Updated at 1/13/2021, 4:15:40 PM BST
Michael Stott, Latin America Editor
Latin America, the world’s worst-hit region by the coronavirus pandemic, faces a slow and painful recovery, with a growing risk that poverty and inequality will trigger political upheaval, economists have warned.
By the end of this year, the region’s output will be 4.8 per cent below its pre-pandemic level, the worst performance in the world, according to IMF forecasts.
Carlos Felipe Jaramillo, World Bank head for Latin America and the Caribbean, believes the region will not recover its pre-pandemic gross domestic product level until at least 2023.
“2020 was a disastrous year,” Mr Jaramillo told the Financial Times. “We’re very concerned for what that means for poverty and inequality.”
This year should be better but “it will only be a very gradual recovery”, he said. “I don’t think we’re expecting anywhere a quick bounceback.”
The sluggish recovery is largely a problem of Latin America’s own making; global economic dynamics are favourable as central banks in advanced economies continue to pump huge volumes of stimulus into financial markets and China’s speedy recovery boosts commodity prices.
Laura Pitel in Ankara
More than 100,000 Turkish health workers have received their initial dose of a Chinese-made coronavirus vaccine as the country embarks on its immunisation programme.
Turkey began inoculating doctors, nurses and other health workers on Thursday, a day after health minister Fahrettin Koca received the first vaccine live on television following emergency approval of CoronaVac, developed by China’s Sinovac Biotech.
The decision to go ahead with the Chinese vaccine came even after Brazilian researchers said this week that their trials had showed a disappointing efficacy rate of about 50 per cent. Turkish late-stage trials had deemed the vaccine to be 91.25 per cent effective.
That compares with rates of as much as 95 per cent for the BioNTech/Pfizer vaccine and 94.1 per cent for the Moderna shot. The Oxford university/AstraZeneca jab had a rate as high as 90 per cent, with an average rate of 70 per cent in phase 3 trials.
Sinovac’s chief executive later defended CoronaVac, saying that the low Brazilian efficacy rate could be explained by the fact that trial participants were medical workers who had a high risk of contracting coronavirus.
Indonesia, which this week became the first country outside China to approve the shot, found an efficacy rate of 65.3 per cent.
Andy Murray, the three-times Grand Slam winner and former world number one, has tested positive for coronavirus, raising questions over his ability to participate in the Australian Open tennis tournament next month.
Sir Andy is reportedly isolating in London ahead of the competition, which starts on February 8 in Melbourne. A representative did not immediately respond to a request for comment.
The tennis player’s absence would be a blow for tournament organisers because Roger Federer, who has won the Australian Open six times, will not compete as he is recovering from knee surgery. The Swiss player will miss the competition despite a three-week delay to its start date because of the pandemic.
Players competing in the tournament will be arriving on chartered flights.
Tennys Sandgren, another player, tweeted that he was “on the plane” despite testing positive on Monday.
The Australian Open tweeted that some non-infectious people in recovery “can continue to shed the virus for several months” and that players “are tested every day from their arrival” in the country.
Sir Andy is a five-time finalist in Melbourne, where he gave a teary press conference in 2019 over fears that injury would force him to retire. As well as his titles at Wimbledon and the US Open, he won Olympic Gold medals in 2012 and 2016.
Many British exporters have experienced disruption at UK borders and are planning to make changes to their supply chains, according to an official survey that lays bare the challenges of the Brexit transition period ending and fresh coronavirus restrictions.
About a quarter of UK businesses that operated internationally in the past year and whose trading has been different to normal reported that the disruption at the UK borders affected their ability to import goods and services, an Office for National Statistics survey showed.
About 18 per cent reported that their ability to export had been affected and about one in five said they faced a change in transportation costs.
The survey, conducted in the two weeks to December 27, covers a period in which many countries imposed border restrictions on the UK because of a new strain of the Covid-19 virus. It also highlights the challenges faced by businesses as the Brexit transition period ended at the end of last year and new regulations took effect.
About one in five businesses that were stockpiling goods or materials from EU suppliers said they were planning changes to their supply chains, a larger proportion than less than 3 per cent across all businesses, the survey showed.
Companies also faced disruption from staffing problems. About 8 per cent of businesses reported a decreased number of workers from the EU in the first 10 days of the year. Under a third of UK businesses understood how the new immigration system worked.
The survey also revealed that tighter coronavirus restrictions have dealt a blow to the economy. A rising proportion of workers were put on furlough, retail footfall shrank rapidly and a third of businesses in the hospitality sector had no or low confidence that they would survive the next three months.
Neil Munshi in Lagos
The African Union has secured 270m doses of the Covid-19 vaccine for its 54-member countries from Pfizer, AstraZeneca via the Serum Institute of India, and Johnson & Johnson, as the continent battles a worsening second wave that is testing many weak healthcare systems.
More than 50m doses will be available in the three months from April, African Union chairman and South African president Cyril Ramaphosa said late on Wednesday. The rest will be delivered before the end of the year.
The vaccines will be financed with a $2bn guarantee from the multilateral Afreximbank. Member countries will be able to place orders via the AU in the coming days and will pay on delivery or can access a five-year instalment payment plan via the bank.
The AU is working with the World Bank to provide members with access to roughly $5bn in funding to pay for vaccines.
The initiative, called the African Vaccine Acquisition Task Team, is meant to complement the global Covax scheme that will provide vaccines for up to 20 per cent of people in 92 low-income countries.
But the two initiatives will not be enough for Africa to achieve its goal of vaccinating 60 per cent of its 1.2bn people within two to three years.
Some countries have made their own efforts to secure vaccines, including South Africa, which this week said it had ordered 20m doses.
Martin Arnold in Frankfurt
Germany’s economy shrank 5 per cent last year, less than many economists had expected, underlining how Europe’s largest economy is rebounding faster from the coronavirus pandemic than many of its neighbours.
Gross domestic product fell slightly less in 2020 than the 5.7 per cent decline suffered in 2009 after the global financial crisis, the Federal Statistics Office said on Thursday.
“The coronavirus pandemic left clear marks in almost all economic sectors in 2020,” the statistics office said in a statement. “Production was severely restricted both in the service sectors and in the manufacturing sector.”
However, Germany suffered a less severe decline than the 5.5 per cent contraction forecast last month by the central bank and slightly better than the 5.1 per cent shrinkage expected by economists polled by Reuters.
Germany has benefited from having a large manufacturing sector, which has been less disrupted by coronavirus curbs than the services sector, while enjoying rising exports to China. Its relatively strong fiscal position has allowed the government to support most of the companies and workers affected by the coronavirus restrictions.
Manufacturing orders, industrial production, retail sales, employment and exports data for Germany in November and December were all better than expected – even if some were boosted by a temporary jump in exports to the UK due to pre-Brexit stockpiling.
However, chancellor Angela Merkel this week said the national lockdown introduced in mid-December to tackle rising coronavirus infections, including the closure of most schools and shops, may need to continue until early April.
Frustration has intensified over the slow pace of vaccinations in Germany, where 750,000 people have been vaccinated, fewer than the UK, Italy and Israel.
Philip Georgiadis and Jim Pickard in London
The introduction of coronavirus testing for passengers arriving in England has been delayed until after the weekend to allow travellers more time to prepare for the new rules.
England’s demand for pre-departure tests was due to come into force at 4am on Friday, but has been pushed back until Monday morning.
The Department for Transport only published details of which pre-departure tests it would accept late on Wednesday, raising concerns that passengers on long-haul flights would not have enough time to source and use the approved tests before their flights.
Grant Shapps, the transport secretary, said the change was to “give international arrivals time to prepare”.
Ministers are meeting on Thursday to discuss a ban on travellers from Brazil entering the UK amid concerns about a variant of Covid-19 first identified in that country.
Norwegian Air Shuttle will abandon its attempt to crack the long-haul air market as the low-cost carrier laid out plans to exit bankruptcy protection by all but wiping out its existing shareholders, reducing debt significantly and raising fresh capital.
The low-cost airline will focus on short-haul flights in Europe after concluding that its long-haul flights to the US and Asia were no longer viable as “future demand remains highly uncertain”. Its companies employing long-haul staff in the UK, US, Italy and France are facing bankruptcy.
Norwegian became the highest profile casualty of the worst crisis in the aviation industry in November when it filed for protection from creditors in Ireland after an ill-fated and rapid expansion into long haul left it with one of the highest debt burdens among all carriers.
“Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said chief executive Jacob Schram on Thursday. He was speaking as he presented plans to exit examinership in Ireland, a reorganisation process akin to filing for Chapter 11 in the US.
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A pick-up in hiring for white-collar jobs helped improve deeply depressed fees at recruiter Hays, which cemented its expectations for a profitable first half of its financial year.
The FTSE 250 group said that fees were down 19 per cent compared with a year earlier, better than the 29 per cent drop in the previous quarter. As a result, it updated its expectations for operating profit in the six months ending in December to about £25m, which it previously guided as “modestly profitable”.
The improvement in hiring throughout the quarter was broad-based including in the group’s key markets of Australia, New Zealand, Germany, the UK and Ireland.
However, permanent hiring remains more severely depressed than temporary hiring in all markets, while the UK office job market caught up with other nations after a more severe hit in earlier quarters.
Paul Venables, group finance director at Hays, said that, with £380m of cash at the year-end, it plans to reinstate its dividend policy at interim results in February and expects to resume shareholder payouts.
“What we saw in November and December were the signs of a fairly classic economic recovery,” Mr Venables said, referring to companies taking on more temporary employees. “We expected this to be a more shallow recovery.”
The company added that it was too early to judge the negative impacts of the latest UK and European lockdowns on hiring over the next six months.
Halfords extended its successful run with bikes yet the “seasonally smaller” cycling market in the ensuing three months may not offset the impact of coronavirus restrictions on motoring.
The group, which as an essential retailer stayed open during the UK’s lockdown restrictions, reported total group revenue climbing 11.5 per cent in its third-quarter trading update. Same-store sales rose 9.8 per cent and sales at its car servicing division were up 21.1 per cent.
Demand for ebikes and escooters pushed cycling sales up 35.4 per cent in the 13 weeks to January 1, despite global container shortages and port congestion crimping availability. Motoring same-store sales fell 8.4 per cent as UK traffic declined 25 per cent from pre-pandemic levels.
The group plans to close up to 10 per cent of its property portfolio. It has shut down 33 sites and is to close 47 more before the end of