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Euro zone economic outlook steady but job recovery at high risk: Reuters Poll

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BENGALURU (Reuters) – A full bounceback from the euro zone’s deepest recession on record will take two years or more, according to a Reuters poll of economists who also said there is a high risk the job recovery underway reverses by the end of 2020.

Europe was badly hit earlier this year by the coronavirus pandemic, which has now infected more than 22 million people globally. But stringent lockdowns and contact tracing helped get the numbers down and allowed swift re-openings.

Along with trillions of euros’ worth of European Central Bank stimulus and a 750 billion euro European Union recovery fund that kicks in next year, sentiment has improved, and the economy is bouncing back along with the euro.

The consensus from the Aug 14-19 Reuters poll points to 8.1% growth this quarter compared with the previous one, easily the fastest on record, following a historic 12.1% contraction in Q2. That is unchanged from the July poll median.

In May, around the time lockdowns were lifted in most euro zone countries, the Q3 forecast was for 7.2% growth.

Quarterly growth will then slow sharply to 3.0% in Q4, slightly better than the 2.8% predicted last month and still a historically robust rate.

However, more than 70% of economists, or 25 of 35 who replied to an additional question, said it would take two or more years for euro zone GDP to reach pre-COVID-19 levels. Ten respondents said within two years and none said within a year.

“Despite the recent recovery in economic indicators, the better-than-feared performance of labour markets and the recent agreement on the Recovery Fund, we still see various downside risks to the economic recovery,” said Elwin de Groot, head of macro strategy at Rabobank.

“Although there have been encouraging reports with regard to a potential (COVID-19) vaccine by early 2021, as long there isn’t any effective one, containment measures will have to be kept in place regardless. A second series of partial lockdowns could have some serious economic effects.”

Around three-quarters of common contributors to this month’s and last month’s poll either lowered their GDP forecasts for the remainder of the year or kept them unchanged.

Asked to predict their worst-case scenario, the median response was 4.0% this quarter, much better than the 2.0% forecast in last month’s poll. But the worst-case view points to a 2.0% contraction in Q4, the most pessimistic yet for that period.

On an annual basis, the economy was expected to shrink 8.2% this year and then grow 5.5% next, or -10.3% this year and no growth in 2021 on a worst-case basis.

Much will depend on how the job market performs from now on.

Thanks to wide-reaching government furlough programmes that have helped businesses retain workers, euro zone unemployment has risen only slightly to 7.8% in July from 7.2% in February.

But about 85% of economists in the poll, 28 of 33 who responded to an additional question, said the risk the job recovery reverses by year-end was high, including four who said very high.

“Euro zone unemployment almost looks like a Cinderella story. With barely any increase in unemployment, it is currently the belle of the global labour market ball, at least compared to many other developed economies,” said Carsten Brzeski, chief economist, eurozone and global head of macro at ING.

“When the clock strikes midnight, however, and short-term work schemes come to an end, the fairy tale is unlikely to continue. We expect a second wave of job losses towards the end of the year and going into 2021.”

The jobless rate is expected to rise to 8.9% in 2020 and 9.3% in 2021, according to a July Reuters poll.

Inflation was not expected to touch the ECB’s target of below, but close to 2% through to 2022, according to the latest August survey. The ECB’s key interest rates are expected to stay on hold through the forecast horizon.

Reporting and photo: Reuters

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Maldives celebrates arrival of 2024’s 1 millionth tourist

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Maldives on Thursday welcomed the one millionth tourist to visit this year.

The one millionth tourist is a Thai named Sutapa Amonwivat, who arrived from Singapore with her husband and two children. This is her second visit to Maldives.

Maldives Marketing and Public Relations Corporation (MMPRC) and the Ministry of Tourism gave a warm welcome to Sutapa at the Velana International Airport (VIA) Thursday afternoon. She was welcomed at the VIA by tourism minister Ibrahim Faisal, MMPRC Managing Director Ibrahim Shiury and senior officials of various relevant agencies.

After welcoming her with traditional offerings, she was presented with various gifts by the ministry, MMPRC, customs, immigration, Maldives Association of Travel Agents and Tour Operators (MATATO) and Trans Maldivian Airways (TMA).

Maldives reached one million tourists in June, three weeks earlier than last year. The number of tourists reached one million on July 16, 2023.

Maldives expects to reach 2 million tourists this year.

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New air route connects Chongqing to Maldives

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Chongqing Airlines on Monday began its inaugural flights to Maldives.

The Chongqing-Male route, scheduled three times a week, is expected to strengthen the bonds between China and the Maldives, opening up exciting new opportunities for tourism and cultural exchange.

The inaugural flight was welcomed upon its arrival at Velana International Airport (VIA) in Maldives, where local officials and tourism representatives expressed their enthusiasm for this new development.

“We warmly welcome our friends from China to our beautiful islands. This new connection strengthens our bonds and opens up new opportunities for tourism,” the tourism ministry said on X.

Maldives currently welcomes four airlines from China, including China Eastern, Beijing Capital Airlines, Xiamen Airlines.

In January, Maldives government urged tourism stakeholders in both Maldives and China to ramp up efforts to restore China’s position as the primary source market for Maldives tourism, a status held before the onset of Covid-19.

China, being the largest source market for Maldives tourism before the pandemic, saw a resumption of tourist arrivals from January 2023 after a three-year hiatus due to the pandemic. In 2023, the Maldives welcomed 187,118 Chinese tourists, marking a significant recovery in numbers. This year, the Maldives has welcomed the most number of tourists from China, with over 107,940 or 11.5 percent of total arrivals by June 12. 

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CROSSROADS Maldives Introduces Weixin Pay at resorts for seamless guest experience

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CROSSROADS Maldives has introduced WeChat Pay, widely known as Weixin Pay in China, across its world-class resorts, SAii Lagoon Maldives, Curio Collection by Hilton, and Hard Rock Hotel Maldives. This payment option is made available to enhance the convenience and overall experience for guests from China, making their stay in the Maldives more enjoyable and hassle-free.

Understanding the needs of the diverse guests, CROSSROADS Maldives has integrated WeChat Pay into operations, allowing guests from China to easily and securely conduct transactions using a payment method familiar to them. The introduction of WeChat Pay is a testament to CROSSROADS Maldives’ dedication to enhancing guest satisfaction by offering exceptional experiences at every turn. What is also expected through this initiative is that the guests could benefit from better foreign exchange rates, translating to better savings on their expenditures during their stay.

The option is available for guests in-house conveniently at both resorts as well as across the Marina at CROSSROADS Maldives where a wider variety of unparalleled dining and retail experiences are available for all guests. The day visitors from China will also therefore equally benefit from this new introduction at the Maldives’ premier multi-island integrated leisure destination.

SAii Lagoon Maldives, Curio Collection by Hilton, is a vibrant tropical escape that offers unique and locally inspired experiences. The resort features spacious rooms and villas, a variety of dining options, and an array of recreational activities designed to cater to the desires of modern travellers. Guests can escape to the island’s SAiisational natural beauty, enjoy water sports, and indulge in spa treatments, all while relishing the personalised service that defines Hilton’s Curio Collection.

Hard Rock Hotel Maldives brings the iconic Hard Rock spirit to the tranquil shores of the Maldives. This family-friendly resort offers a perfect blend of relaxation and entertainment, featuring music-inspired experiences, live performances, and the brand’s signature amenities. With luxurious accommodations, diverse dining options, and a plethora of activities for all ages, Hard Rock Hotel Maldives ensures an unforgettable holiday experience for every guest.

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