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Business Sweden’s Global Executive Brief
1
World at the crossroads: Recovery, relaunch or relapse?
July 7th 2020
This brief aims to give executives information on the development and recovery process post COVID-19 in selected global markets. For a monthly update sign-up here.
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BUSINESS SWEDEN
Agenda
2
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
● How we can help
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BUSINESS SWEDEN
While advanced G20 economies have announced trillions in fiscal measures, the
pandemic is far from over with daily cases reaching record highs in June
3
+86%
- 5% GDP
Pandemic center has shifted, seeing substantial growth of new
confirmed cases in the U.S., Brazil and India
~9 tn USD
Pandemic status
Economic impact
Global increase of confirmed COVID-19 cases since June. Up
from 6.14 million June 1st to11.42 million July 6th
Fear of second wave in Europe as many countries lift
restrictions and start vacations
Executive summary
750 bn EUR
Source: Our World In Data, WHO, IMF, Business Sweden Analysis Note: *GDP projections updated June 2020, further downward revisions are expected
EU recovery package announced. For more details
see Monthly Feature
Projected globally for 2020, as of June 2020*, further downward
revisions are expected
In fiscal measures announced by G20 economies.
~4 tn USD in additional spending or foregone revenues and ~5 tn USD in equity injections, loans,
asset purchase or debt assumption
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BUSINESS SWEDEN
Agenda
4
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
● How we can help
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BUSINESS SWEDEN 5
● Germany assumes the six-month rotating European Council presidency in July, a crucial period that will determine the future of the European Union
● The European Commission has proposed both a new long-term budget of 1.1 tn EUR, as well as an additional 750 bn EUR recovery fund called Next Generation EU. The timeline is urgent as a deal must be struck before the end of 2020
● The European Council will meet in person July 17th-18th to discuss proposals related to the recovery fund and the long-term budget, and hopes are high in Germany and France for an agreement over the course of the summer
● Like most EU funding, a majority of the 750 bn EUR proposal will be distributed directly back to the Member States, concentrated on the most severely impacted regions. The current proposal sees more than half of the 310 bn EUR in grants going to Italy, Spain, France, Poland and Germany
Source: Politico, Business Sweden analysis
EU prepares for a budget summit but faces
difficulty reaching agreement on recovery fundThe most important thing for Swedish companies to understand is how EU funding is distributed – most funding is distributed back to countries and managed on a national or regional level.
To increase likelihood of accessing EU funding, companies should understand what policies each region or country prioritizes and ensure their products or solutions match these priority areas.
From our office in The Hague we also cover EU Affairs and have extensive experience helping companies to understand EU funding and potential strategies to access funding or investment.
Recommendations for Swedish companies
● Be prepared as major decisions will be made in the upcoming weeks this summer
● Contact Business Sweden to receive guidance in understanding the complex framework involving the different EU, national, and regional authorities handling EU funds
● Ensure your solutions match these policies to increase the likelihood of accessing EU funds
Tomas KorsemanTrade & Invest Commissioner, Benelux
Acting Market Area Director, Central &
Western Europe
“
“
Monthly feature
Contact us to access:“Unlocking EU funding – a guide for Swedish companies”
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BUSINESS SWEDEN 6
The EU’s recovery strategy involves
investment in green and digital solutions
European Green Deal
● A renovation wave to modernize buildings and critical infrastructure including one million charging points for electric vehicles
● A more circular economy to eliminate foreign dependencies
● Farm-to-fork strategy to support affordable, safe and sustainable food
● Just Transition Fund focuses on re-skilling workers and creating opportunities for SMEs in the transition to low-carbon economy
POLICY FUNDAMENTALS
Digitalization
● Investment into better connectivity and Europe’s industrial and technological presence including 5G, AI, and cloud data
● A digital economy as a motor for innovation & new jobs
● New cybersecurity strategy to boost EU level cooperation
● Digital Services Act to safeguard security of online platforms
● Data Act to outline legislation on data sharing and governance
750 bn EUR
recovery
fund
560 bn
EUR to
Member
States
● The Recovery and Resilience Facility will offer direct support for Member States to carry out investments and reforms
● Focus is on green and digital transitions and the resilience of national economies, linked to the EU priorities
● Support for all Member States, but focused on the most affected regions
Business Sweden’s guide to EU funding
● Every seven years, the EU negotiates a Multiannual Financial Framework (MFF)– a long-term budget that helps to give stability and predictability to EU financing
● This budget helps to translate EU policy goals into funding for different initiatives
● Nearly 75% of the EU funding is re-distributed to the Member States – and is managed by regional authorities in each country
― In Sweden e.g., a large amount of funding is channeled through Tillväxtverket
● Very little funding is managed by the EU itself, and allocated on a project basis for solving challenges on a European level
● To access EU funding, it is vital to understand which authority manages funding, and identify which policies, sectors, and types of projects are funded in each country
● What sectors and types of projects that receive funding may differ between regions
Monthly feature
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BUSINESS SWEDEN
Agenda
7
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
● How we can help
#%$#%$#
BUSINESS SWEDEN 8
Confirmed cases are increasing in middle income countries, most high income
countries are decreasing, but the curve is moving upwards due to recent U.S. spike
62 049
1 430
40 361
86 455
2020-05-01
40 000
2020-04-01 2020-07-01
30 000
10 000
2020-03-01
20 000
90 000
2020-02-01
50 000
2020-06-012020-01-01
0
70 000
60 000
80 000
Lower middle income
Low income
Upper middle income
High income
Daily new confirmed cases of COVID-19 per income level, 7-day average until July 6th, 2020
Source: Our World in Data
The recent increase in new
confirmed COVID-19 cases in the
U.S. is impacting the curve for
high income countries
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BUSINESS SWEDEN 9
Of all major global economies, only China is
expected to see positive GDP growth in 2020
Pre COVID-19 Post COVID-19
2020 2020 2021 2022
World 3.1% -4.6% 6.7% 4.5%
EuroZone 1.0% -7.8% 6.3% 3.1%
Middle East 2.3% -6.8% 4.8% 4.3%
Africa 3.0% -5.8% 5.8% 4.9%
USA 1.7% -6.1% 6.3% 3.8%
China 6.0% +0.8% 8.3% 5.4%
Japan 0.3% -6.5% 3.2% 3.3%
Germany 0.7% -6.1% 5.3% 3.2%
India 6.0% -5.7% 10.8% 5.6%
Real GDP projections 2020-2022, pre and post COVID-19 impact
Source: Business Sweden Analysis Note: Purchasing power adjusted GDP projections as per June 15th2020
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BUSINESS SWEDEN
A majority of APAC and EMEA markets have left lockdown and are gradually
recovering, while Latin America is still highly locked down
10
AMERICAS
MarketLockdown
stateEconomic recovery
Canada
USA
Brazil
Colombia
Mexico
Chile
EMEA
MarketLockdown
stateEconomic recovery
Austria
Czech Republic
France
Netherlands
Denmark
Finland
Germany
Italy
Morocco
Norway
Russia
South Africa
Sweden
Turkey
UAE
Poland
Saudi Arabia
Spain
UK
Kenya
APAC
MarketLockdown
stateEconomic recovery
China
Hong Kong
Taiwan
Thailand
Vietnam
Japan
South Korea
Indonesia
Malaysia
Singapore
Australia
India
Philippines
Source: Business Sweden Analysis
For more details, please visit our interactive map
Lockdown state Economic recovery
Very high Standstill
HighEarly open with
restrictions
MediumMostly open and in
recovery
Low Open and growing
Normal Pre-crisis level
Legend
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BUSINESS SWEDEN
Agenda
11
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
− Americas
− EMEA
− APAC
● Country reports
● How we can help
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BUSINESS SWEDEN
The world is gradually reopening, with fiscal measures in place in most countries
and greatest amount of green recovery initiatives seen in Europe
12
Americas EMEA APAC
● Americas region currently in early stages of recovery with mixed levels of restrictions. Most manufacturing activity is picking up, but overall travel and social functions are still quite limited
● Chile is still in strict lockdown compared to other countries in the Americas
● U.S. and Canada are farthest along in re-opening; however, the U.S. is seeing increased spikes in new confirmed cases, forcing some cities and states to slow or put a pause on the re-opening process
● Colombia, Canada and Brazil are either re-activating paused infrastructure projects or investing in new activity
● Stimulus focuses around tax, credits or employment subsidies; few have current recovery plans surrounding corporate transformation or sustainable initiatives
● European countries are mostly open and in recovery, most implementing support and stimulus packages across industries, company sizes and to households
● Most European countries have defined sustainable recovery plans, introducing concrete measures for a green transformation
● Restrictions to travel exist in most parts of Middle East & Africa while business operations are reduced or open. Fiscal and financial measures are implemented
● Hospitality industries in Southern Europe as well as in the UAE will be hit hard due to travel restrictions and low customer demand
● Oil dependent Middle East countries are expected to be hit hard by lowered oil prices
● Businesses and societal functions are back to normal in Northeast Asia (China, Japan, South Korea, Taiwan), while other regions are on the trajectory to re-open
● Export volumes have not yet recovered and some supply chain disruptions remain
● China’s industrial resumption rate is estimated to be ~90% of the pre-crisis level, but main economic challenge now is weak external demand and some returning lockdowns in Beijing and close provinces
● Many Asian economies have announced increased spending on infrastructure projects to spur economic recovery
● Asia’s green recovery is led by South Korea’s Green New Deal and China’s additional investments in electric vehicles
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BUSINESS SWEDEN
Agenda
13
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
− Americas
− EMEA
− APAC
● Country reports
● How we can help
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BUSINESS SWEDEN 14
Americas region has mixed levels of restrictions, with most related to businesses
and industry being lifted, while travel and social interactions remain limited
Canada
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATIONS STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Open Partial Partial Yes Yes Partial Closed Open Open Reduced
N/A N/A N/A N/A N/A Sept N/A
USA Open Partial Yes No Partial Partial Partial Reduced Open Reduced
N/A N/A N/A N/A N/A N/A N/A
Mexico Open Open No No Partial Yes Closed Reduced Reduced Open
N/A N/A 15 August N/A N/A
Brazil Open Partial Yes No Yes Partial Closed Reduced Open Reduced
1 August 1 August N/A N/A 8 September N/A N/A
Chile Closed Closed Yes Yes Yes Yes Closed Closed Reduced Reduced
10 July N/A N/A N/A N/A N/A N/A N/A N/A N/A
Colombia Closed Closed Yes Yes Partial Partial Partial Reduced Reduced Open
15 July 1 September 1 September N/A 15 July 15 July 15 July 15 July 15 July 15 July
Restrictions per category and date of lift or next phase
Regional overview: Americas
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN
Agenda
15
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
− Americas
− EMEA
− APAC
● Country reports
● How we can help
#%$#%$#
BUSINESS SWEDEN 16
Northern and Central Europe have few restrictions related to travel and social
interactions, business activities are almost fully operational
Sweden
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATIONS STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Open Partial Partial No Partial Partial No Open Open Open
15 July 7 July N/A N/A
Denmark Open Partial Partial Partial Partial Partial Partial Open Open Open
TBD TBD TBD 8 July N/A August
Norway Open Partial Partial Partial Partial Partial Partial Open Open Open
15 July 15 July 15 July 1 September N/A August
Finland Open Partial Partial Partial Partial Partial No Open Open Open
N/A N/A N/A 1 October 31 July
UK Open Open No Partial Partial Partial Partial Open Open Open
N/A N/A N/A September
Netherlands Open Partial Partial Partial Partial Partial Partial Reduced Reduced Open
N/A N/A N/A N/A N/A N/A N/A N/A
France Open Partial Partial Partial Partial No Open Open Open Reduced
N/A N/A N/A N/A N/A
Restrictions per category and date of lift or next phase
Regional overview: EMEA
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN 17
Southern and Eastern Europe are mostly open or partially open, aside from
Russia that still has travel restrictions in place
Italy
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATIONS STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Open Partial Partial Partial Partial Partial Closed Open Open Open
N/A N/A N/A N/A N/A 14 September
Spain Open Open No No Partial Partial Partial Open Open Open
N/A N/A 1 September
Russia Open Closed Yes Yes Partial Partial Closed Open Open Reduced
August August N/A N/A N/A 1 September N/A
Czech
Republic
Open Partial Partial Partial Partial Partial Open Open Open Open
N/A N/A N/A N/A N/A
Austria Open Partial Partial Partial Partial Partial Open Open Open Open
15 Jun N/A N/A 30 August N/A
Germany Open Partial Partial Partial Partial Open Partial Open Open Open
31 Aug 31 Aug N/A N/A After summer
Poland Open Partial Partial Partial Yes Partial Partial Open Reduced Open
N/A N/A N/A N/A N/A N/A N/A
Restrictions per category and date of lift or next phase
Regional overview: EMEA
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN 18
Aside from Turkey, travel is restricted in Middle East & Africa, while most
business operations are almost fully back to normal
UAE
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATIONS STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Partial Partial Partial Yes Partial Partial Closed Reduced Open Reduced
N/A 7 July 7 July N/A N/A 6 July September N/A N/A
Saudi Arabia Open Partial Yes Yes Partial No Closed Reduced Reduced Reduced
N/A N/A N/A N/A N/A N/A N/A N/A
Kenya Partial Closed Yes Yes Yes Partial Closed Open Open Reduced
N/A N/A N/A N/A 7 July N/A 1 September N/A
Morocco Open Partial Yes Yes Partial Partial Closed Open Open Open
N/A N/A N/A 10 July 10 July 15 September
Turkey Open Open No No Partial Partial Partial Open Open Open
N/A N/A N/A
South Africa Partial Closed Yes Yes Partial No Partial Open Open Open
N/A N/A N/A N/A N/A N/A
Restrictions per category and date of lift or next phase
Regional overview: EMEA
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN
Agenda
19
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
− Americas
− EMEA
− APAC
● Country reports
● How we can help
#%$#%$#
BUSINESS SWEDEN 20
Societal functions and manufacturing have resumed in Asia and Australia, but
entry restrictions and mandatory quarantine are challenging for travelers
China
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATION STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Open Partial Yes Yes No No Open Open Open Reduced
N/A N/A N/A N/A
India Partial Partial Yes Yes Partial Partial Closed Reduced Open Open
31 July 31 July 31 July 31 July 31 July 31 July 31 July 31 July
Japan Open Partial Yes Yes Partial Partial Partial Open Open Open
N/A N/A N/A August N/A N/A
South Korea Open Partial Partial Yes Partial Partial Open Open Open Reduced
N/A N/A N/A N/A N/A N/A
Australia Partial Closed Yes Yes Partial Partial Partial Reduced Open Reduced
10-20 July 2021 2021 N/A N/A N/A N/A N/A N/A
Hong Kong Open Partial Partial Yes Partial No Partial Reduced Open Reduced
N/A N/A N/A 16 July N/A 13 July N/A
Taiwan Open Partial Partial Yes No No Open Open Open Reduced
N/A N/A N/A N/A
Restrictions per category and date of lift or next phase
Regional overview: APAC
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN 21
Thailand and Vietnam have mostly resumed and South East Asia is gradually
lifting restrictions, but some travel restrictions remain in place
Philippines
TRAVEL RESTRICTIONS RESTRICTIONS ON SOCIAL INTERACTIONS BUSINESS OPERATION STATUS
Domestic InternationalForeigner
entry ban
Mandatory
quarantine
Public
gathering
Work from
homeEducation
Retail
BusinessManufacturing Logistics
Reduced Reduced Yes Yes Partial Partial Closed Reduced Reduced Open
N/A N/A N/A N/A N/A N/A 24 Aug N/A N/A
Singapore Open Partial Partial Partial Partial Partial Partial Reduced Reduced Reduced
N/A N/A N/A N/A N/A N/A N/A N/A N/A
Malaysia Open Partial Partial Partial Partial No Partial Reduced Open Reduced
31 Aug 31 Aug 31 Aug 31 Aug N/A 31 Aug N/A
Indonesia Open Partial Partial Yes Partial Partial Closed Open Open Reduced
1 Sept N/A N/A N/A N/A Q1 2021 N/A
Thailand Open Closed Partial Yes Partial Partial Open Open Open Open
1 Aug 1 Sept N/A N/A N/A
Vietnam Open Closed Partial Yes No No Open Open Open Reduced
N/A N/A N/A N/A
Restrictions per category and date of lift or next phase
Regional overview: APAC
Lockdown state Very high High Medium Low Normal
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BUSINESS SWEDEN
Agenda
22
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
− Americas
− EMEA
− APAC
● How we can help
#%$#%$#
BUSINESS SWEDEN
The U.S. has seen a recent spike in COVID-19 cases causing a
delay in reopening phases in certain regions across the country
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 13.92 % of GDP
• The IRS deferred the federal tax-filling and tax-payment
deadline with states also deferring state taxes for 90 days
until July 15, 2020 without penalties or interest
• A one-time payment of 1,200 USD was sent out to individuals
making less than 75,000 USD per year or a household with income
less than 112,500 USD per year
• Federal funds rate were lowered by 150bp in March to 0-
0.25bp
23
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
States greatly vary on the level of openness with some states having
societal functions back to normal and others still observing lockdown
measures. A recent spike in COVID-19 cases has prompted states to
pause or roll back their phased opening plans. Work from home is still
encouraged for non-essential businesses, while most retail and
hospitality businesses operate with reduced capacity and must observe
social distancing and safety guidelines such as face coverings.
The road to
recovery
The government has been discussing a 2 tn USD infrastructure
proposal for traditional infrastructure work, such as roads and
bridges, but would also set aside funds for 5G wireless infrastructure
and rural broadband. There is also discussion around stimulating the
renewable energy sector. As the economy continues to weaken, the
government is considering a second stimulus package similar to the
C.A.R.E.S. Act that was originally passed in March 2020.
Source: IMF, Agility Logistics, U.S. White House, New York State Office of Governor, New York Empire State Development, Illinois Office of Governor, Illinois State Treasurer's Office, Illinois Department of Commerce, California Office of Governor, New York Times, US Department of the Treasury, US Small Business Association, US Bureau of Labor Statistics, San Francisco Chronicle, Associated Press, National Public Radio *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operation status
Domestic InternationalForeigner entry
ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Yes No Yes Partial Partial Reduced Open Reduced
N/A N/A N/A N/A N/A N/A N/A
Operating with low capacity
Limited flights Ban includes EU and Sweden
Recommended 14 day
Limited gathering #
Voluntary, capacity limits
Partially open with restrictions
Reduced capacity
Business as usual
Capacity reduced 30-40%
-6,1% -3,6% -6,2%
9,4% 9,2%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact
Ann-Sofie SafaTrade Commissioner [email protected]
Country reports: Americas
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BUSINESS SWEDEN
Steady decline in cases makes for good recovery in Canada as
most provinces are now in phase two of three of re-opening
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 9.80% of GDP
• Canada Revenue Agency has deferred tax-filling and tax-
payment deadline without penalties or incurring interest until
August 31st
• Government has issued interest free loans for up to 30,000
USD to small businesses
• Emergency Response Benefit program offers 1,500 USD/
month (up to 24 w) for Canadians unable to work due to COVID-19
• Federal funds rate lowered by 150bp in March to 0-0.25bp
24
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Ontario has, alongside most Canadian provinces, entered phase two
(of three) of re-opening of the economy. Within this phase businesses
deemed non-essential can resume operations and non-essential
workers are allowed back to work. The government still
encourages people to work from home if possible, while most retail
and hospitality businesses operate with reduced capacity and must
follow strict social distancing and safety guidelines.
The road to
recovery
The lion’s share of federal budgetary measures so far have been aimed
at supporting household income. The government has now committed
to a 2 bn USD infrastructure funding program for Canadian cities. The
government has also set up a 40 bn USD initiative called The Federal
Canada Emergency Wage Subsidy program. The program will
help businesses deal with the high costs of running a business while
COVID-19 is still a threat.
Source: Business Sweden analysis, Agility Logistics, conference board of Canada, Toronto star, Ontario.ca, globe and mail, Canada.ca, IMF, BDC *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Yes Yes Partial Closed Open Open Reduced
N/A N/A N/A N/A N/A N/A N/A
Reduced flights and capacity
Limited flights Closed to non-essential visitors
14 days No gatherings over 10 people
Encouraged if possible
Estimated to resume in Sept
Reduced capacity
Business as usual
Capacity reduced 30-40%
-9,1% -2,4% -7,0%
52,2%
-2,2%GDP 2020 Global
ExportsGlobal
ImportsExports to
SwedenImports
fromSweden
Contact:
Christina KeighrenTrade Commissioner [email protected]
Country reports: Americas
#%$#%$#
BUSINESS SWEDEN
Business is partially reopened in major Brazilian cities, but the
recovery to pre-pandemic sales levels is expected to be slow
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 11.00% of GDP
• Tax deferral for SMEs liabilities, bank loans and taxes applicable to
medical and emergency related products
• Corporate credit package of 60 bn USD from public banks with
focus on working capital, plus advantageous credit lines for SMEs
• 40 bn USD in deposits to low income population and temporary
workers, in 120 USD monthly installments during the next months
• New infrastructure investments program worth 56 bn USD,
focused on public-private partnerships, details to be announced
25
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Large urban centers, such as Sao Paulo and Rio de Janeiro, seem to
have reached a plateau of COVID-19 transmission, and have therefore
started to partially reopen non-essential activities such as commerce.
Meanwhile cities in the countryside, as well as initially less affected
capitals, see a new rise of transmission. Most industries are operating
once again but with decreased capacity due to a weaker domestic
demand.
The road to
recovery
Announced corporate credit and employment stimuli will be central to
protect small companies and entrepreneurs. Business has moved
towards digitalization, as food service and retail face a quick dive into
digital channels. Public debt constraints and a sluggish economic
growth during recent years point to limited governmental spending to
support economic recovery, and so investments will be led by the
private sector through the privatization of public infrastructure assets.
Source: Business Sweden analysis, OECD, IMF, Agility, IATA, Brazil Ministry of Economy, Brazil Ministry of Health, Sao Paulo State Gov, Folha, Jornal Estado SP, Valor *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Yes No Yes Partial Closed Reduced Open Reduced
1 August 1 August N/A N/A 8 September N/A N/A
Operating with low capacity
Only for repatriation
Closed to foreigners
Quarantine is recommended
Restricted in most regions
Voluntary adoption
Public and private closed
Restricted in most regions
Operating with low capacity
Reduced air cargo traffic
-7,5% -5,4%
3,9%
-57,9%
20,0%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Andreas RentnerTrade Commissioner [email protected]
Country reports: Americas
#%$#%$#
BUSINESS SWEDEN
Agenda
26
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
− Americas
− EMEA
− APAC
● How we can help
#%$#%$#
BUSINESS SWEDEN
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 16% of GDP
• Tax deferral program, reduced employer fees and job
retention schemes implemented for affected companies
• 4 bn USD support package to businesses that have lost more than
30% of sales
• Credit packages of $50 billion, including a 70% state loan
guarantee and an increased loan limit for exporting companies
27
A soft lockdown has kept the Swedish economy going, economic
recovery is heavily dependent on the international market outlook
-4,5%-2,9%
-9,2%
GDP 2020 Global Exports Global Imports
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Economic activity in the manufacturing industry hit record low levels
in May, but large companies such as Scania and Volvo are now
gradually restarting their production. Unemployment rates have
reached 9%, up 2 percentage points from the same time last year. The
pandemic has affected sectors differently with the tourist sector
suffering the most due to the decline in international visitors, while
the retail sector experienced an increase by 1.5% in May compared to
last year, mainly driven by consumer goods and DIY.
The road to
recovery
Sweden’s open economy is dependent on international trade and
investment and the country’s economic recovery relies in part on how
the situation develops for its main trading partners, and less on
domestic recovery measures. Lower degree of lockdown combined
with high digital maturity contribute to companies being able to stay
operational during the pandemic and consequently in a position to
react swiftly as restrictions are lifted globally. Major infrastructure
projects in Sweden’s national transport plan are in general
implemented as planned.
Source: Business Sweden analysis, National Institute of Economic Research, regeringen.se *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial No Partial Partial No Open Open Open
15 July 7 July N/A N/A
Operating as usual
Avoid non-essential travel
Entry ban outside EU/EEA
No mandatory quarantine
>50 people Encouraged if possible
All schools open from June
Business as usual
Business as usual
Business as usual
Contact:
Cecilia LeiramInvest Manager [email protected]
Country reports: EMEA
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BUSINESS SWEDEN
Germany is emerging from the crisis by boosting the economy into
modernization and sustainability
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 17.71 % of GDP
• 56 bn USD of stimulus package to areas that are crucial for
future growth and sustainability e.g. sustainable mobility,
energy transition, AI, pandemic protection, education & research
• Aid package 2.25 bn USD for start-ups, young technology
companies and small and medium-sized enterprises
• One-time bonus for families with children of 337 USD per child
• Temporary VAT reduction from 19% to 16% between July 1st to
December 31st, 2020
28
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Source: Federal Statistical Office, Robert Koch Institut, The Federal Government, Federal Ministry of Finance *Note: GDP projections updated June 2020, further downward revisions are expected ** Persons entering the Federal Republic of Germany, who have spent time in a risk area at any specific period within 14 days prior to entry, may be subject to quarantine under the specific quarantine ordinances issued by the federal state More info: click here *** Differences between regions overall Germany no more than 500 people
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Partial Partial No Partial Open Open Open
31 Aug 31 Aug N/A N/A Aug/Sep
Operating as usual
Borders to non EU closed
Open to EU citizens
Exceptions apply**
Regional differences ***
Recommended, not required
Open after summer break
Capacity limit & mask required
Social distance; hygienic rules
Social distance; hygienic rules
-6,1% -5,9% -5,9% -1,9%
0,6%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:Johan HolmlundActing Country [email protected]
Current
State
Societal functions are reopening and gradually nearing completion
with only large events prohibited. Production is catching up but still
negatively impacted due to lower global demand. In May 2020,
around 17% of all employees in Germany (7.3 million) were registered
on short-time work and the unemployment rate increased from 4.9%
(December 2019) to 6.1% (May 2020).
The road to
recovery
The government aims to give the economy a powerful boost to
safeguard jobs and to bring Germany into an environmentally
sustainable future. Due to the outbreak and the restrictions Germany
has been forced to modernize and digitalize its working processes.
Swedish companies can find opportunities in the development of
green projects and a more digital landscape. A government launched
COVID-19-Warn-App governs contacts with infected persons and
helps interrupt chains of infections more quickly.
Country reports: EMEA
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BUSINESS SWEDEN
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 5 % of GDP
• Coronavirus Job Retention Scheme and Self-employed
Scheme are implemented and extended until October
• Large Business Interruption Loans and Bounce Back Loans
provide financial support to large sized businesses and SMEs
• Tax relief including deferral of certain VAT and income tax
payments for businesses affected by COVID-19
• Business rates holiday for nurseries, retail, and leisure businesses
29
The UK enters step three of easing the lockdown, and economists
say Britain’s economy is on track for a sharp V-shaped recovery
-8,3% -12,4% -17,4% -11,4%-7,0%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
The UK economy has started to recover with looser restrictions and a
sector by sector approach that – from July 4th, phase three – enable
the majority of industries to return. The UK lags behind its European
neighbors in reopening society, despite this the PMI decline is slowing
down across all industries as a sign of the impact of looser restrictions.
Bank of England estimates that the economy could end the first half of
2020 around 20% smaller compared to the start of the year.
The road to
recovery
The UK government has set out a recovery plan focusing on the
industry, a green recovery, backing new businesses, and attracting
investments. The hope is that a building boom will drive an economic
recovery and the plan is to invest 6.15 bn USD in infrastructure
projects in road networks, improvements to transport, building of
schools and maintenance – this could bring opportunities for Swedish
companies. However, the UK faces another economic challenge at the
end of this year when the Brexit transition period ends.
Source: Business Sweden analysis, Bank of England, UK Government; HM Revenue & Customs *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Open Open Partial Partial Partial Partial Open Open Open
N/A N/A N/A September
Operating as usual
Operating as usual
Operating as usual
14 days at specified facility
Restrictions apply
If you can, work from home
All pupils back to school in Sept
Business as usual
Business as usual
Business as usual
Contact:
Gustaf BergströmTrade Commissioner [email protected]
Country reports: EMEA
#%$#%$#
BUSINESS SWEDEN
Current
State
Societal functions have reopened, yet a significant part of the
workforce is still working from home which leads to some inefficiency
and delays in external communication. Production is still at lower
levels than usual but recovering. The retail sector is picking up but still
experiences a lower household demand. Culture, sports and other
events are still strongly impacted, due to the ban on big gatherings, set
to remain at least until September.
The road to
recovery
The government promotes returning to the workplace and to reaching
normal levels of activity in the retail and the manufacturing sector.
The industrial sector is planning for reshoring of production from
overseas (mostly Asia) back to France. In its recovery packages, the
government focuses on green recovery and digital development.
Swedish companies can find opportunities in the ongoing
reindustrialization (e.g. reorganization of supply chains) as well as in
the increased focus on sustainability and digitalization.
France invests in green and digital transformation of the industrial
sector to support the economic recovery
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 9.30 % of GDP
• 366 bn USD of State-guaranteed treasury loans
• Solidarity fund for small companies
• Postponement of direct taxes as well as social and fiscal
charges from March to June for companies risking bankruptcy
• Reduction of price of utilities for small companies
• Up to 11,ooo USD in direct aid to companies in hard hit
sectors
30
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Source: Business Sweden analysis; IMF Global Economic Outlook April 2020; OECD; French Ministry of Economic and financial affairs; French Ministry of Foreign affairs *Note: GDP projections updated June 2020, further downward revisions are expected **Australia, Canada, South Korea, Japan, New Zealand, Rwanda, Thailand, Uruguay, Morocco, Algeria, Tunisia, Montenegro, Serbia and Georgia
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Partial Partial No Open Open Open Reduced
N/A N/A N/A N/A N/A
Operating as usual
Partially open to non-EU
EU; 14 non-EU countries**
For travelers from UK
Max. 5,000 people
Business as usual
Schools open and mandatory
Social distance; hygienic rules
Social distance; hygienic rules
Some delays and shortages
Contact:
Annika StålTrade Commissioner [email protected]
-9,9% -10,2% -10,7% -8,3%
0,8%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Country reports: EMEA
#%$#%$#
BUSINESS SWEDEN
Spain is determined to rise through sustainable transformation and
investments while increasing resiliency in most critical sectors
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 7.30 % of GDP
• Credit guarantee programs of total 110 bn USD to companies
and self-employed - granted until December 31st
• 11.2 bn USD increase in the net borrowing limit of the ICO
(Spanish equivalent of the EIB) to increase existing lines of credit
• Temporary layoff (ERTE) benefits and support for independent
contractors extended until September 30th
• Industry specific subsidies - 4.8 bn USD to the tourist sector and
3.8 bn USD to the automotive
31
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Source: Business Sweden analysis, El País, Spanish Government, El Expansion, Energy News, Comunidad de Madrid, Ajuntament de Barcelona *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Open No No Partial Partial Partial Reduced Open Open
N/A N/A 1 September N/A
Operating as usual
Ticket availability can be limited
No restrictions No quarantine is required
Regional differences
Highly recommended
Schools mainly open from Sept
Capacity limit & hygiene rules
Hygiene rules apply
Delays may occur
-9,8% -6,0% -7,4%
15,5%
-9,5%GDP 2020 Global
ExportsGlobal
ImportsExports to
SwedenImports
fromSweden
Contact:
Samira Grylin-AllalouTrade Commissioner [email protected]
Current
State
Societal functions have re-opened but still running on limited capacity
due to restrictions. Restrictions will apply for as long as the country is
in what is called the “new normal”. Local consumer demand remains
weak with five-fold savings increase and hesitations to make
purchases. Unemployment rate is currently at 14.1% and could rise to
above 19% by the end of 2020 according to the Bank of Spain. Tourism
and automotive sectors ability to bounce back will greatly impact
national recovery as the two make up 22% of national GDP.
The road to
recovery
The government has introduced several measures to support
businesses including liquidity loans and temporary layoff benefits.
Meanwhile, following a new law on climate and enhancement for a
circular economy, Spain is determined to restore the economy through
sustainability. Further, 168 bn USD has been earmarked for public
investment in 2021-22 if Spain is to receive its portion of the EU
recovery fund. Opportunities will rise for Swedish companies across
sectors in order for Spain to meet the climate goals.
Country reports: EMEA
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BUSINESS SWEDEN
Italy acknowledges need for reforms towards digital and green, as
new recovery plan is being formulated
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Three response packages with a total budget impact of 85 bn
USD. Total fiscal measures amount to 8.90 % of GDP
• 1.9 bn USD Fund to provide fee-free guarantee for SMEs loans
• State guarantee for up to 11 bn USD in new loans for medium-
large firms
• Exemption from the payment of the Regional production
tax (IRAP) for companies with revenues <280 mn USD
• 680 mn USD for 60% tax credit on commercial rents
32
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Source: Business Sweden analysis, OECD, Confindustria, IMF, Italian Government, Ministry of Economic Development *Note: GDP projections updated June 2020, further downward revisions are expected **Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, South Korea, Thailand, Tunisia, Uruguay, China ***Regional differences my occur
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Partial Partial Partial Closed Open Open Open
N/A N/A N/A N/A N/A 14 September
Operating as usual
Partially open to non-EU
EU; 15 non-EU countries **
14 days for non EU citizens
1,000 outdoors, 200 indoors ***
Recommended, not required
Schools reopen in Sept
Capacity limit, hygienic rules
Social distance, hygienic rules
Potential delays
-9,3%-5,3%
-8,7%-4,2%
-8,0%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Martin SkooghTrade Commissioner [email protected]
Current
State
Societal functions have reopened. Industry and parts of the service
sector restarted quite quickly since restrictions were gradually lifted in
late April. However, Italy is experiencing a slow recovery due to low
economic confidence impacting consumption and investments, as well
as a weak demand for exports and tourism. Domestic demand remains
low and private consumption is expected to drop 10,5% in 2020.
Tourism sector risks to remain weak in the medium term and impact
recovery as it makes up 13% of GDP.
The road to
recovery
The government has introduced several measures to support
businesses and boost liquidity by guaranteeing loans, deferring tax
payments and tax credits. The government is currently working on a 9
chapter "Relaunch Plan“ with reforms focusing on; digitization,
infrastructure investments, green economy, industry 4.0,
modernization of the tourism industry and investments in research
and health. Swedish companies can find opportunities in this
transition and in upcoming infrastructure and digitalization projects.
Country reports: EMEA
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BUSINESS SWEDEN
UAE pushing to open for international tourism to alleviate crucial
Dubai tourism sector, Abu Dhabi heavily impacted by low oil prices
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 2 % of GDP
• Equivalent of 70 bn USD released by Central
Bank through zero interest loans directed towards private
companies
• Separate recovery packages from Dubai (408 mn USD) and Abu
Dhabi (2.5 bn USD)
• Extended deadline for filing and paying VAT returns
33
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
The country is re-opened with most businesses back to operation, but
some domestic travel restrictions remain in place. Hospitality and
tourism sectors are hit hardest due to almost no influx of tourists.
Decreased oil prices have strained revenues and thereby budgets in
Abu Dhabi. Project cancellations and/or postponements expected,
albeit improved outlook in recent weeks. Important to note that
restrictions and lockdown measures vary between Emirates, as they
act largely independently.
The road to
recovery
Severe drop in demand in key sectors brings a weakened market
outlook. As the market re-adjusts to a new normal, a significantly
increased demand for digital solutions brings opportunities for
Swedish companies. Increased focus on the healthcare system also
generates opportunities for Swedish solution providers. In the long-
term, decreased oil revenues could speed up implementation of
sustainable energy solutions. As an effect of global supply chain
shocks, food security is becoming a key priority, an area where Sweden
has several relevant solutions.
Source: Business Sweden analysis, IMF, WHO, Financial Times, Reuters, Gulf News, Khaleej Times, DP World, UAE Central Bank, Arab Weekly, Bloomberg, Oxford Economics, EMIR, IMF, Agility *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Partial Partial Partial Yes Partial Partial Closed Reduced Open Reduced
N/A 7 July 7 July N/A N/A 5 July September N/A N/A
Open as of 30 June
Residents can return
Tourists from 7 July
14 days if positive test
No private gatherings
Public sector in Abu Dhabi
Schools open from September
Operating with limitations
Business as usual
Reduced freight capacity
-7,8% -1,3% 0,0%
4,1% 92,8%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Massoud BioukiTrade Commissioner [email protected]
Country reports: EMEA
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BUSINESS SWEDEN
Saudi Arabia's state finances crippled by drop in oil revenues,
government increased VAT to 15% in a drastic countermeasure
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 3.40 % of GDP
• Equivalent of 58.3 bn USD of credit and loan packages,
primarily for SMEs to continue operations and alleviate liquidity
• Government to pay 60% of the salaries for Saudi nationals
in the private sector
• Increased VAT from 5% to 15% as well as increased custom tariffs
for certain products
• All government agencies to cut budgets by minimum 20%
• Mega projects will receive reduced budgets around 8 bn USD
34
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Nationwide lockdown was lifted June 21st and business activities are
starting up. Shops and malls operate with limited capacity. Decrease
in oil price will result in postponed and/or cancelled investments, such
as the country's much awaited mega projects. Since a majority of the
economy is driven by the government, the double effect of reduced oil
revenues and reduced demand due to the COVID-19 pandemic have
had extensive effects on governmental budgets.
The road to
recovery
The increase of VAT and custom tariffs will pose challenges for
Swedish companies and it is important to take into account when
setting the roadmap to recovery. Efforts to lessen oil dependence
might be ramped up as a result of the low oil price. Swedish companies
should position themselves as partners in this transformation.
Increased demand for digital tools and services also bring
opportunities for Swedish companies post COVID-19 pandemic.
Source: Business Sweden analysis, WHO, Financial Times, Reuters, Gulf News, Khaleej Times, DP World, UAE Central Bank, Arab Weekly, Bloomberg, Oxford Economics, EMIR, IMF, Agility *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Yes Yes Partial No Closed Reduced Reduced Reduced
N/A N/A N/A N/A N/A N/A N/A N/A
Operating as usual
Only for repatriation
Date to be confirmed
14 days at home Max. 5 people Not required E-learning from home
Operating with limitations
Operating with limitations
Lack of manpower
-7,5%-19,9%
-5,8% -0,9%
37,0%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Niclas CarlssonTrade Commissioner [email protected]
Country reports: EMEA
#%$#%$#
BUSINESS SWEDEN
South Africa has employed a phased approach to reopening the
economy with focus on “essential industries”
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 8.03 % of GDP
• 4 bn USD tax relief that includes deferral of tax payments on
excise duties, carbon tax, and employee's tax.
• Credit packages of 28 bn USD including rescheduling of
repayment and lower interest on existing debts.
• Repo rate lowered by 50 basis points, taking it to 3.75% per
annum, with effect from May 22nd.
35
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Societal functions are almost back to normal with the government
employing a phased reopening of the economy. Currency volatility
remains a main worry as the South African Rand has depreciated by
22.9% against the USD since January 2020. Local production has
started to increase as the lockdown measures are lifted and employees
are permitted to work but under strict regulations.
The road to
recovery
The South African government has been trying to stimulate local
demand by increasing social spending and promoting domestic
consumption, among other stimulus. Focus has been on upgrading
and refurbishing the country’s health sector in addition to relief efforts
targeting distressed companies that have been negatively affected by
the lockdown.
Source: Business Sweden analysis, STATSSA, SARS, South African Reserve Bank *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Partial Closed Yes Yes Partial No Partial Open Open Open
N/A N/A N/A N/A N/A N/A
Restricted to Business travel
Only for repatriation
Per bilateral agreements
14 days at specified fac.
Not more than 50 individuals
Encouraged where possible
Only for essential grades
Business as usual
Business as usual
Business as usual
Contact:
Ludvig HermanssonTrade Commissioner [email protected]
-9,1%
2,9%
-9,4%-20,4% -20,7%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Country reports: EMEA
#%$#%$#
BUSINESS SWEDEN
Agenda
36
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
− Americas
− EMEA
− APAC
● How we can help
#%$#%$#
BUSINESS SWEDEN
China is investing in infrastructure critical for future industries,
but the biggest pain point remains to be reduced external demand
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 4.10 % of GDP
• More than 1.4 tn USD in new infrastructure projects related to
5G and Industrial Revolution 4.0
• 559 bn USD in cost cuts in the form of tax exemptions and lower
interest rates for companies
• Import duty exemptions for medical supplies and for equipment
that has been used to battle the pandemic
• Military spending is set to increase by 6.6% in next budget
37
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Societal functions are back to normal, and businesses can operate
more or less freely, but the lack of global demand remains an issue,
along with changing consumer habits hitting industries like F&B,
tourism, and events. Domestic travel is more or less unrestricted as
long as the traveler has health status QR code, but travel is still
reduced due to fear of new lockdowns or a second wave of the virus.
The road to
recovery
The government has launched strategic support policies in terms of
speeding up the roll-out of 5G and other key industries that will
reduce costs for SMEs and become a competitive advantage for China
in the future. In order to deal with unemployment China has lifted
restrictions on street vendors in some locations to spur the economy
and create alternative income sources.
Source: Chinese State Council, MOFCOM, China Daily, Trivium *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Yes Yes No No Open Open Open Reduced
N/A Est. Q3-Q4 N/A N/A
Operating as usual
Only for repatriation
Bilateral agreements
14 days at specified fac.
Business as usual
Not required Schools are open
Business as usual
Business as usual
Reduced capacity
0,8%
-11,1% -4,1% -14,5%
29,2%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Joakim Abeleen Market Area [email protected]
Country reports: APAC
#%$#%$#
BUSINESS SWEDEN
India is on the road to recovery with government stimulus and
business operations inching towards pre-COVID-19 performance
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 3.80 % of GDP
• Reduced and deferred tax provisions for both corporates and
individuals
• Liquidity injections to the magnitude of 4% of GDP
• Reduction in repo rate by 115 basis points
• 39 bn USD collateral free loan with 100% credit guarantee
• Exemption from customs duty and taxes for ventilators, face
masks and surgical masks, PPE, COVID-19 testing kits
31 July
38
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Business operations are gradually coming back to normal with aim to
achieve pre-COVID-19-level performance. The market is seeing a
weaker demand although significant government indicators such as
electricity usage and digital transactions, etc. indicate a strong
recovering economy. India's economy is projected to contract by 5.7%
in 2020 as the global economy contracts by 4.6%.
The road to
recovery
The government is stimulating demand by increasing spending on
infrastructure, encouraging domestic manufacturing, rolling out policy
reforms and offering tax exemptions. Swedish companies can leverage
opportunities in manufacturing, infrastructure, healthcare,
space technology and rapidly growing Digital/ICT industry.
Source: 1. Government of India - Ministry of Home Affairs guidelines, 2. IMF, 3. News Articles- Economic Times *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Partial Partial Closed Yes Partial Partial Closed Reduced Open Open
31 July 31 July 31 July 31 July 31 July 31 July 31 July 31 July
Limited trains and flights
Repatriation only
Rules apply 14 days at specified fac.
Depending on occasion
WFH recommended
Until further notice
Business as usual
Business as usual
Business as usual
-5,7%-11,5% -9,2%
0,5%
-24,6%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Anders WickbergTrade [email protected]
Country reports: APAC
#%$#%$#
BUSINESS SWEDEN
Japan aims to recover from industrial downturn with a large
stimulus package corresponding to more than 40% of GDP
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 42.20 % of GDP
• Tax deferral program implemented applicable to both affected
entities and individuals
• Extended loan guarantees are offered through the Japan Federation
of Credit Guarantee Corporation (JFG)
• Customs duty and VAT are exempted if the goods are proven to
be donated free of charge. Prioritized or urgent customs clearance
for relief goods related to COVID-19
39
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Societal functions are back to normal. However, production is
negatively impacted due to lower global demand. The important
automotive sector is negatively affected. In May, auto production fell
by a third from the previous month. As the economy tries to recover
from the recession as well as due to the impact during the emergency
status, the latest business sentiment among Japan's large
manufacturers has plunged to the lowest level in more than a decade.
The road to
recovery
With the second supplementary budget plan, the government aims to
strengthen the medical system, protect employment and provide
support to those affected. Swedish companies can take advantage of
this momentum where society tries to transform to more digital, safe
and innovative methods in the areas of self-efficiency in
manufacturing as well as food production, life science, and ICT.
Source: Business Sweden analysis, METI, Japan Customs, Nikkei, Japan Times *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Yes Yes Partial Partial Partial Open Open Open
N/A N/A N/A August N/A N/A
Travel is allowed
Only open for Vietnam
Only citizens allowed entry
14 days at home or hotel
TBD TBD Disrupted schedules
Business as usual
Business as usual
Business as usual
-6,5% -5,6% -8,4% -26,8%
17,6%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Carsten GrönbladTrade [email protected]
Country reports: APAC
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BUSINESS SWEDEN
Effects on Korea's trade dependent economy continue to ease as
key trading partners are lifting restrictions and stimulus kicks in
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 3.80 % of GDP
• Tax deferral program implemented (e.g. VAT, Income and
Corporate Tax) applicable to both affected entities and individuals
• Credit packages as a part of financial stabilization
package including rescheduling of repayment and emergency
lending mainly for SMEs
• Import duty exemptions for medical supplies and equipment and
preferential import and export tariffs for several industries
40
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Most societal functions operate unrestrained. However, industry
production is negatively impacted due to lower global demand. The
public discourse favors a reduced external reliance and
encourages reshoring and diversification of Korean production
bases. While offline consumer businesses, especially those
involving interpersonal contact, are experiencing waning demand,
firms are diversifying distribution and bolstering digitalization.
The road to
recovery
The government has launched several comprehensive financial
stimulus packages to boost local demand by promoting domestic
consumption and supporting several industries. The government
recently introduced a "Korean New Deal" investment project (62 bn
USD) in AI, 5G, and Green energy to boost growth and job. Swedish
companies can take advantage of those projects within digital and
zero-carbon infrastructure and related incentives.
Source: IATA; MOTIE; KITA; IMF; Agility; PwC Samil; Korea Herald *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Yes No Partial Open Open Open Reduced
N/A N/A N/A N/A N/A
Operating as usual
Constrained Per bilateral agreements
14 days at specified facility
Contingency plan in effect
Government recommends
Schools open since June
Business as usual
Business as usual
Due to low exports
-0,7% -1,9% -3,4%-24,1%
-2,4%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Johan ChunTrade Commissioner [email protected]
Country reports: APAC
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BUSINESS SWEDEN
Singapore will accelerate digitalization as technology becomes
increasingly vital in businesses to resume normal activities
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 19.70 % of GDP
• Tax deferral program up to 3 months implemented (CIT)
applicable to all businesses
• Central bank interest rate reduced from 0.83% to 0.37%
• Rental relief for SMEs operating in qualifying non-residential
properties.
• Support for corporate transformation with Enterprise
Development Grant: for companies with projects that upgrade the
business, innovate or venture overseas
41
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
While businesses and societal functions opened up, businesses are still
relatively cautious about the demand recovery and the ongoing supply
chain disruptions.
Retail sales plunged 40.5% y-o-y in April as all non-essential shopping
(that cannot be bought in supermarkets) had to be done online.
The road to
recovery
Further down the road, the economy will undergo structural changes
that will disrupt industries and cause job losses.
Singapore will continue to deploy resources to support businesses and
invest in their workforce to go through the economic restructuring.
Singapore will spend an estimated 2.5 bn USD on the procurement of
information and communications technology (ICT) this financial year
to boost the economy and support businesses recovering from the
COVID-19 outbreak.
Source: Business Sweden analysis, Monetary Authority of Singapore, IMF *Note: GDP projections updated June 2020, further downward revisions are expected
Contact:
Emil AkanderTrade Commissioner [email protected]
-5,8%
14,0%8,5%
-1,0% -3,7%GDP 2020 Global
ExportsGlobal
ImportsExports to
SwedenImports
fromSweden
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Open Partial Partial Partial Reduced Partial Partial Reduced Reduced Reduced
N/A N/A N/A N/A N/A N/A N/A N/A N/A
Business as usual
Exceptions apply
Subject to approval
Exceptions apply
Up to 5 persons Exceptions apply
Home/school teaching
Limited capacity
Limited capacity
Country reports: APAC
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BUSINESS SWEDEN
Australia is using construction and infrastructure as catalysts for
recovery combined with a low emission technology roadmap
GDP forecast
(full year 2020)* &
Trade development
(Q1 2019/2020, %)
Key components in
recovery package
• Total fiscal measures amount to 11.71 % of GDP,~180 bn
USD in fiscal and balance sheet support
• Businesses can benefit from instant asset write-off and
investment incentives (with accelerated depreciation)
• A specific ~475 mn USD grant package to support the construction
industry. Other sector specific stimulus are also available (e.g.
0.7 bn USD for most severely affected sectors)
• Commission to increase Australian long-term manufacturing
competitiveness and large campaign to consume Australian made
42
RECOVERY OVERVIEW
LOCKDOWN MEASURES AND CURRENT STATUS
EFFECTS ON BUSINESS OPERATIONS
Current
State
Australia is following a three phased approach for relaxation of the
COVID-19 restrictions. Victoria is currently facing an increase in cases
and has the strictest restrictions with less than 10 people while e.g.
Western Australia has no limit on public gatherings beyond the 2 sqm
rule. Two thirds of businesses have reported reduced revenues
compared to same period 2019 (35% have reported more than 50%
reduction in revenue), mining sector least impacted.
The road
to recovery
The government has introduced a JobKeeper program to keep
Australians in jobs. In addition, multiple stimulus packages have been
launched such as construction grants, ramping up infrastructure
investments and the launch of the Technology Investment Roadmap
aiming at accelerating low emission technologies. As Swedish
companies have strong value propositions within the above mentioned
areas there is a window of opportunity to engage within the coming
months and years.
Source: Business Sweden analysis; Australian Government Treasury, ABC News Australia, Australian Bureau of Statistics COVID19 *Note: GDP projections updated June 2020, further downward revisions are expected
Travel restrictions Restrictions on social interactions Business operations status
Domestic InternationalForeigner
entry ban
Mandatory
quarantinePublic gathering Work from home Education Retail Business Manufacturing Logistics
Reduced Reduced Yes Yes Reduced Reduced Reduced Reduced Open Reduced
10 –20 July N/A 2021 N/A N/A N/A N/A N/A N/A
State restrictions to be eased
Only for repatriation
No official date announced
14 days in hotel Differs across geographies
Encouraged Elementary schools open
1 p /2-4 sqm with variations
Social distancing Social distancing
-5,0% -6,4% -10,7% -43,8%
44,6%
GDP 2020 GlobalExports
GlobalImports
Exports toSweden
Importsfrom
Sweden
Contact:
Martin EkbergTrade Commissioner [email protected]
Country reports: APAC
#%$#%$#
BUSINESS SWEDEN
Agenda
43
● Executive summary
● Monthly feature
● Current global situation
● Regional overview
● Country reports
● How we can help
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BUSINESS SWEDEN
Business Sweden is an international organization with a global footprint – we
stand ready to support you in over 50 markets
44
45
More than 45 years’ experience in helping Swedish businesses succeed abroad.
500
Our staff force of ~500 people across the globe consists of multinational teams rooted in local business culture.
50+
Business Sweden is a truly global company, operating in more than 50+ markets across the world
Business Sweden’s global footprint Our presence and experience
Business Sweden helps Swedish companies grow global sales and international companies invest and expand in SwedenMarkets covered by
nearby offices
Markets with local
Business Sweden office
Understand situationWhen and where lockdown measures are lifted or enter
the next phase
Navigate new barriersWhich have emerged as part of
disruptions or increased protectionism
Plan & prepareYour local recovery plan
based on market situation and conditions
Find new opportunitiesFor sales growth or increased competitiveness by leveraging
local recovery packages
Our presence and experience allow us to:
45
Global Executive Brief