictions, many carpet units have re-started work but business had shrunk to less than one-fourth of normal times. “Our main buyers are the US and Europe. The US was already stressed due to Covid-19 and now it is also facing disruptions due to protests. Demand in Europe has also not been restored. Most units that are working are mainly delivering older orders,” Singh said. Carpet exports fell a steep 90 per cent in April to ₹68.18 crore, against exports worth ₹744.67 crore in April 2019, because of the lockdown, according to government data. Last fiscal, the country exported carpets worth ₹12,000 crore but this year the figure could be significantly low. This could affect the livelihoods of an estimated 20 lakh workers and artisans. Another problem faced by exporters is an increase in air freight charges following the lifting of lockdown restrictions. The CEPC said air charges had gone up three-four times and was making theircosts unsustainable. “The Minister assured us that the matter will be taken up with the Civil Aviation Ministry soon,” Singh said. CEPC also urged the Textile Ministry to allow a virtual fair where global buyers can participate online and place their orders. “We are in a situation where foreign buyers are afraid to come to India and our exporters, too, don’t want to travel. One way for business to go on is through virtual fairs,” Singh said.
Source: Business Line
The scheme, which was to provide ₹20,000 crore equity support to stressed and NPA MSMEs, was approved by the Union Cabinet on June 1…….
Source: The Hindu Business Line
FM Nirmala Sitharaman will meet the chiefs of all state-owned banks and the chairman of SIDBI on Tuesday to review the flow of credit after the opening up of the economy. She will take stock of the Emergency Credit Line Guarantee Scheme announced recently.
Source: Business Standard
The Memorandum of Understanding on Indo-Denmark Energy Cooperation between the Ministry of Power, Government of the Republic of India and the Ministry for Energy, Utilities and Climate, Government of the Kingdom of Denmark to develop a strong, deep and long-term co-operation between two countries in the power sector on the basis of equality, reciprocity and mutual benefit was signed on 5th June , 2020. The MoU was signed by Mr. Sanjiv Nandan Sahai, Secretary (Power) from the Indian side and Mr. Freddy Svane, Ambassador of Denmark to India from the Danish side. The MoU provides for collaboration in areas like offshore wind, long term energy planning, forecasting, flexibility in the grid, consolidation of grid codes to integrate and operate efficiently variable generation options, flexibility in the power purchase agreements, incentivize power plant flexibility, variability in renewable energy production etc. The Indian electricity market would benefit from cooperation with Denmark in these areas. For implementation of the identified areas, a Joint Working Group (JWG) will be established under the MoU. The JWG will be co-chaired by Joint Secretary level officials and will report to a Steering Committee, jointly chaired by the Secretary level officer from both the sides. The Governments will endeavour to take necessary steps to encourage and promote strategic and technical co-operation in the power sector for mutual benefit in the identified areas through the MoU.
Source: PIB
Having exceeded official targets in recent years, India’s handicraft exports dropped to $3.53 billion in FY20, against $3.65 billion a year before, as shipments in March were washed out due to the Covid-19 outbreak Amid various lockdown-related curbs and a demand slump, India’s first virtual business-to-business trade fair kicked off this week to a somewhat promising start. Constrained by various Covid-induced lockdown measures to hold a physical fair, an annual ritual for over a decade, the Export Promotion Council for Handicrafts (EPCH) used its database of overseas buyers and domestic sellers to design a virtual platform as an alternative marketing strategy to promote outbound shipments. This platform hosted stalls of around 200 Indian exporters of fashion jewllery and accessories, to be accessed by importers in key markets like the US and Europe, and elsewhere. The four-day fair, which got over on Thursday, generated business opportunities of Rs 153 crore, down from the usual Rs 300-350 crore, but greater than initial expectations. Importantly, each seller got a virtual stall to showcase their product for just about Rs 10,000, against the Rs 1.5-2 lakh they would pay for obtaining a physical stall earlier, Rakesh Kumar, director general at EPCH, told FE. The concept is expected to be replicated by some other export councils too. The low-fee enabled small exporters, whose cash flow has been battered by the pandemic, to participate in the virtual fair and get some orders, he added. Of course, the EPCH’s own revenue flow, in this process, got dented, Kumar added. Typically, once an overseas buyer clicks on a particular stall, he would get to see photographs and videos of the entire product range of that seller. If he is interested in a product and has queries, there would be links for immediate interactions with the seller via Skype or Zoom. Once an order is placed, the seller would deliver the products through courier. Around 1,200 buyers from 81 countries, apart from 500 buying agents, wholesalers and retailers, also participated in the virtual fair. The EPCH now wants to scale it up and have a much largerr virtual export fair, covering products across textiles, home, lifestyle, fashion and furniture, from July 13, Kumar said. About 3,000 exhibitors and 50,000 buyers are expected to take part in this virtual fair, he added. Having exceeded official targets in recent years, India’s handicraft exports dropped to $3.53 billion in FY20, against $3.65 billion a year before, as shipments in March were washed out due to the Covid-19 outbreak.
Source: Financial Express
However, power consumed in the month was about 20% higher than April, reflecting more agricultural consumption in the sowing season and higher residential usage with the advent of summer. Electricity demand in May fell 15% year-on-year to 102 billion units owing to muted industrial and commercial activities. However, power consumed in the month was about 20% higher than April, reflecting more agricultural consumption in the sowing season and higher residential usage with the advent of summer. Power usage in April, when the lockdown was implemented throughout the month, fell a record 22.6% year-on-year. In May, power consumed by highly industrialised states like Gujarat, Maharashtra and Tamil Nadu was lower by 13.5%, 11.3% and 15%, respectively, than the volume of electricity supplied to these states in the same month in 2019. However, states such as Rajasthan, Karnataka and Madhya Pradesh — the largest agricultural power users — recorded annual decreases of 5.5%, 5.8% and 7.8%, respectively. Since most of the revenue of state-run power distribution companies (discoms) come from industrial and commercial customers, lower usage by these categories means additional pressure on these already-distressed entities. Industrial and commercial consumers use about 40% of the total electricity supplied, but contribute about 50% of the discoms’ revenue share. Experts have pointed that lower power tariffs for industrial consumers can be a trigger to kick-start the economy by increasing industrial production. On the other hand, agricultural consumers contribute less than 4% of the revenue share against 23% usage, increasing the dependence of discoms on infrequent and insufficient subsidy disbursals by states. With lower revenue generation amid muted power demand, losses of discoms are seen to nearly double to around Rs 58,000 crore in the current fiscal, analysts at Crisil Ratings said. Discoms are also expected to end up owing lenders a staggering Rs 4.5 lakh crore by the end of this fiscal, recording a 30% annual rise and deteriorating their credit profiles.
Source: Financial Express
Construction and real estate are staring at a worker shortage of 52%, followed by manufacturing at 44% and healthcare and pharmaceuticals at 42%, according to a survey based on initial hiring discussions, enquiries and mandates. Companies across industries are facing a huge shortage of blue-collar workers as they gradually resume operations after the lockdown, and many are lining up incentives to woo workers from near and far. Triggered mostly by the mass exodus of migrant labourers from urban centres across the country during the two months-plus lockdown when most of them lost their livelihoods, the overall shortfall is estimated at 40-50% over the next few months, according to a survey conducted exclusively for ET by staffing firm TeamLease Services. With workers in short supply, firms are going all out to hire people from nearby villages as well as far-off states, offering extra wages, bonus, food, transportation facilities and other support such as providing 15-day isolation facilities for entry into states that require mandatory quarantine.
Storekeepers, Guards in Demand
“The demand-supply gap is high because the blue-collar workforce is hugely dependent on migrant workers and getting them back is a big task,” said Amit Vadera, assistant vice president at TeamLease Services. “We see a temporary wage hike for the blue-collar workers in the form of extra hourly or daily wage, bonus, and other perks as companies will make an attempt to retain the migrants.” Companies in the fast-moving consumer goods (FMCG), manufacturing, pharma and healthcare, engineering, ecommerce, and logistics sectors have started hiring, Vadera said. Key profiles in demand include maintenance engineers, dispatchers, lab technicians, security guards, sweepers, packers, delivery staff, storekeepers, drivers, masons, tile fixers, electricians and store executives. Dabur India is recruiting workers from villages and towns in the areas near their manufacturing units in Uttarakhand and Himachal Pradesh. “Also, wherever we are facing shortage, we have sought and received permissions from state authorities to hire workers from other states,” said Biplab Baksi, executive director, HR. The company has gone to states such as Jharkhand to hire workers and has arranged transportation for them to reach its manufacturing units. “All safety protocols mandated by each state, like social distancing, etc, are being followed during the transportation, and once they reach our manufacturing units,” Baksi said. Some firms such as KEC International are considering incentives. “We may give incentive/retention pay to people who commit to stay back for some time,” said Vimal Kejriwal, CEO of the power transmission engineering, procurement and construction company that has started hiring local unskilled labour and giving them training.
Southern States Hit Most
Experts said the shortage is acute in regions that are more dependent on migrant workers, such as many of the southern states. Santrupt Misra, CEO of the carbon black business at Aditya Birla Group, however, said the shortage of workers may not be prolonged or debilitating. “There are a lot of people already coming back,” he said. “If payment is done smoothly and income flow regularises, more people will return.” Misra believes most people who fled to their villages will eventually return to urban centres. “Also, India has a lot of young aspirational workforce that is waiting in the rural areas who will want to come and work in urban centres,” he said. Some industrialists said it’s important to assuage the concerns of those who were forced to flee the cities. “You have to remove the fear about the virus and give them their jobs back. People will automatically return,” said Niranjan Hiranandani, managing director of the Hiranandani Group.
Source: Economic Times
Several indicators suggest economic activity picked up in May from the depths of April. With a substantial easing of the nationwide lockdown from June 1 as part of Unlock 1.0, economic revival should gather pace though there is doubt whether this will be sustained once pent-up demand is exhausted. ET looks at the numbers.
Source: Economic Times
The adverse impact of coronavirus on India’s apparel and textile industry is beginning to show in Bengaluru, the country’s largest textile manufacturing hub that employs about 2.5 lakh workers. Many of the highly employment-intensive clothing units in and around the city are either shutting down their operations or laying off employees, even as Karnataka is limping back to normalcy from the Covid-induced lockdown. On Saturday, about 1,200 workers of a factory unit in Srirangapatna affiliated to the largest apparel manufacturer and exporter, Gokaldas Exports, were laid off. The company has told the workers that they would be given a portion of the salary for the next two weeks. The garment workers’ union is predicting closure of the factory eventually. At least four clothing manufacturing units in Bengaluru, of Garden City Fashion, Sonal Garments, Texport Industries and Punith Creations, have shut their operations or laid off half their workforce in the last 2-3 weeks, according to the workers’ union and industry insiders. Many factories are expected to tread the same path. Garment factories in Karnataka employ more than 4 lakh workers, mostly women, and the uncertainty and layoffs are likely to affect thousands of families who are dependent the industry for livelihood. Some of the industry representatives ET spoke to said it might take at least six months for demand to pick up. Since a significant number of Indian clothing companies supply products to overseas customers, the factories resuming operations in full scale will largely depend on the market behaviour in Europe and the US. “There are challenges primarily driven by end-user demand. Most of the stores abroad are just about reopening and it is very early to see how the demand will pick up. There is an apprehension that the economic crisis may push customers to be conservative. There could be more demand for low-value garments than high-value clothes,” said the Chief Executive Officer of a top cloth manufacturing company, who did not wish to be named. Meanwhile, some companies are making adjustments to their product lines as they resume operations. At Mandhana Industries in Peenya industrial area that employs about 1,000 workers, half the workforce is back at work. Like many other garment units, Mandhana too has temporarily switched to making PPEs that include facemask for top brands like Wildcraft, and full body suits. “We will resume operations in full scale when we get new orders from our customers overseas,” said general manager Rajashekhar Murthy M. The company managed to export 20,000 pieces of clothes to Sweden and Spain during the lockdown, but export cost has now increased, Murthy said, as the pandemic has affected air and sea freight services as well, driving up tariffs. “Earlier, the cargo charges were 140 per kg, but it has doubled now. Also, our customers are asking for a 30% discount because of the falling demand across the globe. It is not viable,” he said. The industry is hoping to get some visibility on the market in six months. “We cannot predict how soon the demand will grow. But, hopefully we will get an idea about the market revival in the next six months,” said Naseer Humayun, the honorary secretary (south) of the Clothing Manufacturers Association of India.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
834.37 |
USD/Ton |
1.63% |
08-06-2020 |
|
VSF |
1284.74 |
USD/Ton |
0% |
08-06-2020 |
|
ASF |
1605.92 |
USD/Ton |
0% |
08-06-2020 |
|
Polyester POY |
784.96 |
USD/Ton |
0.18% |
08-06-2020 |
|
Nylon FDY |
1976.52 |
USD/Ton |
0% |
08-06-2020 |
|
40D Spandex |
3995.39 |
USD/Ton |
0% |
08-06-2020 |
|
Nylon POY |
2287.12 |
USD/Ton |
0% |
08-06-2020 |
|
Acrylic Top 3D |
5195.42 |
USD/Ton |
0% |
08-06-2020 |
|
Polyester FDY |
1009.44 |
USD/Ton |
0% |
08-06-2020 |
|
Nylon DTY |
1870.64 |
USD/Ton |
0% |
08-06-2020 |
|
Viscose Long Filament |
1778.87 |
USD/Ton |
0% |
08-06-2020 |
|
Polyester DTY |
988.26 |
USD/Ton |
0% |
08-06-2020 |
|
30S Spun Rayon Yarn |
1736.51 |
USD/Ton |
0% |
08-06-2020 |
|
32S Polyester Yarn |
1404.74 |
USD/Ton |
0% |
08-06-2020 |
|
45S T/C Yarn |
2174.17 |
USD/Ton |
0% |
08-06-2020 |
|
40S Rayon Yarn |
1581.22 |
USD/Ton |
0% |
08-06-2020 |
|
T/R Yarn 65/35 32S |
2018.87 |
USD/Ton |
0% |
08-06-2020 |
|
45S Polyester Yarn |
1905.93 |
USD/Ton |
0% |
08-06-2020 |
|
T/C Yarn 65/35 32S |
1680.04 |
USD/Ton |
0.85% |
08-06-2020 |
|
10S Denim Fabric |
1.12 |
USD/Meter |
-0.25% |
08-06-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
-0.22% |
08-06-2020 |
|
40S Combed Poplin |
0.94 |
USD/Meter |
-0.30% |
08-06-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
08-06-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
08-06-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14118 USD dtd. 08/06/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Textile and automotive factories reopened their doors in western Turkey’s industrial cities of Kocaeli and Sakarya and are operating at over 80% capacity while preparing for new investments thanks to boosted orders. Following a mandatory yet brief break due to the coronavirus outbreak, Turkish factories in western Kocaeli and Sakarya provinces – leading industrial cities of the country, started operating at full speed, with new investments and factory openings on the way thanks to increasing orders. Especially automotive and textile industries, which are considered chief players in the Turkish economy, started their production even faster than the pre-coronavirus period as of June 1 when the country lifted almost all of the measures as the spread of the virus was declared under control and a new phase of normalization has begun. Mustafa Gültepe, CEO of the Talu Tekstil located in the first Organized Industrial Zone (OIZ) in Sakarya, who is also the chairman of the Istanbul Textile and Apparel Exporters Association (ITKIB) told the Turkish Sabah daily that they started June fast, as the company is receiving high numbers of orders from Europe. Textile and apparel were one of the sectors most affected by the pandemic that hammered businesses worldwide. Hitting Europe and the U.S. hard after emerging in China, the outbreak shuttered nearly all stores and eventually caused a difficult process for Turkish textile manufacturers and exporters. However, the textile manufacturers underwent a quick revival and now foresee an even quicker recovery after the shock they experienced, sector representatives said. Talu Tekstil is currently working again at full production after its factories produced nothing but medical masks during the month of April. "The demands have increased significantly with the opening of stores in Europe. Our capacities are also increasing rapidly,” Gültepe said. The company opened its third factory in Adapazarı last year to keep up with increasing orders and is now planning to move its factory to a newly established giant factory with a closed area of 20,000 square meters (65,617 square feet) in central Turkey at the end of the month. Its production capacity is planned to increase by 30% after moving to the new factory. “Our investments will continue to increase," Gültepe said. The company, which strictly follows all the rules set out by the Ministry of Health, has already changed the working order and reorganized its dining halls accordingly with social distancing rules while every staff member is required to wear face masks and have their temperatures taken regularly.
Produce to export
The company sells its entire production abroad and were sending products to 155 countries before the outbreak. Talu Tekstil, which was manufacturing approximately 1 million products a day for global companies before the virus, is working with the target of producing at these levels again in August. Stating that they provide employment for 2,500 people, Gültepe noted, "As industrialists, we are ready to do whatever we can with the support of the state." He added that Turkey stands out as one the most powerful alternatives to supply chains and with this challenging process it has even “strengthened its solid supplier position."
Capacity high in automotive
Assan Hanil Automotive Industry and Trade Inc., established with the partnership of Kibar Holding and South Korean Seoyon E-Hwa that resumed production on April 20, is also continuing to produce at high levels and increased its capacity utilization rates up to 70% in a short time. Atacan Güner, the company's general manager, said that the capacity utilization rates are increasing daily, and “the sector is expecting 90-95% levels in September." The company operates five plants; three of which are located in Kocaeli, one in northwestern Bursa and the other in central Aksaray; and produces for brands including Hyundai, Ford, Mercedes, Toyota, Karsan, Isuzu and Honda. The companies that receive products from Assan Hanil which has an annual 190 million euro ($214.2 million) turnover, are also among the largest exporters and have large markets in Europe. Thus, 90% of the company's turnover comes from indirect exports. Saying that the main acceleration in the sector will be achieved with the opening of the European market, Güner said: "We expect the market to return to 70-75% sales pace in June and its pre-coronavirus levels in three to four months." Güner also said that the company’s initiatives for investment abroad also continue uninterrupted despite the virus and having its main target in western Europe. "Our search for investments continues regarding Germany, Czechia and Poland,” he said, noting that “they plan to buy at least 50% shares of a company with an investment of 40 million euros.” Stating that they are recovering rapidly although the sector is the most affected by this crisis after the textile and aviation industries, Güner explained that the credit support given by the public banks to the automotive sector is also very important. Predicting that this step will be reflected in the sector very quickly, Güner said: "The automotive (sector) is the locomotive of the exports. All kinds of support to be given here are also very important for the protection of employment. We expect the sales to double with the support in question.” Turkey's three largest state lenders last Monday announced that they will extend a new loan incentive scheme with reduced rates to invigorate the transition to normalization and revive social life, as economic activity steps up following a slowdown due to the coronavirus pandemic. Ziraat Bank, VakıfBank and Halkbank are beginning to offer four new loan packages, including mortgages for new houses, loans for vehicle purchases, locally manufactured goods and holiday expenses at annual interest rates running below inflation. The move was later joined by the state lenders’ participation banks.
Source: Daily Sabah
Indonesian business players are demanding the government provide an additional stimulus package of Rp 625.1 trillion (US$44.6 billion) in working capital to help them cope with pandemic-induced economic strains, the Indonesian Employers Association (Apindo) has said. The textile industry has requested the largest amount in assistance, Rp 283.1 trillion, while the food and beverage industry and sock manufacturers requested Rp 200 trillion and Rp 99 trillion in assistance, respectively, according to calculations compiled by Apindo. Meanwhile, the hotel and restaurant industry, among the hardest hit by the pandemic, has requested Rp 42.6 trillion, as COVID-19 restrictions have led to steep decline in travel. “We really hope working capital [will be supplied] for the industry. It is very important,” Apindo chairman Hariyadi Sukamdani said during a virtual discussion on June 5. Despite the previous stimulus packages disbursed by the government, Indonesia’s economy grew by just 2.97 percent in the first quarter, the weakest rate in almost two decades. Meanwhile, large-scale social restrictions have also forced businesses and factories to shut operations. Hariyadi said that due to economic pressures caused by the pandemic, textile companies had furloughed seven out of 10 workers, while food and beverage companies could only pay half of their employees’ wages. The business players association also demanded the stimulus be disbursed over the course of a year, and also requested relaxation of electricity and gas payments to help cut the businesses’ operational costs. Indonesia’s Purchasing Managers Index (PMI), a gauge of the nation’s manufacturing activities, hit 28.6 points in May, rebounding from 27.5 the previous month, but still far below the 50-point benchmark that indicates growth, according to market consultancy firm IHS Markit. The government recently announced that the state budget to fight COVID-19 had been increased to Rp 677.2 trillion, up from the Rp 641.17 trillion allocation in May and the initial allocation of Rp 405.1 trillion. About Rp 120.6 trillion will be allocated for tax incentives for larger entities, while Rp 44.57 trillion will be used to provide a stimulus for state-owned enterprises (SOEs) and labor-intensive businesses. Meanwhile, the government also plans to provide a Rp 25 trillion stimulus package that includes airfare and hotel discounts to speed up the recovery of the travel industry. Hariyadi, who also serves as the chairman of the Indonesian Hotel and Restaurant Association (PHRI), said the existing stimulus plan was not sufficient, as the tourism sector had suffered Rp 70 trillion in estimated losses between January and April this year. More than 2,000 hotels and 8,000 restaurants have been forced to close their operations, Hariyadi stated. Under the current trajectory, the food and beverage industry is projected to bounce back in three months while other industries that rely quite heavily on exports, like the auto, textile and shoe industries, may need at least nine months to recover, according to Apindo. Meanwhile, consumer goods manufacturer PT Unilever Indonesia has managed to buck the declining economic trend by producing highly sought after sanitary products. It initiated a hundredfold increase in the production of hand sanitizer, as demand for the product has soared during the health crisis. By cutting the product development process to six weeks from the usual six months, the firm also introduced a new product line called Sahaja, which includes a disinfectant spray to clean sajadah (prayer mats), in April. “The pace of innovation is very quick, to keep up with what the public needs,” the firm’s head of external affairs, Ribut Tri Purwanti, said during the same online talk.
Source: The Jakarta Post
The economic downturn in the US triggered by the pandemic has been officially declared a recession. The National Bureau of Economic Research made the designation on Tuesday, citing the scale and severity of the current contraction. It said activity and employment hit a "clear" and "well-defined" peak in February, before falling. The ruling puts a formal end to what had been more than a decade of economic expansion - the longest in US history. Meanwhile, US markets continued their rebound on Monday, as investors remained optimistic that the downturn will be short-lived. A recession was expected after the US economy contracted 5% in the first three months of the year. Employers also reported cutting roughly 22 million jobs in March and April, as restrictions on activity intended to help control the virus forced many businesses to close. Some economists are hopeful that the job losses have now stopped, and a rebound has begun. In May, US employers added 2.5 million jobs, as states started reopening. The National Bureau of Economic Research, a private research organisation, said it viewed the scale of the decline that started in February as more significant than its duration. "The unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions," it said. The bureau typically defines a recession as an economic contraction that lasts "more than a few months". It has declared 12 recessions since 1948, the longest of which was the Great Recession, which lasted 18 months, from December 2007 to June 2009.
Markets recover
US financial markets, which tumbled in February amid signs of the economic collapse, have been on the upswing since March, due to investor hopes that economic damage will be limited, thanks to emergency relief from Congress and the central bank. On Monday, the Nasdaq index closed at 9,924.7, gaining 1.1% to top its pre-pandemic record. The S&P 500 rose 1.2% to close at 3.232.3 - returning to where it started the year - while the Dow Jones Industrial Average climbed 1.7% to 27,572.4. The two indexes are now less than 10% lower than their pre-pandemic peaks. US President Donald Trump has celebrated the rebound. "Big day for Stock Market. Smart money, and the World, know that we are heading in the right direction. Jobs are coming back FAST. Next year will be our greatest ever," he wrote on Twitter on Monday morning. Many economists have warned that the economic pain is likely to linger, even if the worst has passed. The World Bank on Monday said it expected the global economy to shrink by 5.2% this year, in the deepest recession since World War Two. It said it expected the US economy to contract by 6.1% and the Euro area to shrink by 9.1%.While global growth of 4.2% is expected to return next year, the bank warned that the outlook is "highly uncertain and downside risks are predominant, including the possibility of a more protracted pandemic, financial upheaval and retreat from global trade and supply linkages".
Source: BBC
