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Germany on ‘road to recovery’ as business morale brightens further

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BERLIN (Reuters) – German business morale improved more than expected in August as both manufacturing and services picked up steam, a survey showed on Tuesday, boosting hopes that Europe’s largest economy is set for a strong recovery following the massive coronavirus shock.

The Ifo institute said its business climate index rose to 92.6 from a downwardly revised 90.4 in July. This was the fourth monthly increase in a row and came in better than economists’ expectations for 92.2.

Ifo economist Klaus Wohlrabe said he expected the economy to grow by almost 7% on the quarter in the July-September period after it posted a record plunge of 9.7% in the previous three months at the height of the pandemic.

“The German economy is on the road to recovery,” Ifo President Clemens Fuest said in a statement, adding that firms assessed their current business situation much more optimistically than in the previous month.

The Ifo survey recorded the strongest gains in business morale among manufacturers and service providers while sentiment among construction firms was also improving.

Wohlrabe added a note of caution, however.

“The upswing is still fragile. We have not yet reached the pre-crisis level,” he told Reuters, saying the latest spike in new infections underlined the risk of a second wave which could derail the recovery again.

Wohlrabe also pointed out that export expectations had fallen again slightly, in a sign that doing business abroad remained difficult for many German companies.

Record new debt

Germany’s parliament has suspended its debt brake this year to allow the government to finance its crisis response with record new debt of 217.8 billion euros ($257 billion).

The suspension, following years of balanced budgets, means the German state recorded a budget deficit of 51.6 billion euros from January to June, the statistics office said. Measured by the EU’s Maastricht criteria, this is a deficit of 3.2%.

Employment has proven relatively robust during the crisis with the government’s efforts to shield the labour market from the coronavirus shock with short-time work schemes paying off.

The relatively mild impact on employment has helped to stabilise household income and this in return has led to a big increase in household saving as consumers were unable to spend much during the lockdown months from mid-March until May.

The savings rate almost doubled to 20.1% in the second quarter compared with the previous year, the office said.

The German central bank expects household spending to drive a strong recovery in the third quarter, though the economy might not reach its pre-crisis level before 2022.

The government’s stimulus measures include a temporary VAT cut from July to December worth up to 20 billion euros, which Berlin hopes will give household spending an additional push.

“The reopening of the economy will give the German economy a strong boost in the period from July to September,” VP Bank economist Thomas Gitzel said.

But the moment of truth may come in the autumn and winter months, which could see a wave of bankruptcies, Gitzel warned.

“In addition, the negative consequences of structural change in the automobile industry are becoming increasingly evident,” Gitzel said, pointing to many small suppliers in the sector that are struggling to adapt to digitisation and electrification.

($1 = 0.8462 euros)

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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