Business

SEOUL - South Korea's central bank slashed its growth forecast on Thursday, predicting the world's 12th-largest economy will shrink more than one per cent this year as it braces for a surge of coronavirus infections.

The country had been largely returning to normal after mostly bringing its outbreak under control, but multiple cluster infections in recent days have raised fresh fears over a nationwide pandemic.

Its trade-dependent economy has been battered by the impact of the virus on the rest of the world.

The economy is now expected to shrink 1.3 per cent in 2020, the Bank of Korea said, its second downward revision in four months having lowered its outlook in May to a 0.2 per cent contraction, from an earlier forecast of 2.1 per cent growth.

"The recovery of domestic economic growth is likely to be slower than previously forecast, largely due to the domestic resurgence of COVID-19," the bank said in a statement.

"Uncertainties around the future path of GDP growth are also judged to be very high," it added.

The latest figure would represent the worst performance since 1998, when the economy shrank 5.1 per cent in the aftermath of the Asian financial crisis.

The latest projection came as South Korean authorities battle several new coronavirus clusters -- mostly linked to Protestant churches -- reporting 441 new infections on Thursday, the latest in a series of near-six-month highs.

Even so the OECD club of developed economies is predicting the South will record the best -- or least bad -- economic performance among its 37 members in 2020.

The Bank of Korea left its key interest rate unchanged at a record low of 0.5 per cent, citing economic fallout from the pandemic.

LONDON — Britain's economy will lose about £22 billion ($29 billion, 24 billion euros) this year on the coronavirus-induced collapse of global travel, which could imperil 3 million jobs, an industry body forecast on Wednesday.

International visitor spending could plunge by 78 per cent from 2019, equating to a loss of £60 million per day or £420 million a week, the World Travel & Tourism Council (WTTC) predicted in a key report.

"Travellers and tourists are staying away from the UK in droves because of continuing uncertainty around travel restrictions designed to curb the spread of COVID-19," the WTTC stated.

It continued: "The severe impact on UK travel and tourism is laid bare by WTTC as the economic fallout from coronavirus continues to burn its way through the sector.”Nearly 3 million jobs in the UK supported by travel and tourism are at risk of being lost in a 'worst case' scenario mapped out by WTTC economic modelling."

The country’s economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record.

Tourists remain reluctant to visit because Britain is the European country worst hit by the coronavirus.

'Years to recover' 

Travel has also been discouraged after the UK government recently re-imposed quarantine on those returning from countries including Austria, Croatia, France, The Netherlands and Spain.

The WTTC added on Wednesday that London has been hardest hit by the travel collapse because around 85 per cent of tourist spending in the capital is from foreign visitors.

"The economic pain and suffering caused to millions of households across the UK, who are dependent upon Travel & Tourism for their livelihoods, is evident from the latest figures," added WTTC President Gloria Guevara in the report.

"The lack of international travel caused by the pandemic could wipe out more than £22 billion from the UK economy alone... from which it could take years to recover. 

"It could also threaten London's position as one of the world's premier hubs for business and leisure travel which could see other destinations take over.

"We urgently need to replace stop-start quarantine measures with rapid, comprehensive and cost-effective test and trace programmes at departure points across the country."

British tourism's lobbying body VisitBritain had forecast on Tuesday that the number of foreign tourists will plummet by 73 per cent in 2020 to 11 million people on the back of the pandemic, which has grounded aircraft worldwide.

SHUBRA BELOULA, Egypt — At midnight, Eman Mehanna switches on her headlamp and begins her day's work picking jasmine flowers, as their powerful fragrance wafts far across the fields in Egypt's fertile Nile Delta.

Egypt's Gharbiya region is the heartland of its jasmine harvest. The aromatic oils extracted for perfumes from here make up over half the global supply, according to international trade figures.

"We have been picking jasmine since we were children," Mehanna said, gathering blossoms by hand in the village of Shubra Beloula, around 100 kilometres north of the capital Cairo.

The white petals, plucked from densely-packed rows of chest-high green bushes of "royal jasmine" — Jasminum grandiflorum — burst out of her wicker basket.

During the harvest season from June until November, picking begins around midnight and finishes a few hours after dawn each day.

It is a tough job, but a hard-working picker can harvest as much as 5 kilogrammes of petals a day.

While it is cooler to work after dark, the key reason harvesting is done at night is because it is only then that the flowers fully open.

"You really need to concentrate on looking for the blossoming flowers," Mehanna said. "We leave the closed ones for the following day."

After dawn, she swaps her headlight for a hat to shade her from the burning sun.

Petals to paste 

Egypt and India dominate the production of jasmine extract for perfumes, making up around 95 per cent of supply, according to the International Federation of Essential Oils and Aroma Trades (IFEAT).

Jasmine trade is estimated to pull in some $6.5 million annually for Egypt, providing income to around 50,000 people, IFEAT says.

In Egypt, more than 90 per cent of jasmine fields are in Gharbiya governorate, fed by the rich minerals and waters of the Nile, shortly before the river reaches the Mediterranean Sea.

Farming is concentrated in the neighbouring districts of Qutur — where the village of Shubra Beloula is located — and Basyoun, otherwise famous as the birthplace of Egyptian and Liverpool football star Mohamed Salah.

On either side of a dusty road are lush green fields dotted with gleaming white flowers.

Early in the morning, the pickers unload their baskets into crates, which are then stacked high onto pickup trucks and taken for processing.

The Fakhry essential oils factory handles around 70 per cent of the region's floral production.

One of the first steps is to compress and grind the delicate blossoms down.

From that paste, the precious scented oils can be extracted by distillation.

"This was the first essential oils factory established in Egypt," factory floor manager Badr Atef told AFP, as he supervised the weighing and handing over of petal-packed crates.

Tough work 

The scent of flowers is intense.

According to Atef, factory owner Ahmed Fakhry was inspired to farm jasmine when, as a young student in the 1960s, he visited the town of Grasse, the birthplace of French perfumes, on the Cote d'Azur.

Returning to Egypt, Fakhry introduced his new perfume knowledge and set up commercial jasmine farming and processing.

"Now 20 tonnes of jasmine flowers are picked daily" in Egypt, Atef said, estimating that some 400 hectares of the scented plant are farmed in the Gharbiya region.

From all those flowers, some 5 tonnes of dense jasmine paste is finally produced each year.

Egyptian farmers have long complained that the low production costs of their big rival India drive their prices down.

But the economic impact of the novel coronavirus pandemic has been harder still, with demand dropping sharply, farmers said.

Picking flowers is back-breaking work.

"Stand in the sun for a couple of minutes, and you'll see how hard this job is," said 60-year-old picker Waafa, who refused to harvest flowers this year because prices were too low.

Even on a good year, some pickers earn little more than a couple of dollars a day for hours of work, income Waafa slammed as "measly".

"Everything is expensive nowadays," she said.

But others say that jasmine-picking season is a time they enjoy.

"The sweetness is when we're all together picking," said Mehanna. "We swap stories and have fun."

LONDON — Tesco will create 16,000 permanent UK jobs to meet a coronavirus-fuelled surge in online grocery demand, the supermarket giant said on Monday in a boost for the country's embattled retail sector. 

Britain's biggest retailer added in a statement that it expects "the majority" of jobs to be filled by temporary staff drafted in during the pandemic to cope with soaring home food deliveries amid the country's lockdown.

"Since the start of the pandemic, our colleagues have helped us to more than double our online capacity, safely serving nearly 1.5 million customers every week and prioritising vulnerable customers to ensure they get the food they need," said Jason Tarry, chief executive for Tesco UK and Ireland.

"These new roles will help us continue to meet online demand for the long term, and will create permanent employment opportunities for 16,000 people across the UK," he added in a statement. 

The new permanent positions are in addition to around 4,000 full-time jobs created by Tesco during the pandemic.

Some 47,000 temporary staff joined Tesco at the peak of the coronavirus, most of whom have reached the end of their contracts.

Pre-pandemic, online sales at Tesco accounted for about 9 per cent of total revenue.

That has jumped to more than 16 per cent, with Tesco expecting online sales this year to reach more than £5.5 billion ($7.1 billion, 6 billion euros).

Monday's update comes after major UK companies announced thousands of job cuts in recent weeks, notably across the aviation, energy and retail sectors, owing to COVID-19 fallout.

Britain's economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record.

In October, the UK government is to end a furlough scheme that has been paying up to 80 per cent of wages for around ten million workers during the pandemic.

Analysts said this would result in soaring unemployment across Britain.

Travel sector warning 

The Association of British Travel Agents (ABTA) warned that more than 90,000 travel jobs have been lost or remain under threat owing to coronavirus fallout.

Far fewer Britons are heading abroad, particularly after the UK government reimposed quarantine on travellers returning from nations including Austria, Croatia, France, The Netherlands and Spain.

"Travel desperately needs the government in its next review to provide tailored support or tens of thousands more jobs will be lost," said ABTA Chief Executive Mark Tanzer.

The gloomy survey came after student specialist holiday firm STA Travel UK collapsed on Friday.

Among British retailers hit hard by virus fallout is Marks and Spencer, which last week said it was axing 7,000 jobs as wary customers steer clear of its stores, which mainly sell clothes and food.

NEW YORK - Video app TikTok said on Saturday it will challenge in court a Trump administration crackdown on the popular Chinese-owned service, which Washington accuses of being a national security threat.

As tensions soar between the world's two biggest economies, US President Donald Trump signed an executive order on August 6 giving Americans 45 days to stop doing business with TikTok's Chinese parent company ByteDance — effectively setting a deadline for a potential pressured sale of the viral video sensation to a US company.

"Even though we strongly disagree with the Administration's concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution. What we encountered instead was a lack of due process as the Administration paid no attention to facts and tried to insert itself into negotiations between private businesses," TikTok said in a statement.

"To ensure that the rule of law is not discarded and that our company and users are treated fairly, we have no choice but to challenge the Executive Order through the judicial system," it said, adding it expects to file its suit next week.

TikTok's kaleidoscopic feeds of short video clips feature everything from hair-dye tutorials to dance routines and jokes about daily life. It has been downloaded 175 million times in the US and more than a billion times around the world. 

Trump claims TikTok could be used by China to track the locations of federal employees, build dossiers on people for blackmail, and conduct corporate espionage.

The company has said it has never provided any US user data to the Chinese government, and Beijing has blasted Trump's crackdown as political.

The US measures come ahead of November 3 elections in which Trump, who is behind his rival Joe Biden in the polls, is campaigning hard on an increasingly strident anti-Beijing message.

Trump and China 

Trump has increasingly taken a confrontational stance on China, challenging it on trade, military and economic fronts.

Shortly after Trump announced his moves against TikTok in early August, the United States slapped sanctions on Hong Kong's leader over the Chinese security clampdown after last year's pro-democracy demonstrations.

Microsoft and Oracle are possible suitors for TikTok's US operations.

Reports have said Oracle — whose chairman Larry Ellison has raised millions in campaign funds for Trump — was weighing a bid for TikTok's operations in the US, Canada, Australia and New Zealand.

The Trump administration has also given ByteDance a 90-day deadline to divest in TikTok before the app is banned in the United States.

The measures move away from the long-promoted American ideal of a global, open internet and could invite other countries to follow suit, analysts told AFP previously.

"It's really an attempt to fragment the internet and the global information society along US and Chinese lines, and shut China out of the information economy," Milton Mueller, a Georgia Tech professor and founder of the Internet Governance Project said previously.

ISTANBUL — President Recep Tayyip Erdogan on Friday said Turkey had made a historic discovery of gas in the Black Sea, but would still speed up contentious exploration in the Mediterranean that has pitted it against Greece and the EU.

Turkey hopes the discovery can help wean it off imported energy, including from Russia, which comes at a high cost at a time when the local currency is weakening and the economy is more fragile because of the coronavirus.

Erdogan said the 320-billion-cubic-metre deep sea find was made at a site Turkish vessel Fatih began exploring last month.

He added that he hoped to see the first gas reach Turkish consumers in 2023, the 100th anniversary of the birth of the modern republic.

"Turkey made the biggest discovery of natural gas in its history in the Black Sea," a delighted Erdogan said during a speech in Istanbul's Dolmabahce Palace.

"My Lord has opened the door to unprecedented wealth for us," he enthused.

The Fatih, Turkey's first drilling vessel, is named after Fatih Sultan Mehmet, the Ottoman Sultan who conquered Constantinople — current-day Istanbul — in 1453.

The vessel made the discovery in the Tuna-1 field off the coast of Eregli town in the northern province of Zonguldak after beginning the search on July 20, Erdogan said.

'Reasons to be cautious' 

The Turkish lira gained value against the dollar on Erdogan's promise on Wednesday to report "good news" on Friday, but fell after the size of the find was less than half of that suggested in initial reports.

Analysts were also wary of overplaying the discovery's significance, pointing out that deep sea drilling is expensive and takes time.

"There are reasons to be cautious," said Jason Tuvey, senior emerging markets economist at Capital Economics.

"For one thing, it will take time for the necessary infrastructure to be put in place before the gas can be extracted," he said in a research note.

Tuvey added "the boost to Turkey's external position may only be temporary."

Ozgur Unluhisarcikli, Ankara director of the German Marshall Fund, tweeted the discovery was "not bad at all [but] not a game changer either".

The volume of gas announced by Erdogan would cover Turkey's total natural gas needs for six years, at current consumption rates.

High energy import bill 

Turkish finance minister and Erdogan's son-in-law, Berat Albayrak, speaking aboard the Fatih, said the discovery and future potential finds could reduce Turkey's import-heavy trade balance by cutting its high energy import bill.

Turkey's energy import bill corresponded to two per cent of total economic output last year, according to Capital Economics, with most purchases coming from Russia, Iran and Iraq.

Turkey's Energy Market Regulatory Authority said in January the country's annual cost of energy imports was between $12 billion and $13 billion (10.2-11.1 billion euros).

This month, Erdogan ordered the resumption of controversial energy exploration off the southern coast close to a Greek island in disputed eastern Mediterranean waters.

The issue has put Turkey on a collision course with Greece, Cyprus and the European Union, and exacerbated tensions with France, which has stepped up its military presence in the region.

But Erdogan showed no sign of yielding to the EU's repeated call to immediately end the eastern Mediterranean search.

"We will accelerate our activities in the Mediterranean with the deployment by the end of the year of [drilling ship] Kanuni, which is currently under maintenance," he said.

"God willing we expect similar good news," Erdogan added.

Turkey dispatched the seismic research ship Oruc Reis accompanied by warships to the region on August 10, angering Greece who said the move threatened peace.

LONDON — British government debt has exceeded £2 trillion for the first time following massive state borrowing as the coronavirus pandemic pushed the UK economy into a record recession, official data showed on Friday.

At the end of July, total accumulated debt hit £2.004 trillion ($2.61 trillion, 2.2 trillion euros), the Office for National Statistics (ONS) said in a statement.

That was equivalent to more than 100 per cent of the country's annual gross domestic product, or total economic output, for the first time since 1961. 

By comparison, Apple this week became the first US company to have a market valuation totalling $2 trillion (£1.5 trillion), boosted as it is seen as a key winner in the new post-coronavirus economy.

Compared with July 2019, UK debt increased by £227.6 billion, reflecting the huge increase in borrowing needed to tackle the pandemic.

 'Significant strain' 

"This crisis has put the public finances under significant strain as we have seen a hit to our economy and taken action to support millions of jobs, businesses and livelihoods," finance minister Rishi Sunak said. 

"Without that support things would have been far worse."

Net borrowing between April and the end of July is estimated to have hit £150.5 billion, the ONS said.

Last month's figure alone came in at £26.7 billion, as the UK emerged from a strict lockdown imposed at the end of March to curb the spread of the coronavirus.

"Today's figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions," said Sunak, whose official title is Chancellor of the Exchequer. 

"It is also why we are taking action now to support the growth and jobs which pay for our public service, by helping businesses to reopen safely."

 Pound pummelled 

The pound fell by more than 1.0 percent against the dollar on Friday as the EU and Britain traded blame for the lack of progress after the latest round of post-Brexit trade talks, with Brussels warning that a deal looked unlikely.

Sterling was changing hands at $1.3074 in afternoon trade, compared with $1.3214 late Thursday. 

The pound is being punished "by Brexit talks which seem to be going nowhere," said Neil Wilson, analyst at Markets.com.

"The two sides are still far from reaching agreement on key terms" of their post-Brexit relationship.

 Retail recovery 

Separately, data showed that British retail sales jumped by 3.6 percent in July from June as shops, restaurants and pubs reopened.

"Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade and online sales remain at historically high levels," ONS statistician Jonathan Athow said. 

"While still below their pre-pandemic levels, both fuel and clothing sales continued to recover.

"Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants," Athow said. 

Marks and Spencer, the British food and clothes retailer, announced this week that it was cutting 7,000 jobs as COVID-19 increasingly pushes customers to shop online. 

The company joins the likes of UK department store chains Debenhams and John Lewis, as well as pharmacy group Boots, in cutting thousands of jobs owing to pandemic fallout.

Britain's economy shrank by one fifth in the second quarter, more than any European neighbour, as the lockdown plunged the country into its deepest recession on record. 

Even though the UK economy is beginning to rebound as the government eases strict confinement measures — private sector output grew rapidly in August according to data Friday — analysts expect a surge in unemployment by the end of the year.

In October, Sunak plans to end the government's furlough scheme that is paying up to 80 per cent of wages for around 10 million workers during the pandemic.

NEW YORK — Apple on Wednesday became the first US company to reach $2 trillion in market value in the latest demonstration of how tech giants have benefited from the upheaval of the coronavirus.

The iPhone maker attained the distinction in mid-morning trading and was up 1 per cent at $467.02 near 15:20 GMT. The company had previously become the first giant to hit $1 trillion in market value in March 2018.

Apple is followed by other technology companies, including Amazon, Microsoft and Google parent Alphabet, all of which now have more than $1 trillion in market value.

Shares in Apple have roughly doubled from March lows, an astonishing performance which has lifted chief executive Tim Cook's net worth to $1 billion for the first time, according to a Bloomberg Billionaires Index calculation.

Even as other large tech firms have shot higher on robust demand during lockdowns, Apple has outpaced its rivals by delivering strong sales of gadgetry including wearables and tablets, along with new apps and services which have gained ground during the global health crisis.

In the past quarter ending in June, Apple reported profits climbed 8 per cent to $11.2 billion and revenues jumped 11 per cent to $59.7 billion.

Apple's rise comes amid a broader rally in technology shares as employees around the country shift to working at home amid the coronavirus pandemic and social distancing protocols. 

The tech-rich Nasdaq has hit records more than 30 times in 2020, including on Tuesday.

A major factor in Apple's success has been leadership from Cook, who took over just ahead of the death of Steve Jobs in 2011.

"He didn't invent anything, but what he has done is keep a firm hand on the tiller, steering the ship and keeping the culture intact," said analyst Laura Martin at Needham & Company.

"He deserves a lot of credit for making the most out of Steve Jobs's inventions."

Apple's rise comes amid a broader rally in technology shares as employees around the country shift to working at home amid the coronavirus pandemic and social distancing protocols.

In the most recent quarter, Apple enjoyed a modest rise in smartphone revenue and robust increases in sales of iPads and Mac computers amid elevated demand for remote education and work-from-home buyers.

The company also benefited from services such as digital payments and streaming and from increased sales in smartwatches as interest in health and fitness applications rises.

LONDON — Global stock markets marked time on Wednesday against a backdrop of recent massive gains, growing China-US tensions, fresh virus flare-ups and signs of a possible breakthrough in deadlocked US stimulus talks, dealers said.

Oil was in focus ahead of US stockpiles data and a virtual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies to discuss their recent output cuts after crude prices were shattered by a coronavirus-driven plunge in energy demand.

The dollar, which on Tuesday hit the lowest level against the euro in more than two years on the prospect of more huge US stimulus, was little changed as the market waited on the Federal Reserve's minutes from its latest policy meeting.

"As for the oil market, traders are a bit cautious today because of the US crude inventory data" amid a supply glut, noted Naeem Aslam, chief market analyst at Avatrade.

"Traders are also keeping an eye on the OPEC+ gathering."

Wall Street highs 

On Tuesday, upbeat US data helped drive the S&P 500 to another record while the Nasdaq also pushed to an all-time high thanks to a surge in demand for tech stocks that are benefiting from lockdowns.

After Asian markets were mixed overnight, European markets were slightly firmer as Wall Street opened little changed.

Democrats and Republicans remain stalemated over what should go into another virus stimulus package but House Speaker Nancy Pelosi provided a ray of hope by saying her party could be willing to make cuts to its offer to seal a deal, then return to thrash out other issues after November's elections.

The $3.5 trillion package agreed earlier this year, combined with a wall of cash and loose monetary policies from the Federal Reserve (Fed), have helped US stock markets soar from their March troughs.

US-China woes 

Souring US-China relations remain a concern, with the latest salvo out of Washington coming in a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed new rules that could see these firms de-listed. 

The announcement comes with the two superpowers locked in several stand-offs ranging from Hong Kong, trade and the coronavirus, and US accusations of digital espionage.

There is also some trepidation about a trade pact signed between the two in January, which observers say is the crucial issue, with any sign that it could be in peril likely to spark another sharp market drop.

But while talks on the deal were called off last weekend, there is a general feeling that both sides still want to keep it in place.