VENEZUELAN CENTER FOR STUDIES ON CHINA委内瑞拉中国问题研究中⼼

WORLD ECONOMIC

WEEKLY REPORTWEEK FROM 10 TO 14 AUGUST 2020

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Where we are

TODAY

REPORTS AND ECONOMIC EVENTS

At the event entitled “United States and LatinAmerica and the Caribbean: a dialoguetowards post-COVID-19 recovery withsustainability and equality, Alicia Bárcenaindicated that the dialogue between bothparties (the United States and Latin Americaand the Caribbean) should be based in keyelements such as access to external financing,broader access to the US market in thecontext of the new global economicgeography that is generating a root of thecrisis, and incentives for the location ofsuppliers in closer sectors (nearshoring) andthe diversification of supply sources fromLatin America and the Caribbean.

“In a global economy that will be moreuncertain and more regionalized, what kindof dialogue should we have between theUnited States, Latin America, and theCaribbean to support economic recovery?Uncertainty still persists about what typeof recovery we will have and whateconomic policy measures will be needed toface the emergency and support therecovery, ”warned Bárcena.

The senior United Nations official said thatECLAC has already made five proposals forthe short term that include the delivery of abasic emergency income for six months forthe population living in poverty, accompaniedby a bonus against hunger .

ECLAC CALLS FOR A RENEWED DIALOGUE BETWEEN THEUNITED STATES, LATIN AMERICA AND THE CARIBBEAN

the extension of payment terms and graceperiods for small and medium-sizedcompanies; expansionary fiscal andmonetary policies to support a longerperiod of spending (which will be structural)with unconventional instruments; politicaland fiscal pacts towards universal,progressive and redistributive socialprotection; and access to concessionalfinancing for middle-income countries.

EU says economy falls 15%annually in 2Q20; 12.1% quarterly

The euro zone economy fell 15% and that ofthe European bloc 11.7% in the secondquarter of the year compared to the sameperiod of the previous year, as a result ofthe impact of the covid-19 pandemic,according to seasonally adjusted figurespublished by Eurostat. the official agency ofthe European Union.

Both of these declines are the worst seensince recording began in 1995, Eurostatsaid in its timely estimate.

In its quarterly comparison, the grossdomestic product of the euro zone and theEuropean Union also registered historicalfalls, falling 12.1% and 11.7% between Apriland June, respectively, according toseasonally adjusted data from the Europeanagency. "These were by far the steepestdeclines observed since the series began in1995," Eurostat noted.

According to Wikipedia, an annual reportis a comprehensive report on acompany's activities throughout thepreceding year. Annual reports areintended to give shareholders and otherinterested people information.

Germany warns that full recovery willtake time despite expectedimprovement

While rapid improvement continues in Germany'spowerful industrial sector, there will be a negativeeffect from weak demand from other countriesthat are still being hit by the pandemic, accordingto the ministry. The ministry said it will benecessary to see how the pandemic develops inGermany and abroad to see if there is a furthereconomic recovery.

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Colombia's economy registers a15.7% contraction in the secondquarter

Colombia's economy contracted 15.7% year-on-year in the second quarter, its worstquarterly performance in recent history, thegovernment reported on Friday. The NationalAdministrative Department of Statistics (DANE)also revised the growth figure for theColombian economy for the first quarter of2020 to 1.4%, compared to the same periodlast year, from an initial 1.1%.

"Since DANE is responsible, we can affirmwith certainty that this quarterly growth isthe strongest in its negative acceptance,"said the director of the government agency incharge of statistics, Juan Daniel Oviedo. Theeconomy contracted 20% in April, 16.6% in Mayand 11.1% in June

The contraction in the second quartercompared to the first quarter was 14.9 /%. Atthe end of the first half of the year, theColombian economy registered a contraction of7.42% compared to the same period of 2109.

US says industrial production rises3% in July, but falls 8.2% annually

Industrial production in the United Statesincreased 3% in July compared to June, whichimplied its third advance followed after thebrake registered between March and April bythe national confinement to stop the covid-19pandemic, according to seasonally adjusteddata from the Federal Reserve (Fed). Thegrowth of industrial activity in the largesteconomy in the world was, however, less thanin the previous two months, when thereopening of activities led to advances notseen in a decade.

"Still, the index in July was 8.4% below itspre-pandemic level in February," the Fedsaid in a statement. "Most of the industriesshowed increases, although they were muchsmaller in magnitude than those registered inJune." In its annual comparison, industrialactivity had a contraction of 8.2% compared tothat registered in July 2019, in this casemeasured in figures without seasonaladjustment, the Fed said.

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The UK goes into recession with thebiggest contraction for a quarter onrecord.

The United Kingdom has experienced arecession for the first time since the 2008credit crisis, which has occurred when grossdomestic product (GDP) fell 20.4% betweenApril and June, the second consecutive quarterof contraction. The National Statistics Officereleased the figures on Wednesday showingthe extent of the impact of COVID-19.

The data from April to June represents thelargest contraction for a quarter since theagency began to record this type of data in1955. In the first quarter -January to March-,British GDP had fallen by 2.2%, but theEconomic deterioration worsened as of April asthe country's economy suffered a halt due toconfinement due to the pandemic.

The ONS reported this week that the numberof wage earners with permanent employmentin the country fell by 730,000 people in thethree months from May to July, and theunemployment rate remained stable at 3.9%.That source admitted that he faced challengesin calculating GDP due to the alteration ineconomic activity and announced that thefigures will be revised in the coming months.

Brazil's economic activity plummets11% in the second quarter

Brazil's economic activity collapsed 10.94% inthe second quarter of this year compared tothe previous three months, the Central Bankreported on Friday. The Economic ActivityIndex is considered as a preliminary figure ofthe gross domestic product (GDP), which theGovernment will release on September 1, andreflects the strong economic impact of thehealth crisis in Brazil. If this retraction isconfirmed, the largest South Americaneconomy will enter a "technical recession"after having two consecutive negativequarters, after the 1.5% drop in GDPregistered between January and March ofthis year.

According to analysts consulted by the CentralBank, the Brazilian economy will close 2020with a fall of 5.6%, although internationalorganizations, such as the World Bank and theInternational Monetary Fund, are morepessimistic and place this retraction between8 and 9% . The effects of that deep recessionwere still latent in the country, with a double-digit unemployment rate that now, with thepandemic, has shot above 13%, equivalent to12.8 million people in search of a job.

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Where we are

TODAY

The United States market closed with a mixedsign this Friday; revaluations in the oil and gas,telecommunications, and finance sectorspushed the indices higher, while declines inthe utilities, healthcare, and technologysectors drove markets lower.

At the end of the session in New York, the S&P500 was down 0.02%, and the NASDAQComposite was down 0.21%.

Applied Materials Inc stocks accelerated theirgains to their highest ever level, hitting 3.92%,or 2.55, to 67.62.

The CBOE Volatility Index, which measures thevolatility of S&P 500 options, declined 0.36%to 22.05, marking a new bottom in 3 months.

Gold Futures for December delivery was down0.85%, or 16.80, to $ 1953.60 a troy ounce.

Looking at the other commodities, crude oilfutures for September delivery fell 0.02%,or 0.01, to stay at $ 42.23 a barrel, whilecrude oil futures for October delivery fell0.02%, or 0.01, up to $ 44.95 a barrel.

EUR / USD recovered 0.26% to 1.1843, whileUSD / JPY fell 0.30% to 106.59. The dollarindex lost 0.25% to 93.088.

The institutional investment curvein bitcoin accelerates

Bitcoin is increasing its appeal to institutionalinvestors. There are not only a growingnumber of companies that dedicate hundredsof millions of dollars to investing in bitcoin, inorder to diversify their portfolio.Last June, Fidelity Investments conducted asurvey among large institutional investorssuch as pension funds, hedge funds, familyoffices and financial advisers. 36% of the 774investors interviewed stated that they alreadyhave investments in cryptocurrencies,predominantly in bitcoin.

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STOCK EXCHANGES AND CRYPTOCURRENCIES

US STOCKS WERE UNCHANGED AT CLOSE

Venezuelan PDVSA restarts Amuayrefinery distillation unit

State-owned Petróleos de Venezuela (PDVSA)has restarted a distillation unit at the Amuayrefinery, with a capacity of 645,000 barrelsper day (bpd), a union leader and a companyworker told Reuters on Tuesday. Amuaytogether with Cardón make up the largestrefining complex in Venezuela.

The oil company plans to ship the naphthaproduced by distillation unit number 4 to theneighboring 310,000 bpd Cardón refinery,which serves as a raw material for gasolineproduction, as the OPEC nation faces a newwave of fuel shortages. In June PDVSArestarted the Cardón catalytic cracking unit,which is key to hydrocarbon production, butstopped it again in July due to a failure in itsown distillation unit, leaving the catalyticcracker without raw material.

The only operational refinery is El Palito, with146,000 bpd, located in the center of theSouth American country. The plant producesaround 20,000 bpd of gasoline, which isinsufficient to meet local demand, forcingthousands of drivers to wait in long lines torefuel.

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VENEZUELA

DirecTV signal returns to Venezuelaunder the control of the companyScale Capital

The television signal for DirecTV subscribers isback in Venezuela after three months ofsuspension due to the United States sanctions,announced the National TelecommunicationsCommission (Conatel) of the South Americancountry.

"We inform that Directv, through the companyScale Capital, restored the television signal bysubscription; said restoration complies with thelegal provisions dictated by the Supreme Courtof Justice (TSJ) for the protection of users,"Conatel wrote in his twitter account.

The company Scale Capital reported through astatement the purchase of Directv'ssubsidiaries in Venezuela, after reaching anagreement with DirecTV Latin America LLC,after the American AT&T stated theimpossibility of taking channels sanctioned bythe United States off the air. because it wouldmean the breach of local laws.

The new Directv owners explained that theservice will be available throughout the countryin the next few hours and free of charge for thenext 90 days.

Scale Capital has companies related totelecommunications, artificial intelligenceapplied to education, payment platforms andcontent transmission platforms, as stated on itsweb portal. The company is present in theUnited States, the United Kingdom and Chile.

The indicator had collapsed by 13.5% year-on-year in the first two months of 2020, while inMarch it showed a negative 1.1%, in April a riseof 3.9%, in May an increase of 4.4% and in Junea rise of 4.8%.

The ONE also released other indicators, such asretail sales, important data for measuringdomestic consumer demand and one of thepillars of the change in the economic modelpromoted by Beijing.

This section registered a year-on-year fall of1.1% in July, which, nevertheless, represents animprovement after recording greaterinterannual decreases in the months of June(-1.8%), May (-2.8%) , April (-7.5%) and March(-15.8%).

On the other hand, investment in fixed assetsaccumulated in the first seven months of theyear a fall of 1.6% compared to the -3.1%registered in the accumulated between Januaryand June, according to ONE. On the other hand,the urban unemployment rate, another of theindicators released today, remained at 5.7%,the same figure as that registered the previousmonth, according to the agency.

ONE said in a statement that the data showsthat "production and supply continue torecover, while demand grows gradually andemployment remains stable. There are newdriving forces for growth and marketconfidence has also improved, so that thenational economy maintains a stablerecovery trend ".

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CHINA

CHINESE INDUSTRIAL PRODUCTION GROWS 4.8% YEAR-ON-YEAR IN JULY

The Chinese economy seems to beovercoming the hit of the COVID-19pandemic after registering in the secondquarter of the year a return to growth evenhigher than expected by analysts, with anadvance in gross domestic product (GDP) inthat period of 3.2% in year-on-year terms.

Asian markets fell back on Friday after thedisappointing set of economic indicators,which raised concerns about the fragilitywith which China was emerging from thecoronavirus pandemic.

However, data from the National StatisticalOffice on Friday showed weaker-than-expected year-on-year industrial productiongrowth and retail sales extended theirdecline for the seventh consecutive monthin July. This trend was slightly offset by moreconsistent property investment, whichshowed that public aid was supportingconstruction activity.

Where we are

TODAY

Russian Federation

China

United States

Foreign Trade: Russian trade began itsrebound in June. The trade surplusrebounded to US$5.3 billion, a 44% increasefrom May.

Monetary Aggregates: China's creditdemand expectedly slowed down in July, aspolicymakers turned down the level ofsupport after robust second-quarter GDPgrowth, but policy remains accommodative togrowth. The M2 money supply growth fell to10.7% y/y from 11.1% in June, while aggregatefinancing increased by CNY1.68 trillion, downfrom the CNY3.4 trillion growth in the priormonth.Industrial Production: China’s industrialproduction continued to grow 4.8% y/y in July,the same pace as in June, as external demandthrived.

Oil Inventories: A larger-than-expecteddecline in oil inventories will put upwardpressure on oil prices. Commercial crude oilinventories fell by 4.5 million barrels in theweek ended August 7Jobless Claims: Weekly initial jobless claimsare signaling further improvement in the labormarket. Seasonally adjusted initial filingsdecreased by 228,000 to 963,000 in the weekended August 8. Further, not seasonallyadjusted claims declined by 156,453 to831,856, the second straight reading below 1million after crossing that threshold in everyweek since the pandemic began.

Mexico

India

Malaysia

Monetary Policy: Mexico’s central bankcontinued to ease monetary conditions inAugust, although the monetary space hasnarrowed significantly. Given the economy’sdeep contraction, the central bank decided toreduce the funding interest rate by 50 basispoints in August to 4.5%.Industrial Production: Mexico’s industrycontinued to report a significant annualcontraction in June, although it advancedmonthly. The index of industrial productionreported an annual contraction of 16.7%after falling 30.7% in the previous monthand 3% a year earlier.

Foreign Trade: India’s trade deficit sank to$4.83 billion in July following June's $790million surplus, the largest surplus everposted. The deficit has, however, narrowedby 64% y/y.Industrial Production: Industrialproduction in India declined 16.6% y/y inJune. This compares favorably with the34.7% y/y decline in May (before revision)and the 57.6% y/y decline in April.

GDP: Malaysia’s GDP plunged 17.1% y/y inthe second quarter, reflecting strictmovement control orders that were inplace from March to control the spread ofthe pandemic.

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OFFICIAL STATISTICS OF THE WEEK