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German economic institutes slash 2024 GDP forecast to 0.1%

Leading German economic institutes said on Wednesday that they expect the country’s economy to grow by 0.1% in 2024, slashing their prior forecast of 1.3% as high interest rates, weak global demand and political uncertainty dent hopes for a stronger recovery. The institutes now forecast gross domestic product (GDP) to increase by 1.4% in 2025, revised from 1.5% previously. “Although a recovery is likely to set in from the spring, the overall momentum will not be too strong,” said Stefan Kooths, head of economic research at the Kiel Institute for ...

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Indian economy keeps its shine, with some red flags

India maintained its top position among major emerging market (EM) economies in the February edition of Mint’s monthly EM tracker, buoyed by robust domestic growth and a sharp rebound in exports. The rupee’s performance against the US dollar, while modest, outshone that of its peers, as did the achievements of the domestic stock market, enhancing India’s overall score. This solid standing, especially at a time when recession bells are ringing in Europe, is particularly advantageous for the Narendra Modi government as it approaches the Lok Sabha elections. However, the recent ...

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China hopes Australia respects WTO ruling, removes tariff measures

China’s Commerce Ministry called on Australia to respect a World Trade Organization (WTO) ruling and rectify ‘violations’ by removing disputed tariff measures, after a WTO panel partially upheld China’s anti-dumping complaint against Australia. The trade dispute involves a Chinese complaint nearly three years ago over Australia’s anti-dumping and anti-subsidy measures on products including railway wheels, wind towers and stainless steel sinks. The ministry on Wednesday said China appreciates the WTO’s ruling on the trade dispute between it and Australia, calling it objective, fair and unambiguous. Source: Reuters (Reporting by Liz ...

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Visa, Mastercard reach $30 billion settlement over credit card fees

Visa and Mastercard (NYSE:MA) reached an estimated $30 billion settlement to limit credit and debit card fees for merchants, with some savings likely to be passed on to consumers through lower prices. The antitrust settlement announced on Tuesday is one of the largest in U.S. history, and if it receives court approval would resolve most claims in nationwide litigation that began in 2005. Some critics believe it may not go far enough, saying the savings would be temporary and fees would remain high. Merchants have long accused Visa (NYSE:V) and ...

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UK businesses trim hiring and pay plans, Lloyds says

British businesses trimmed their plans for staffing and wage increases this month, according to a survey published on Wednesday that suggested April’s big increase in the minimum wage is weighing on employers. With the Bank of England watching for signs that inflation pressures are abating enough for it to cut interest rates, the Lloyds Bank Business Barometer’s measure of staffing plans – or the gap between firms planning to hire and those planning cuts – fell to 27% from February’s almost two-year high of 36%. The series’ long-term average is ...

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Baltimore bridge collapse poses little threat to U.S. economic growth, experts say

The collapse of Baltimore’s Francis Scott Key Bridge was a maritime disaster but not an economic crisis, experts said Tuesday. “It’s a real human tragedy what’s happened, because there are people in the water,” RSM Chief Economist Joseph Brusuelas said. “In terms of economics, it will cause barely a ripple in the national macro economy.” The Singapore-flagged DALI container ship collided with a pillar of the bridge in the early hours Tuesday, causing it to immediately collapse. An all-hands rescue effort was underway late Tuesday. President Joe Biden said he ...

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Sentiment is slowly improving for the eurozone economy

Just as the mood couldn’t get more downbeat about European competitiveness, the economy is starting to show more green shoots in terms of economic activity. Of course, structural and cyclical factors are very different, but the current mood may be overstating Europe’s economic misery a bit. After a long period of economic stagnation following the energy crisis, the eurozone economy is expected to see growth pick up over the coming quarters. The economic sentiment indicator for the eurozone increased modestly from 95.5 to 96.3. Small improvements in sentiment were broad-based ...

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Euro zone wage data support rate cut case, says ECB’s Cipollone

The European Central Bank is increasingly confident that inflation will fall back to its 2% target by mid-2025 as wage growth moderates, strengthening the case for lower interest rates, ECB board member Piero Cipollone said on Wednesday. The ECB has flagged a possible rate cut for June depending on further good news on wages and the commentsfrom Cipollone, in his first majorpolicy address since joining the board, suggest the process was heading in the right direction. “Wage growth appears on track to gradually moderate in the medium term towards levels ...

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US consumer watchdog to examine credit card rewards, ‘buy-now, pay-later’ companies

The top U.S. agency for consumer financial protection will scrutinize credit card reward programs after a surge in customer complaints, its chief said. Rohit Chopra, director of the U.S. Consumer Financial Protection Bureau, has clashed with credit card issuers since last year over regulations capping late fees. “We are going to be looking into the credit card rewards market due to an increase in consumer complaints,” Chopra told reporters on the sidelines of an industry conference in Washington. His remarks signaled the agency could also issue rules or take enforcement ...

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China pushes banks to speed approvals of new loans to private developers, say sources

Chinese regulators are pushing banks to speed up approvals of new loans to cash-starved private property developers, people with knowledge of the matter said, a bid to revive homebuyer sentiment that risks denting lenders’ asset quality. The effort uses the “whitelist” mechanism, Beijing’s latest support measure aimed at easing the sector’s unprecedented liquidity squeeze and spurring home purchases, as new home prices fell in February for an eighth straight month. Most top domestic banks have so far shied away from significantly bolstering credit exposure to the crisis-hit sector despite repeated ...

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Fed officials still betting on inflation slowdown, but caution rising

Federal Reserve officials said on Monday they still had faith that U.S. inflation will ease, with housing price increases in particular expected to help pull down the headline pace of price increases, but also acknowledged an increased sense of caution around the debate. “Although housing-services inflation remains quite high, the current low rate of increase on new rental leases suggests that it will continue to fall,” Fed Governor Lisa Cook told an event hosted by Harvard University in which she endorsed a “cautious” approach to easing monetary policy. In an ...

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Weakness in US investment keeps the focus on the consumer

Investment has lagged behind other parts of the economy The US economy beat expectations throughout 2023, thanks primarily to the strength of consumer and government spending growth while net trade also made a positive contribution. The main disappointment was business investment. Private non-residential fixed investment is only up 11% on its pre-Covid peak, but more significantly as the chart below shows, is tracking around 8 percentage points below where the pre-Covid trend suggests it should be. Business equipment investment has performed even more poorly with the level of spending actually ...

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Across US, homeless initiatives highlight a growing crisis

U.S. state and local governments pushed ahead this week with divergent strategies to deal with the country’s homeless crisis, aiming either to raise more funds to address the issue or to empower authorities to rid public places of its visible signs. In California, voters narrowly approved a ballot measure that prioritizes funding for homeless services. In Chicago, voters appeared to reject a tax increase on property transfers worth more than $1 million, spelling the defeat of a plan that may have raised $100 million a year to benefit the city’s ...

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Fed posts record loss of $114.3 billion in 2023

The Federal Reserve said on Tuesday that it officially saw a net negative income of $114.3 billion in 2023, a record loss tied to expenses related to managing the U.S. central bank’s short-term interest rate target. The loss last year follows $58.8 billion in net income in 2022, the Fed said. The numbers released were an audited tally following preliminary numbers reported earlier this year. The Fed has stressed repeatedly that net negative income does not impede its ability to operate or conduct monetary policy. By law, the Fed hands ...

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S&P ups India growth forecast to 6.8% for FY’25

S&P Global Ratings on Tuesday raised India’s growth forecast for the next financial year to 6.8 per cent, but flagged restrictive interest rates as a dampener for economic growth. The Indian economy is estimated to have clocked a growth of 7.6 per cent in the current fiscal. In November, last year, the US-based agency had projected India’s growth to be 6.4 per cent in 2024-25 fiscal on robust domestic momentum. “For Asian emerging market (EM) economies, we generally project robust growth, with India, Indonesia, the Philippines, and Vietnam in the ...

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