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COVID-19 crushes U.S. economy in second quarter; rising virus cases loom over recovery

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WASHINGTON (Reuters) – The U.S. economy suffered its biggest blow since the Great Depression in the second quarter as the COVID-19 pandemic shattered consumer and business spending, and a nascent recovery is under threat from a resurgence in new cases of coronavirus.

The bulk of the deepest contraction in at least 73 years reported by the Commerce Department on Thursday occurred in April when activity almost ground to an abrupt halt after restaurants, bars and factories among others were shuttered in mid-March to slow the spread of coronavirus.

More than five years of growth have been wiped out. With the recovery faltering, pressure is mounting for the White House and Congress to agree on a second stimulus package. President Donald Trump, who is trailing Democratic challenger and former Vice President Joe Biden in opinion polls, said on Wednesday he was in no hurry. Trump on Thursday raised the possibility of delaying the Nov. 3 presidential election.

“This is hard to swallow,” said Jason Reed, finance professor at the University of Notre Dame’s Mendoza College of Business. “Right now, the American economy is speeding toward a fiscal cliff. Not only do we need Americans to take serious action preventing the spread of the disease, but we also need Congress to agree on another stimulus package and quickly.

Gross domestic product collapsed at a 32.9% annualised rate last quarter, the deepest decline in output since the government started keeping records in 1947. The drop in GDP was more than triple the previous all-time decline of 10% in the second quarter of 1958. The economy contracted at a 5.0% pace in the first quarter. It fell into recession in February.

Economists polled by Reuters had forecast GDP slumping at a 34.1% rate in the April-June quarter.

On a year-on-year basis GDP fell a record 9.5% last quarter. Output shrank 10.6% in the first half. The level of GDP has dropped to levels last seen in the last quarter of 2014.

Though activity picked up starting in May, momentum has slowed amid the explosion of COVID-19 infections, especially in the densely populated South and West regions where authorities in hard-hit areas are closing businesses again and pausing reopenings. That has tempered hopes of a sharp rebound in growth in the third quarter.

Federal Reserve Chair Jerome Powell on Wednesday acknowledged the slowdown in activity. The U.S. central bank kept interest rates near zero and pledged to continue pumping money into the economy.

Trump’s campaign shrugged off the GDP slump, saying the economy was “rebounding.” Biden blamed a leadership “failure,” and urged “a massive public health response to save lives and get our economy back up to speed.” Stocks on Wall Street fell. The dollar dipped against a basket of currencies. U.S. Treasury prices rose.

Broad historic declines

Economists say without the historic fiscal package of nearly $3 trillion, the economic contraction would have been deeper. The package offered companies help paying wages and gave millions of unemployed Americans a weekly $600 supplement, which expires on Friday. Many companies have exhausted their loans.

This, together with the sky-rocketing coronavirus infections is keeping layoffs elevated. In a separate report on Thursday, the Labor Department said initial claims for unemployment benefits increased 12,000 to a seasonally adjusted 1.434 million in the week ending July 25. A staggering 30.2 million Americans were receiving unemployment checks in the week ending July 11.

“Tens of millions of workers have lost their jobs over the past few months and remain unemployed, and the pace of improvement in the labor market has slowed,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh.

“These $600 payments are adding about $75 billion per month to household income, at a time when income from work has plummeted. The loss of huge amounts of unemployment income in the near term would be a significant drag on consumer spending.”

There have been claims, mostly from Republicans, that the generous jobless benefits are discouraging some of the unemployed from looking for work. The GDP report showed income at the disposal of households surged $1.53 trillion in the second quarter compared to an increase of $157.8 billion in the January-March period.

A significant portion of the income was stashed away, boosting savings to $4.69 trillion from $1.59 trillion in the first quarter. Consumer spending, which accounts for more than two-thirds of the U.S. economy, plunged at a 34.6% pace last quarter.

Business investment tumbled at a 27% rate. It was pulled down by spending on equipment, which collapsed at a 37.7% rate. Investment is equipment has now contracted for five straight quarters. Boeing reported a bigger-than-expected quarterly loss on Wednesday and slashed production on its widebody programs.

The pandemic has also crushed oil prices, leading to deep cuts in shale oil production and layoffs. Spending on nonresidential structures such as mining exploration, shafts and wells plunged at a record 34.9% rate.

Investment in homebuilding tumbled at a 38.7% rate. Government spending rose, though state and local government outlays fell. Trade added to GDP, but inventories were a drag.

Reporting and photo: Reuters

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BBM’s ‘Studio of Culinary Excellence’ opens at MNU to bridge classroom, industry

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The best way to secure the future is to create it.

Creating that future through specific, purposeful initiatives is what drives people of purpose—and, in turn, moves us all closer to the future we desire.

The Maldives is a compelling case study of a tourism-driven economy. Look around and ask why an event is being staged, what someone is working on, or where a new initiative is leading, and the answer will often point to the hospitality sector. Securing the future, therefore, is inextricably linked to strengthening and advancing that sector.

Here, “strengthening” means making the sector’s contribution more sustainable; ensuring that a greater share of its growth benefits the community; continuing to offer a compelling value proposition to the discerning global traveller; and ensuring that visitor experiences continue to generate an unparalleled reputation and valuable referrals.

To achieve these outcomes in the future, it is essential that current and future generations of the local community engage actively with the industry. Making hospitality appealing and aspirational, enhancing the quality of delivery and service, and building a pipeline of skills and talent into the sector are areas in which initiatives, inspiration, infrastructure and investment should be concentrated.

It is firmly in this context that Mr Ismail Hilmy, Chairman and Managing Director of BBM, initiated the establishment of a modern, exceptionally well-equipped and thoughtfully designed model kitchen, aptly named the Studio of Culinary Excellence. By donating the Studio to MNU, under whose auspices it will serve the Maldivian culinary community, Mr Hilmy is responding directly to the need for deeper community engagement. At the heart of BBM’s framework for industry-outreach initiatives— “Because tomorrows start today”—is Mr Hilmy’s ethos of fostering engagement and vibrancy in the industry.

“For our students, the gap between the classroom and a working resort kitchen has always been the hardest one to close,” said Dr Shehenaaz Adam, Vice Chancellor of the Maldives National University. “The Studio of Culinary Excellence closes that gap. Students can now train on the same equipment and to the same standards they will encounter on their first day in the industry. We are grateful to BBM for a partnership that goes well beyond a donation, and we look forward to the Studio becoming a place where the university and the industry learn from one another.”

The Studio therefore creates an opportunity to develop a pipeline of skills and talent in service of the industry.

“Embedding purpose in our work has been an ongoing endeavour at BBM. It keeps us connected to our stakeholders and builds insight, understanding and trust. Being a meaningful partner to academia as we move into the future gives us a great sense of fulfilment and guides our initiatives under the banner, ‘Because tomorrows start today,’” said AVS Subrahmanyam, Chief Operating Officer of BBM.

But what is the value of physical infrastructure without the corresponding spark of aspiration and ambition?

As Ali Afrah Hassan, Executive Representative at Chairman’s Office – BBM, aptly observed: “The Studio offers students and members of the community hands-on experience with world-class equipment, together with knowledge-sharing masterclasses. Who knows—in the not-too-distant future, a Michelin-starred Maldivian chef may fondly credit some of their inspiration to time spent at the Studio!”

Now that is the mind and heart in sync—working towards a future that is aspirational, ambitious and entirely attainable.

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BBM Hulhumalé Phase 2 opening promotion winner receives Honda Airblade

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Bestbuy Maldives (BBM) has presented a brand-new Honda Airblade motorbike to the winner of a lucky draw held to mark the opening of its newest wholesale outlet in Hulhumalé Phase 2.

The outlet, located at Lot 20286 on Nirolhu Magu, opened on 16 February 2026 as part of BBM’s expansion of its wholesale operations.

To celebrate the opening and thank customers for their continued support, BBM introduced a special lucky draw exclusively for customers who made purchases from the new outlet on its opening day.

Customers who purchased products during the opening were eligible to enter the draw, with a Honda Airblade motorbike offered as the grand prize.

The lucky draw was conducted on 13 August 2026, with Ibrahim Shifaz of Vagthun Vaguthah outlet selected as the winner.

Shifaz was recently presented with the ceremonial key to the Honda Airblade by AVS Subrahmanyam, Chief Operating Officer of Bestbuy Maldives.

The promotion formed part of BBM’s activities surrounding the opening of its Hulhumalé Phase 2 outlet, which provides customers with access to the company’s range of wholesale products from the growing residential and commercial area.

Bestbuy Maldives is a supplier and distributor serving businesses across the Maldives, including customers in the hospitality, food service and retail sectors.

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Football legends receive FIFA World Cup 2026 match balls signed by President Muizzu

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Male’ Aerated Water Company (MAWC), the authorised bottler of The Coca-Cola Company in the Maldives, on Thursday hosted the Official FIFA World Cup 2026™ Match Ball Handover Ceremony, presenting Football Legends of Maldives with official FIFA World Cup 2026™ match balls signed personally by Dr Mohamed Muizzu, President of Maldives.

Held in partnership with the Ministry of Youth Empowerment, Sports and Fitness, the ceremony recognised former national footballers whose achievements, service and influence have helped shape football in the Maldives and inspired generations of players and supporters.

The Coca-Cola Company has been an official partner of FIFA since 1974, making it one of the longest-standing partnerships in the global sport. For MAWC, the handover brought that global partnership to life locally by connecting the FIFA World Cup with people who have contributed to Maldivian football history.

As the sole authorised Coca-Cola bottler in the Maldives for over 35 years, MAWC has supported local sport through partnerships, campaigns and community initiatives. The ceremony continued that commitment by recognising the legacy of players who represented the Maldives and contributed to the growth of football in the country.

“Maldives’ football legends have given generations of supporters moments of pride and have played an important role in shaping the country’s sporting history. At MAWC, we believe recognising their contribution is as important as supporting the next generation. Through our partnership with Coca-Cola and FIFA, and in collaboration with the Ministry of Youth Empowerment, Sports and Fitness, we are honoured to celebrate their legacy. These match balls are a token of our appreciation for what they have given to Maldivian football,” said Milind Derasari, Chief Operating Officer, MAWC.

Adding to the excitement of the football season, MAWC ran a nationwide FIFA World Cup 2026™ consumer promotion from 21 March to 24 May 2026. Eight winners received an all-expenses-paid experience for two to attend a FIFA World Cup 2026™ match. Hundreds more won Coca-Cola branded merchandise and other prizes during the campaign, bringing the excitement of the world’s largest football tournament to consumers across the Maldives.

MAWC remains committed to building partnerships that support the development of sports across the Maldives, working with the Government of Maldives and other partners.

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