Germany’s economy ministry plans to downgrade its 2024 economic growth forecast, expecting Europe’s largest economy to shrink by 0.2%, newspaper Sueddeutsche Zeitung reported on Sunday. The forecast for an inflation-adjusted contraction, which the ministry is due to publish on Wednesday, follows a previous government projection of 0.3% growth this year after a 0.3% contraction in 2023. Last month Germany’s leading economic institutes downgraded their forecast for 2024 to a contraction of 0.1%. The ministry, led by Robert Habeck of the Green party, also plans to issue a forecast for 2025 ...

Senior officials from China’s top economic planning agency will brief reporters on Tuesday on steps to implement policies to promote economic growth, the State Council Information Office said in a notice. It said five officials, including the chairman of the National Development and Reform Commission, Zheng Shanjie, would attend the news conference. The topic will be: “systematically implementing a package of incremental policies to solidly promote economic growth, structural optimisation and sustained momentum of development”. The statement gave no further details. Tuesday is the first working day in China after ...

Job surge beats all expectations The September jobs report is unambiguously strong. US non-farm payrolls rose 254k versus the 150k consensus and there were 72k of upward revisions to the past two months of data (the range of expectations was 70k up to 220k). The unemployment rate fell to 4.1% from 4.2%, which only one person out of 71 predicted while wages rose 0.4% month-on-month with August’s rate revised up 0.1pp to 0.5% MoM. On the face of this the Fed should be hiking rates with these sorts of figures, ...

For Europe, the stakes are high in the US elections in November. The EU-US economic relationship is the world’s largest – the value of traded goods and services is more than €1 trillion per year, and each is the other’s largest partner in both trade and investment. The EU has over time become increasingly dependent on the US to soak up its exports. The US has long been the global consumer of last resort, absorbing production from both East Asia and Northern Europe. This role has become even more important ...

Sudden ebbs and flows of inflation without equivalent hits to economic output may be a feature of a post-pandemic world of fragile supply chains – potentially requiring more forceful and hyperactive central banking, and possibly in both directions. The speed of the global inflation spike after the twin shocks of COVID-19 and the Ukraine invasion has by now almost been matched by the disinflation that’s followed. So much so, that central banks are now just as rapidly reversing the steep, and arguably late, interest rate squeeze they used to contain ...

In late September, China’s government launched its biggest monetary stimulus measures since the Covid-19 pandemic—and signaled that more fiscal support was on the way, reflecting leaders’ new urgency in reviving the country’s troubled economy. Although the announcements lifted market sentiment, caution is warranted: The central bank’s interest rate cuts and other policy moves could be ineffective-“pushing on a string”—at a time of weak credit demand, as monetary easing during a downturn does not always work as well as tightening during a boom. Moreover, the steps announced so far do not ...

Led by the U.S. Federal Reserve, developed market central banks in September delivered their biggest interest rate cut push since the easing wave at the onset of the COVID-19 pandemic, while Brazil kicked off a fresh tightening cycle. Five of the nine central banks overseeing the 10 most heavily traded currencies that held meetings in September lowered benchmarks. The Fed delivered a bumper 50 basis point (bps) rate cut to kickstart its easing cycle while Sweden, Switzerland, Canada and the euro area shaved off 25 bps. That was the biggest ...

The European Union’s (EU) decision to raise its tariffs on Chinese electric vehicles (EVs) has prompted speculation about whether the EU and the United States could cooperatively “de-risk” from China. Much like the United States, the EU has developed a “de-risking” playbook with three goals: to protect its economy from outside encroachments, to promote its own competitiveness and resilience, and to partner with others to amplify its economy’s strengths and mitigate its vulnerabilities. In fact, the term “de-risking” was pioneered by European Commission President Ursula von der Leyen and later ...

The European labour market is starting to cool, which is worrying as it could lead to below-par investment and growth, European Central Bank policymaker Mario Centeno said on Friday. Inflation in the euro zone was under control, he also said. Markets are betting that the ECB will have to speed up interest rate cuts with its next move seen on Oct. 17 because inflation dipped under 2% last month while the 20-nation currency bloc is skirting a recession. Speaking at a conference in La Toja, Spain, Centeno said: “The issue ...

Bank of Japan Governor Kazuo Ueda’s efforts to lift rock-bottom borrowing costs face fresh challenges as a yen rebound and the new political leadership’s preference for loose monetary policy raise the hurdle for rate hikes. New Japanese premier Shigeru Ishiba stunned markets this week when he said the economy was not ready for further rate hikes, an apparent about-face from his previous support for the BOJ unwinding decades of extreme monetary stimulus. The surprisingly blunt remarks pushed the yen lower against the dollar and cast fresh doubts over how aggressive ...

Japan’s new economy minister, Ryosei Akazawa, said on Friday that the timing of changes in the Bank of Japan’s monetary policy should be aligned with the government’s broader goal of exiting deflation. “The timing of various monetary policy changes is very important,” Akazawa said in a press conference. “It’s important that they are aligned with our policy priorities such as exiting from deflation and growth in wages and investments.” He added that Prime Minister Shigeru Ishiba and BOJ Governor Kazuo Ueda share this view. Source: Reuters

Japanese Prime Minister Shigeru Ishiba formally instructed his ministers on Friday to compile a fresh economic package to cushion the blow to households from rising living costs, as the new government makes its top priority an exit from deflation. The step comes as Ishiba, previously seen as a proponent of fiscal austerity, now stresses ahead of a general election that his focus is to get the economy to fully shake off the deflation that has weighed it down for the last three decades. “We would need to support people suffering ...

A Singapore court charged a top property billionaire on Friday with obstructing justice and abetting offences by a disgraced ex-transport minister jailed a day earlier in the city-state’s high-profile government graft case, Channel News Asia reported. Ong Beng Seng, the 78-year-old owner of Hotel Properties Ltd HPPS.SI and rights holder to the Singapore Grand Prix Formula One race, is accused of giving gifts worth nearly $300,000 to ex-minister S. Iswaran, who on Thursday became the first former cabinet member to be jailed in Singapore. Source: Reuters (Reporting by Martin Petty; ...

Worries about risks to the UK financial system posed by a global economic downturn have risen sharply to their highest level since the second half of 2019, a Bank of England (BOE) survey showed on Wednesday. The Bank’s twice-yearly systemic risk survey polled 55 financial firms between July 23 and August 12 and asked each participant to list the five risks they believed would have the greatest impact on the UK financial system if they materialised. One-third of participants flagged worries about the threat to the UK financial sector associated ...

Growth in India’s dominant services sector remained robust but slackened to a 10-month low in September as demand slowed, a business survey showed on Friday. The HSBC final India Services purchasing managers’ index, compiled by S&P Global, fell to 57.7 in September from a five-month high of 60.9 in August and was below a preliminary estimate of 58.9. “The headline business activity index fell below 60 for the first time in 2024, but we note that at 57.7, it was still much above the long-term average,” noted Pranjul Bhandari, chief ...