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June 2021 Global Business Report

Author: socialmedia@taplowgroup.com/Tuesday, June 15, 2021/Categories: News

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In 2021, the region’s economy is expected to resume expansion at 3.4 percent, amid a continued lack of access to vaccines. Macroeconomic policies will in many countries entail some difficult choices.

South Africa

South Africa's current account balance widened to 5% of GDP for the first quarter of the year, up from the 3.7% recorded previously, data from the South African Reserve Bank (SARB) shows.

The current account balance is considered an indicator of an economy's health. It is the difference between credits - incomes and receipts - and debits - imports and payments. In monetary terms the surplus is R267 billion, the second largest recorded. The largest monetary surplus recorded was in the third quarter, at R297.5 billion.

The largest surplus in monetary terms was recorded in the third quarter of 2020, equal to 5.9% of GDP," the SARB said. At the time trade surpluses rebounded as Covid-19 related lockdown restrictions started easing globally,

The SARB said that the first quarter current account surplus is largely attributed to a continuation of a good export performance, on the back of high commodity prices, coupled with a recovery in global economic recovery.

During the quarter there were improvements in both imports and exports, and the trade surplus improved slightly to R430 billion, up 1% from R425 billion reported previously.

"The larger trade surplus resulted from the value of merchandise exports increasing to a new all-time high while the value of imports rose to a lesser extent. The higher value of merchandise exports reflected an increase in prices while merchandise imports resulted from higher volumes," the report read.

Contact: Joyce Ambale, Managing Partner, Africa, E:jambale@taplowgroup.com


Economic activity is expected to grow by 6.9 percent in 2021, slightly lower than predictions in June 2020 in the World Economic Outlook Update.


The economic rebound continues in Australia. Australia has outperformed every major advanced economy with the National economy having “fully recovered lost output caused by the pandemic by March 31, 2021”.

The economic recovery has been quicker and stronger than forecast with the unemployment rate continuing to decline from 7.4% in July 2020 to 5.5% in April 2021. In addition to this Australia’s AAA credit rating has had its credit outlook raised. Australia remains one of just nine countries to hold a AAA credit rating from the three major rating agencies. The National Accounts released in June saw the economy increase 1.8 per cent in the March quarter with output now 0.8 per cent above its pre-pandemic level. Year-on-year growth of 1.1 per cent was better than the consensus estimates of 0.6 per cent.

Private investment rose 5.3 per cent in the March quarter to be 3.6 per cent higher through the year, this is the first rise since the June quarter of 2018. Both business and housing investment increased, supported by government initiatives, and improved confidence, with an 11.6 per cent rise in machinery and equipment. This is significant because it is the strongest increase in 11 years since the December quarter 2009. Residential investment rose 6.4 per cent with increased construction activity.

Consumer spending has been constrained and remains down on pre-pandemic levels and this has been directed to reductions in household and personal debt with significant reductions in credit card debt and credit cards on issue.

Contact: Ian Stacy, Managing Partner, Australia, E:istacy@taplowgroup.com.au


Increasing downward pressure on growth in Q2 and may extend in Q4.

It is anticipated increasing downward pressure on growth in this Q2 and may extend in Q4 2021 due to pent-up demand and weaken exports. The tightening property measures and surging raw material prices also attribute to this trend. Although annual growth forecast is more than 8% for this year, there are more risks on the downside. Big concern about the recent surge of raw material prices.

China is to be increasingly alert to the recent surge of raw material prices. The higher prices may suppress the real demand and squeeze margins for firms. The production and supply chain could also be negatively impacted by the higher prices. China has to take measures to secure supplies and aim to maintain a stable RMB. To cope with surging commodity prices, China has already taken action to boost domestic supply of major raw materials such as coal, steel, and electricity.

The rapid drop in the growth of aggregate financing caused concern of further drop space.The rapid drop in the growth of aggregate financing growth might make China concerned the room for further drop in credit growth is limited. It is expected that China may even ease restriction on some types of financing later this year including speed up issuing government bond financing to secure the drop trend of credit growth.

Slower export growth exerts downward pressure on China’s economic growth. China is urged to add domestic supplies and keep exchange rate stage of RMB Slower export growth will also exert downward pressure on China’s economic growth in Q2 and urge China to bear the economic costs of its carbon-reduction campaign. Slowing export growth will push China to add supplies to offset surging raw materials prices rather no the appreciation of RMB. RMB exchange rates should be not used as a tool to stimulate exports via depreciation or offset the impact of surging global commodity prices via appreciation. China intends to keep exchange rates largely stable against the basket amid China’s post-Covid recovery.

Contact: Derek Zhang, Managing Partner, China. E: derek.zhang@chinadox.com


India’s economy is expected to grow at 8.3% for Fiscal Year 2021-22 as per the World Bank’s latest projections. This rate, however, masked the damage caused by the “enormous” second wave of COVID-19. The world economy is expected to expand 5.6%, the fastest post-recession growth rate in eighty years, but global output will still be 2% below pre-pandemic projections by year-end. For India the massive COVID-19 wave had undermined the sharper than expected rebound in activity for the second half of FY 2020-21 – particularly in services.

India’s employment outlook would be more or less stable for the next quarter of this year, said Manpower Group Employment Outlook Survey conducted across 1303 enterprises in the country. Workforce gains were anticipated in six of the seven industry sectors during the upcoming quarter.

Transportation & Utilities sector would be the strongest job market with a net employment outlook of +10%, while the job outlook for Services sector would be +7%. However, Mining & Construction sector employers expected to trim payrolls, reporting a weak outlook of -2%, found the survey. The strongest hiring pace was recorded in the medium sized organisations followed by the large enterprises with a seasonally adjusted outlook of +8% and +6% respectively.

Honda could soon be “The New Player in India’s EV Market”. The Honda Benly e-electric scooter was recently spotted testing at the ARAI (Automotive Research Association of India) facility in Pune. The electric utility scooter made its international debut at the 2019 Tokyo Motor Show. Honda had announced earlier that it would be importing an electric two-wheeler from China to test in India, and the Honda Benly could be just that.

McLaren Automotive, the division responsible for some of its revered road cars is said to officially arrive in India. A report on Team-BHP cites its source from Instagram which suggest that the supercar maker could announce its India plans and model prices soon. It is reported that McLaren will expand its footprint to the Indian market with one dealership. Reports suggest that Infinity Cars will hold the rights to the super and hypercars from McLaren Automotive.

Contact: Sangeeta Sabharwal, Managing Partner, India E: sangeeta.sabharwal@taplowgroupindia.com

New Zealand

Westpac Bank (Westpac) reported in a recent economic report that it has been roughly a year since New Zealand exited its Covid-19 related lockdown and the economic impacts of the virus are still being felt. New Zealand’s tourism and hospitality sectors are continuing to struggle with the loss of international tourist dollars. And while the recent establishment of travel bubbles with Australia and the Cook Islands has been welcome news, the sector will face big challenges while long-haul travel remains off the cards.

Westpac also reported that the labour market is continuing to firm, with unemployment now down to 4.7%. They are also seeing resilience in household spending, especially on durable items. And on top of that, business sector indicators are pointing to a firming in trading activity, with an increasing number of businesses looking at taking on new staff or increasing their capex.

Overall Westpac report that economic activity remains a bit below pre-Covid levels. However, the recovery is gaining traction. And with continued support from monetary and fiscal policy, Westpac expect domestic economic activity will continue to firm through the back half of 2021 and into 2022. Over time, growth will also be boosted by the rollout of vaccines here and abroad, which will allow for restrictions on international travel to be relaxed. However, that’s likely to occur only gradually, with GDP set to remain below the path it was on before the pandemic for some time yet.

In terms of the labour market, Westpac report that lower net migration will reduce the pool of available workers in some industries, which signals a related lift in wage pressures. However, with the Government looking at a targeted tightening of migration settings, impacts will be varied across sectors. In particular, Westpac believe we are likely to see fewer unskilled workers arriving, which will be particularly important in areas like

Contact: Graeme Sandri, Managing Partner, New Zealand, E: graeme@swr.nz


Concerns over new variants of COVID-19 are not effecting business recovery. However, vaccinations are progressing and thus Europe’s GDP growth is projected to rebound by 4.5 percent in 2021.


Being a small country with an open economy and a structural balance of payments surplus, Denmark’s economy – although prosperous - is highly dependent on foreign trade. This is why the country recorded its deepest fall in GDP in the first half 2020 due to the COVID-19 crisis. As both domestic and external demand normalises, Denmark’s real GDP is forecast to expand by a solid 2.8% in 2021 and around 2.9% in 2022. The Danish economy is characterized by an equitable distribution of income and extensive government welfare measures, with one of the highest GDP per capita in the world.

The two segments impacted the most by the Pandemic are here below and are now both in good progress to recover and rebound.

Industry employs around 18% of the active population and contributes 20.9% of GDP. The major activity sectors are the chemical, pharmaceutical and biotechnology industries, with niche industries in renewable energy and biotechnology. Denmark has limited natural resources, a fact that slows down the development of its heavy industry. However, the country has enough oil and gas reserves to ensure its energy independence.

The services sector contributes almost three-quarters of GDP (64.9%) and employs the largest share of the population (80%). Denmark has a strong banking sector, characterized by a high degree of concentration: domestic banks own more than 85% of the total assets, and three banks control 50% of total assets. Shipping, trade and transportation services are also important for the country’s economy (Denmark is the world’s fifth-largest shipping operator).

Contact: Ole Norby, Managing Partner, Denmark E: onb@taplow.dk


In the midst of a recession, the French economy still managed to create jobs. The 0.1% contraction in Gross Domestic Product (GDP) in the first quarter - following a 1.5% decline in the fourth quarter of 2020 - was accompanied by 88,800 net private jobs created an increase of 0.5%, according to data just released by the National Institute of Statistics and Economic Studies (Insee). In total, between October 2020 and March 2021, the French economy created nearly 60,000 net private jobs despite the contraction of national wealth due to lockdowns.

The latest business surveys, published by both INSEE (the employment climate has returned to its long-term average) and IHS Markit (the employment component of the PMI indices is growing strongly), seem to send rather positive signals for the French employment outlook in the months ahead.

For the second year in a row, France remained the European country that attracted the most foreign direct investment in 2020, with 985 projects, despite a sharp drop against the backdrop of the Covid-19 crisis, according to an annual survey published in early June by the firm EY. The investors questioned believe that France has "relatively well defended its attractiveness", particularly "thanks to the support measures and the recovery plan" announced last autumn. Nearly half of them believe that the plan is more effective than in other European countries. With an 18% drop in foreign investment, France has suffered a sharper decline than the United Kingdom (-12%), which is close behind France with 975 projects, while Germany (930 projects) has limited its decline to 4%. According to EY, this is mainly due to the weight in the French economy of three sectors that are highly exposed to the Covid-19 crisis: aeronautics, automotive and tourism. In detail, industrial equipment and the transport and logistics sector have suffered with a number of projects almost halved. The digital sector has also suffered a sharp decline even if it remains at the top of the projects. Conversely, projects in the pharmaceutical sector have more than doubled, from 26 to 58.

Contact: Stéphane Martinod, Managing Partner, France, E: smartinod@taplowgroup.com


DIW Berlin significantly lowers growth forecast for 2021 to 3.0 percent; 3.8 percent currently expected for 2022, Problems in the corporate sector masked by the suspension of duty for companies to file for insolvency and state aid - number of corporate insolvencies likely to rise significantly

"The German economy is overcoming the pandemic-related crisis and is at the start of a strong upswing," writes the Bundesbank in its projection for the years 2021 to 2023.

Experts expect strong catch-up effects, particularly in the previously particularly impaired service sectors and in private consumption. In addition, the upturn will be driven by exports, which will benefit from the only gradual slowdown in the recovery of world trade.

Under these conditions, the Bundesbank expects calendar-adjusted real gross domestic product (GDP) to grow by just under 4 percent and a good 5 percent respectively in the current and coming year. In 2023, growth should then be somewhat weaker at almost 2 percent. ""The pre-crisis level will be reached again as early as this summer,"" the report states.

The general atmosphere in public in Germany is increasing. Business spirit improves. The partial lockdown is eased, slower than in other counties, step by step, differently from state to state. Shops, hospitality, restaurants, travel, all kind of events are still somehow limited. Covid-Infection numbers decrease significantly. Vaccination is improving but not faster than in other EU countries. Government recovery spending shall continue in Q3.

Most production sectors had grown from export only in this year. Currently many companies face chip shortage problems and cannot produce equipment as demanded. Also car production is effected with a significant shortage. Production and retail sectors now complain congestion in delivery from and to East Asia caused by improving demands and by cargo ships operating under full workload and often in other areas of the planet.

Online delivery and logistics sectors are still performing well while other sectors show mixed results. Companies continue digital transformation and cost cutting efforts.

If possible, employees should still work from home. Next month an office work rate of more than 30% is expected. Unemployment remains low due to short-work programs.

Contact: Peter Knoblich, Senior Partner, Germany, E: akoechling@taplowgroup.com

Contact: Bernd Schlosshauer, Senior Partner, Germany, E: brs@berndschlosshauer.de


Italy’s virus-hit economy is expected to grow 4.1% this year and 4.2% in 2022.

Economic forecasters have cut its initial growth estimates for Italy, published in October, by 0.7 percentage points for this year due to weaker-than-expected growth in the final quarter of 2020 and the first three months of 2021.

Italy’s deficit at 7.8% of GDP this year and at 4.8% in 2022. Hikes in government spending to support the economy drove the country’s deficit to 9.5% of GDP at the end of last year.

There will be new mergers in the Italian banking sector over the coming months, the CEO of Italy’s largest bank by market capitalization has predicted.

Speaking to CNBC’s, Intesa Sanpaolo CEO Carlo Messina said: “I think that in the next year, so within 12 months, there will be some M&A deal in the country. I don’t know what kind of bank can be merged or put together, but the future for the country is to enter into another season of merger(s).”

His comment comes after S&P Global Market Intelligence said in a note in March that Italy is on the cusp of being “the busiest market for bank mergers in Europe in 2021.”

Contact: Giovanna Brambilla, Managing Partner, Italy, E: giovanna.brambilla@valuesearch.it


Unemployment has finally begun to decrease and is currently 145,000 people (registered) 6.4%. Folio rate from Bank of Norway has been 0 percent for the past 11 months. Economists expect this rate to be increased 1 or 2 times during second half of 2021, and further in 2022.

Despite low interest rate Norwegians has record high private savings in banks. Expected to be caused by reduced ability to travel and activity in cultural events, as well as fine dining.

Many industries are slowly starting to get back to where they were before Covid, but many are still suffering.

Contact: Hans Holter - Sorensen, Managing Partner, Norway, E: hhs@taplow.no  


According to the 45th Russian Economic Report by the World Bank, Russia’s GDP contraction of 3,0% is relatively better compared to the world economy with 3,8% or advanced economies with 5,4%. This was mainly achieved by macro-fiscal stabilization efforts, regulation and supervision in the banking sector, stronger connections to China, small service sector and large public sector that stabilized growth in unemployment. The report presents a GDP growth forecast of 3,2% for both 2021 and 2022. For 2023 it is 2,3%. Higher oil prices, global economic recovery and mild domestic monetary conditions are expected to support Russia’s recovery.

The Central Bank chief Elvira Nabiullina warned at the St. Petersburg International Economic Forum (SPIEF) that the current inflation could not be seen as only a temporary trend, rather more a serious threat to Russia’s economic recovery. The current inflation rate of 5,5% is above the Central Bank’s target of 4%.

Russian and Belarusian relations have been empowered with the second instalment of a billion-dollar loan to Belarus. Belarus’ Finance Ministry received USD 500 million on the 2nd of June. The EU imported $1.5 billion of chemicals and another $1.3 billion energy products from Belarus last year. Belarus is preparing for new EU sanctions on its vital export industries.

Russia’s Ministry of Economic Development decided to increase its planned expenses on the electric vehicle support program from 418 billion RUB to 777 billion RUB.

To reduce its carbon footprint of domestic products, Russia decided to launch “green certificates” from March 2022. These certificates are supposed to create a system within Russia to prove that industrial goods were produced using electricity from renewable and low-carbon sources.

Contact: Henric Nilsson, Managing Partner, Russia, E: henric.nilsson@humansearch.ru


In its outlook report, OCDE institution forecasts that Spain's gross domestic product will increase by 5.9% in 2021 and 6.3% in 2022 thanks to the progress of the vaccination campaign, which will allow and facilitate the gradual recovery of tourism.

From the second half of 2021 onwards, the economy will experience significant dynamism spurred by the various measures of the national recovery plan. The easing of restrictions and uncertainty will translate into a drop in savings that will boost consumption and a significant increase in investment.

However, the OECD warns of a "risk" factor in this idyllic recovery: "the increase in [business] insolvencies once government aid is removed". Thus, the withdrawal of fiscal stimuli should, according to the report, be "gradual" once the economy is on a stable growth path.

The economic think tank puts special emphasis on the situation of companies and the labour market. "If the crisis lasts longer than expected, it may be necessary to increase the amount of funding for this type of direct aid," the OECD points out, referring to direct aid aimed at protecting the business fabric, which, in its opinion, should be implemented "quickly".

As for employment, the head of division in the OECD's Economics Department, Aída Caldera, recalls that Spain has one of the highest rates of temporary employment in the EU, a negative factor for productivity as it encourages a reduction in investment and generates excessive mobility. Therefore, the economist advises "clarifying and limiting the ways in which temporary employment can be contracted".

Contact: Carmen Alarcon, Managing Partner, Spain, E: calarcon@taplowgroup.com


The UK economy grew by 2.3% in April as the easing of Covid-19 lockdown measures fuelled a rebound in consumer spending, according to official figures.

The UK hosted the G7 summit a few days ago in Cornwall, the annual summit of the heads of government and state of the UK, US, Canada, France, Germany, Italy, and Japan. The EU, Australia, India, South Africa, and South Korea were in attendance with numerous initiatives announced to tackle the pandemic, economic development and climate change.

The Office for National Statistics (ONS) said GDP rose for the third consecutive month as pandemic restrictions were scaled back across all four nations of the UK, with the economy growing at the fastest pace since the July reopening from lockdown last year.

Retail sales grew sharply as non-essential shops reopened, alongside a pickup in bookings for caravan parks and holiday lets, and the reopening of hospitality venues outdoors lifted spending in pubs, bars and restaurants. Overall GDP grew by 1.5% in the three months to April compared with the previous three months.

Rishi Sunak, the chancellor, said the latest figures were “a promising sign that our economy is beginning to recover”. The ONS said the annual rate of growth in April was 27.6%, demonstrating the difference from the worst month of the pandemic a year earlier, as the economy recovers from the biggest collapse in output for more than 300 years.

However, further ground remains to be recovered, with the economy still about 4% below its pre-pandemic level as concerns mount over the fallout from rising Covid infections fuelled by the Delta variant, first detected in India.

Contact: Mark Firth, Managing Partner, UK, E: mfirth@taplowgroup.com


Regional economic activity is projected to grow by 3.7% in 2021, stock markets, key commodity prices and external conditions improve.


According to the June 8, 2021 “Conjuncture Letter” from IPEA “Institute for Applied Economic Research”, an institute sheltered by the Economy Ministry of Brazil, the Brazilian internal demand for local and imported industrial goods fell by 4.5% in April last, representing a 2.6% drop in local demand, a retreat of 10.6% in the imported industrial goods in the moving quarter ended in April, against an increase of 10% in the previous period.

In the interannual comparison, the demand for industrial good increase by 28.9% against April of 2020. As a result, the moving quarter showed an increase of 15.6% in comparison with the same period of 2020. Taking as a basis the 12-month accumulated variance, total demand registered a null variance whilst industrial production accumulated a 1.1% growth, according to IBGE the “Brazilian Institute for Geography and Statistics”, an official government organ.

According to IPEA, Brazilian work force totalled 85.6 million people in March last, a fall of 4.8% as compared to March 2020 (89.9 million), after a retreat of 2.6%, versus March 2019. March 2021 has seen a retreat of 0.3% in the occupied work force, as compared to the previous month.

The formal/legally registered employment mass, for the last 12-month period, has grown by 1,935 million workers, whereas 2021 year-to-date growth reached 957.889 jobs. Despite of the expansion of the employed had grown as from 80.3 million to 86.1 million – July 2020-January 2021, the unemployed rate has stabilized in 14.1%, yet a high figure in this regard.

IPEA shows that the pandemic has been particularly grave toward the younger and lesser educated groups. In the fourth quarter of 2020, those between 18 and 24 years old were most affected by unemployment also, peaking at 29.8%, meaning that there are almost 4.1 million youngsters looking for inexistent jobs.

For those with education below high school, unemployment rate grew from 18.5% to 23.7%, from the fourth quarter of 2019 and the same period of 2020.

With the apparent end of the “Emergency Aid” (pandemic social program of cash giving away), ranging from R$ 150,00 (US$ 28.00) to R$ 375,00 (US$ 70.00), with an average value of R$ 250,00 (US$ 47.00), it is expected that a large amount of unemployed people will actively look for employment.

As regards current perspective for the Brazilian labour market, IPEA points out that even with the acceleration of the economic activity, for the second semester of this year, the expected newly generated jobs will not be sufficient to take care of the huge unemployed mass of people and, as previously mentioned, the most adversely affected will be the youngest groups.

Contact: Tácito Bocaiuva, Managing Partner, Brazil, E: tbocaiuva@taplowgroup.com


Minority and Female candidate requirements are increasing. As we include diverse representation in each assignment it has not changed our approach but continues to be an articulated expectation – an advantage for us.

Interest is increasing in specialty skills in all aspects of business including but not limited to environmental and other socially responsible criteria – we note that some recently announced hires are experts in the policy issues but have not had the practical exposure to the experts in the products or strategies which they will be advising on the socially responsible issues. Investment managers have to be particularly careful not to lose performance and require expertise in Socially Responsible Investment regardless of the staff scarcity.

Measurement experts for the impact of SRI are in high demand but there are challenges in the basis for measurements and remediation.

Employment and GDP appear to continue to rise almost unabated. Modest inflation is viewed as likely and to the extent that cost increases ($34,000 just for lumber for new homes – almost 2x prior to the current building surge) demand is slowing slightly.

Microchip shortages are dramatically impacting automobile and many other high cost manufactured products leading to dramatic increases in pricing for used cars and construction equipment.

Contact: Steve Schrenzel, Managing Partner, USA, E: sschrenzel@taplowes.com


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