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Economy

UPDATE 3-Portugal headed for recession this year, says central bank

* Portugal to enter recession in 2020 due to coronavirus

* Exports to drop between 12.1% and 19.1%

* Outbreak to have “potentially long-lasting effects” (Adds new government measures)

By Sergio Goncalves and Catarina Demony

LISBON, March 26 (Reuters) – Portugal will go into recession this year as the coronavirus hits private consumption and investment and exports collapse, the central bank said on Thursday.

Portugal has 3,544 confirmed cases of the coronavirus, with 60 reported deaths, far below other southern European countries such as Italy and Spain.

In its economic bulletin, the first data set showing the impact the virus is likely to have on the economy, the Bank of Portugal said gross domestic product would drop between 3.7% and 5.7% in 2020. Last year it grew 2.2%.

Private consumption is set to fall 2.8% to 4.8% and exports will decrease 12.1% to 19.1% this year, according to the bulletin. Private investment will drop between 10.8% and 14.9%.

The unemployment rate is set to increase to between 10.1% and 11.7% this year, compared with 6.6% in 2019.

“The outlook for the Portuguese economy deteriorated sharply and significantly as a result of the impact of the COVID-19 pandemic,” the Bank of Portugal said in a statement.

The outbreak will have “very significant and potentially long-lasting effects”, it said.

It said Portugal, which completed a strict EU bailout programme in 2014 in the wake of the 2008 global financial crisis, should return to economic growth over the next two years.

It projected growth of 0.7% to 1.4% in 2021 and 3.1% to 3.4% in 2022.

Portugal declared a state of emergency on March 18, which meant the closure of non-essential businesses, affecting thousands of jobs across the country.

The government also announced a 9.2 billion euro ($10 billion) package worth 4.3% of annual GDP to support workers and provide liquidity for affected companies.

On Thursday, the government announced a set of new measures to help companies and families, including a six-month suspension of the payment of loan instalments.

Those unemployed or in mandatory isolation are automatically eligible.

“This measure will provide very significant relief given the financial efforts made by companies and families,” said Economy Minister Pedro Siza Vieira.

Boosted by the exports sector, the tourism industry and private investment, the economy had been steadily growing since it exited its bailout programme in 2014.

On Wednesday, Portugal reported a budget surplus of 0.2% of gross domestic product in 2019 – its first in 45 years of democracy – after a deficit of 0.4% in 2018.

That day Finance Minister Mario Centeno said all scenarios pointed to a recession. (Reporting by Sergio Goncalves and Catarina Demony; Editing by Raissa Kasolowsky and Hugh Lawson)

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World News

Coronavirus: 11 new cases of COVID-19 reported in Waterloo Region

There are now 69 people in Waterloo Region who are believed to have contracted COVID-19, according to public health officials.

The organization updated its list on Friday morning and it has grown by 11 since it was last updated on Wednesday.

Officials also confirmed their first resolved case — a man in his 50s who tested positive at St. Mary’s General Hospital after returning from a cruise.

More to come. 

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Questions about COVID-19? Here are some things you need to know:

Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.

Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.

To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.

For full COVID-19 coverage from Global News, click here.

 

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World News

As virus cases soar, Indonesian province challenges lockdown ban

JAKARTA (Reuters) – Indonesia’s government has over-ruled efforts by a province to lockdown its borders to prevent the coronavirus from spreading, highlighting the country’s reluctance to embrace the strict containment strategies of other nations.

President Joko Widodo’s policy to curb the virus encourages social distancing but does not tightly restrict movement across Indonesia.

“Every country has their own characters, cultures, and discipline level,” Widodo said in a social media post on Tuesday. “With this in mind, facing this COVID-19, we don’t opt for lockdown”.

On Friday, the world’s fourth most populous country announced the biggest one-day surge in coronavirus cases, up 153 to 1,046. Indonesia has only conducted 4,336 tests, a fraction of those done by other nations. One model by infectious disease experts suggests there are as many as 50,000 cases.

Hundreds of thousands of residents of Jakarta, where most confirmed cases have been clustered, have left over the past week for their home villages to find a safe haven, or after losing their jobs, officials said.

In response, local governments are taking matters into their own hands.

On Thursday, the easternmost province of Papua shut its airports, sea ports and land borders to passengers for 14 days, alarmed that the coronavirus had reached there.

In Tegal in Central Java, the mayor this week closed 49 access points and shut public spaces until July 30 after someone who had returned from Abu Dhabi contracted the coronavirus.

“People need to understand the policy I took. If I had to choose, I’d rather be hated by people then let them die,” the mayor, Dedy Yon Supriyono, was quoted by CNN Indonesia as saying.

In Papua, the decision to close its borders was taken in consultation with the police and the military, documents showed.

Papua’s four airports and sea ports were closed on Thursday and remained shut on Friday, a government official said.

The order to reverse the airport closures reflected the views of the “highest level of government”, said Novie Riyanto, a senior official at the Ministry of Transport, .

“We have no national lockdown. If we close the airport, it means that we are against the direction of the president,” Riyanto said in a video.

Ahmad Syarif Syechbubakr, a Jakarta-based analyst with Bower Group Asia, said Widodo was “very concerned about the economic impact of the lockdown” and his advisers saw a risk of social unrest by millions of informal workers like street hawkers and laborers if movement is restricted.

The University of Indonesia’s Panda Rio said authorities must cancel the “mudik”, when millions of Indonesians leave towns for their villages at the end of the Muslim fasting month Ramadan in May.

“Many people going home are likely to come from a place that’s infested with the virus,” he said.

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World News

Bowman to host interactive discussion for kids about COVID-19

Winnipeg’s mayor is taking to social media to answer local kids’ questions about the coronavirus pandemic.

Brian Bowman says he’ll host an interactive discussion via Instagram on his @mayorbrianbowman page at 5 p.m. Thursday, and is encouraging local parents and children to participate.

Bowman told 680 CJOB on Wednesday that the city is busy working on the COVID-19 problem for Winnipeggers, including looking into the possibility of deferring taxes and the potential for declaring a state of emergency.

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World News

Trump looking to put troops near Canadian border amid coronavirus fears

American government officials inside Donald Trump’s White House are actively discussing putting troops near the Canadian borders in light of U.S. border security concerns around the coronavirus pandemic, sources tell Global News. 

Few people cross from Canada into the United States at an unofficial point each year but the goal of the policy would be to help border guards detect irregular crossers, the sources said. 

While the White House is pushing for this, no decision has been made. It’s not clear if Canadian officials have been officially briefed but informal conversations are ongoing. 

Global News has asked the White House to comment on this story but has not received a response.

Any militarization on or near the Canadian border would be a stark departure from traditional relations between the two countries as the Canadian-US border has traditionally been recognized as one of the longest non-militarized borders in the world. 

The proposal has raised diplomatic concerns on both sides of the border.

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World News

Demand increases for moving services in southern Alberta

While the COVID-19 pandemic is halting business in many sectors, moving companies in southern Alberta are as busy as ever.

“Our demand has not diminished. In fact it’s actually increased,” said Francois Dodier, a foreman with 1Up Moving and Delivery in Lethbridge.

Dodier adds although business is booming, they aren’t being lackadaisical with sanitation.

“We’ll put on our gloves, put on our masks,” he said. “We’ll greet the client – of course not shaking any hands.”

He says they haven’t had any clients in Alberta who have shown symptoms of COVID-19.

“As long as the government doesn’t shut us down, we’re still planning on doing all of the services that anyone needs to do.”

Jeff Lockridge, manager of media and public relations with U-Haul Rentals, says its 22,000 locations haven’t been impacted yet, and it’s aiming to help college and university students stuck in limbo.

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“They’re forced to go back home,” Lockridge said.

Lockridge encourages students with valid identification to consider applying for free 30-day storage.

“We know how they’ve been impacted by these university schedule changes,” he said.

Being able to physically move personal items may not be an issue right now, but several real estate agents have stopped in-person showings to increase social distancing.

Lethbridge resident Cayleigh Duffield says this could be an issue for those looking to rent.

“It is kind of hard because it can kind be sort of deceiving when you look at pictures so it’s hard to tell what a place looks like.”

Duffield considers herself lucky, having started the moving process before the pandemic took hold of the industry.

“Just stay calm about the whole situation,” said Duffield. “That’s just how I’ve been taking it.”

Peak moving season in Lethbridge typically occurs between April and September.

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World News

EU chief fumes at European leaders over handling of coronavirus ‘Show real leadership!’

With the Eurozone’s economy on the brink of collapse, the European Parliament’s president warned Brussels lacks the tools to keep it afloat. David Sassoli called on the bloc’s leaders to reach an agreement on a series of new fiscal measures that can help support countries through the economic upheaval caused by the global pandemic. He said: “The instruments we have available now are not enough.

“A profound crisis will impact our economy, our structure and our very social model.

“It is not enough for the European Council to just open up debate – we need real leadership.”

European capitals have begun negotiations over so-called “coronabonds”, a joint eurozone debt initiative to help prop up its economies hit hardest by COVID-19.

While at least nine member states are pushing for the measure, Germany and the Netherlands have presented themselves as staunch opponents.

In a joint letter to European Council president Charles Michel, leaders from the nine countries insisted the EU needed “to work on common debt instrument issued by a European institution to raise funds on the market on the basis and to benefits of all member states”.

France’s Emmanuel Macron, Italy’s Giuseppe Conte and Spain’s Pedro Sanchez have all argued that the fight against coronavirus is a special case that could trigger economic shocks that impact all countries.

The letter said: “We are collectively accountable for an effect and united European response, they wrote in the letter, with the joint support of the leaders of Ireland, Greece, Slovenia, Luxembourg, Portugal and Belgium.

“This common debt instrument should have sufficient size and long maturity to be fully efficient and avoid roll-over risks now as in the future.

“The funds collected will be targeted to finance in all member states the necessary investments in the healthcare system.”

Opposition member states, which also include Austria, Denmark and Finland, argue that the bloc shouldn’t deploy such drastic measures until absolutely necessary.

One EU diplomat said: “We have national measures. We have the Commission’s instruments, as a second fallback. We have the European Investment Bank, and other investment instruments.

“The problem is that we’ve been asked to jump immediately to the last resort mechanism while not having exhausted all the options on the road to that last resort.”

MUST READ: Spain’s regional hatred for Madrid has help fuel coronavirus crisis

Another source added: “We shouldn’t use up all our instruments this week because we don’t know how deep this crisis will be. There must always be spare ammunition to fall back on if need be.

“My country will not agree to corona bonds, that’s quite clear. We don’t think this is the right solution to the crisis at this time,” the diplomat said on condition of anonymity.”

Eurogroup finance ministers have already failed to reach a consensus for the planned measure, instead leaving leaders to make a final decision.

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The new joint credit lines are reminiscent of the eurobonds that were discussed as part of the rescue package after the end of the EU debt crisis.

During tense negotiations, the bloc’s debtors proposed the EU “mutualise’ debt through a joint debt instrument.

But German economy minister Peter Altmaier said the discussion over the measure was a “phantom debate”.

“I urge caution when supposedly new, ingenious concepts are presented which often enough are just long discarded ideas coming back from the dead,” he fumed.

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Business

Trump tells GM: Stop 'wasting time', build ventilators to address coronavirus

WASHINGTON/DETROIT (Reuters) – U.S. President Donald Trump on Friday invoked emergency powers to require General Motors Co (GM.N) to build much-needed ventilators for coronavirus patients after he accused the largest U.S. automaker of “wasting time” during negotiations.

Trump, who has been on the defensive for not moving faster to compel the production of medical equipment, for the first time invoked the Defense Production Act, saying GM was not moving quickly enough even though earlier on Friday the largest U.S. automaker announced it would begin building ventilators in the coming weeks.

Asked about negotiations with GM over ventilators, Trump expressed anger with the company’s decision to close an assembly plant in politically important Ohio. He also criticized GM’s prior decisions to build plants outside the United States.

“I didn’t go into it with a favorable view,” Trump told a news conference of the GM talks. White House adviser Peter Navarro said the administration ran into “roadblocks” with GM this week.

GM said in a statement in response to Trump that it has been working with ventilator firm Ventec Life Systems and GM suppliers “around the clock for over a week to meet this urgent need” and said its commitment to Ventec’s ventilators “has never wavered.”

The act grants the president power to expand industrial production of any key materials or products for national security and other reasons. New York Governor Andrew Cuomo and other Democrats have urged him to invoke the act, but the president had been reluctant to do so until now.

Democratic U.S. Senator Ed Markey said, “About time. Now, tell us every day: which companies will be making more of this equipment, how much is being made, and where the equipment is going.”

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  • Factbox: Carmakers churn out machines, masks to help fight coronavirus

On Friday, the number of confirmed coronavirus cases in the United States topped 100,000, the highest in the world according to a Reuters tally. The U.S. death toll topped 1,550. [L1N2BK21G]

Trump also said countries such as the United Kingdom, Germany, Spain and Italy need ventilators and that if the excess volume is not needed, the United States can export them.

Earlier, Trump lashed out at GM and Ford Motor Co F.M for moving too slowly just hours before GM said it would build medical equipment at an Indiana plant.

Trump criticized the U.S. automakers and said he expected the United States would make or obtain 100,000 additional ventilators within the next 100 days.

The attack on the automakers coincided with rising tension between Trump and the Democratic governors of New York and Michigan, who have criticized the administration’s response to the COVID-19 epidemic. On Thursday evening, Trump questioned in an interview on the Fox News network whether New York state needed 30,000 ventilators to cope with rising numbers of coronavirus patients, as Cuomo had said.

GM and Ford separately announced earlier this week they were working with medical equipment companies to help boost ventilator production.

GM and its partner Ventec confirmed after Trump’s tweets that the No. 1 U.S. automaker would deploy 1,000 workers to build ventilators at its Kokomo, Indiana, parts plant and ship as soon as next month. It was aiming to build more than 10,000 per month with the ability to go higher. Suppliers in the effort were told the target was 200,000 ventilators.

But early Friday, before GM issued its release, Trump attacked the automaker and Chief Executive Mary Barra on Twitter, reviving his grievance with Barra for closing and selling a car factory in Ohio, a state critical to the president’s re-election campaign.

“General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!! FORD, GET GOING ON VENTILATORS, FAST!!!!!!” Trump wrote on Twitter on Friday.

“They said they were going to give us 40,000 much needed ventilators, ‘very quickly’,” Trump said on Twitter of GM and Ventec’s effort. “Now they are saying it will only be 6000, in late April, and they want top dollar.”

Trump’s comments about GM and Ford came after a New York Times story Thursday suggested the White House had backed away from announcing a major ventilator deal with GM and Ventec because the price tag was too high. That drew criticism from Democrats.

Following Trump’s tweets, Ford said it was moving as fast as it could to gear up its ventilator manufacturing efforts and was in “active conversations” with the Trump administration seeking approvals. Ford said it has “teams working flat-out with GE Healthcare (GE.N) to boost production of simplified ventilators.”

Other automakers have said they are working to produce ventilators, masks and other medical equipment.

On Friday, Toyota Motor Corp (7203.T) said it was “finalizing agreements to begin working with at least two companies that produce ventilators and respirators to help increase their capacity.”

New York City Mayor Bill be Blasio on Friday said on Twitter that Tesla Inc (TSLA.O) had agreed to donate hundreds of ventilators to hospital intensive care units in New York City and the state of New York.

    Tesla Chief Executive Elon Musk in response said the electric carmaker was helping locate and deliver existing ventilators.

    Tesla on Friday did not respond to a request for comment on where it got the ventilators and whether the company was producing any ventilators of its own, something Musk has said the company will do.

Fiat Chrysler Automobiles NV (FCA) and Ferrari (RACE.MI) previously said they were exploring making ventilators in Italy.

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World News

N.B. teachers produce lip-sync music videos to cheer up students amid COVID-19 school closures

Some creative teachers in New Brunswick have put together a series of lip-sync music videos to cheer up their students who are unable to attend school due to the COVID-19 pandemic.

Kirk Geldart is a teacher at Moncton High School and said he was more than happy to take part in the video produced by his school, because he wanted to help cheer up his students.

“Just so that they know that we are thinking of them and just to try and help them lighten their day a little bit,” said Geldart.

He said dealing with the impact of the pandemic has been stressful for students and teachers. He said the videos are meant to give the kids a lift and to let them know that their teachers are there for them even if they cannot be in the classroom.

“We have good days and bad days, and we have really silly fun days like what we show in the video,” he said.

Chris West’s wife Lindsay also took part in the videos, which have been produced by several schools across the province.

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“It also allowed some of the teachers to really go outside of their zone to entertain the students,” said Chris.

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World News

Subway apologizes for Calgary sign offering free face masks with sandwich purchase

Subway Canada has apologized for a sign outside a Calgary restaurant advertising free face masks with the purchase of sub sandwiches.

The large billboard sign seen outside a Subway in the Westbrook Mall on Thursday advertised that if a customer bought two regular size sandwiches, they’d get a free medical face mask.

“FREE medical mask to protect you and your kids,” it read.

It also featured images of two people wearing face masks.

In an emailed statement, Subway Canada country director Cristina Wells said the company didn’t direct the franchisee to put up the sign.

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“This was an unsanctioned and completely inappropriate promotion undertaken by a franchise owner,” Wells said.

“This was addressed with the franchisee immediately upon becoming aware and the sign has since been taken down.

“Subway Canada in no way condones this regrettable incident, and sincerely apologizes for the insensitivity in the message.”

Face masks have been in high demand since the coronavirus outbreak started, with pharmacies and suppliers across the country facing shortages and resale sites banning and removing online ads for them.

Community groups, organizations, post-secondary schools and suppliers are also ramping up production of the masks — and other health supplies and equipment — to provide to front-line health workers amidst worries about a possible shortage.

In Toronto, at least two hospitals have started rationing protective gear as they face supply shortages.

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