ROUNDUP/ Spring forecast: Economy in EU more stable – prices remain high
BRUSSELS – The EU Commission has increased its growth forecast for the European economy. The EU economy will grow by 1.0 percent this year instead of the previously expected 0.8 percent, according to the authority’s spring forecast presented in Brussels on Monday. For the States of euro zone it is now assuming growth of 1.1 percent – after 0.9 percent in the winter forecast published in February. For Germany, growth of 0.2 percent is expected for the current year. Brussels is thus more pessimistic than the federal government.
US: Empire State Industrial Sentiment Index plummets
NEW YORK – In May, industrial sentiment in the US state of New York clouded over more than it had since the beginning of the Corona crisis. The Empire State Index fell to minus 31.8 points from plus 10.8 points in the previous month, the New York Federal Reserve said on Monday. The 42.6-point decline is the strongest sentiment dampener since April 2020.
ROUNDUP/Bundesbank President: Politics in the fight against inflation also required
FRANKFURT – Bundesbank President Joachim Nagel sees politics and business as having a duty in the fight against high inflation. Without a doubt, they must monetary policy “clearly and resolutely counteract the high inflation with interest rate hikes,” affirmed Nagel at a symposium in Frankfurt on Monday. “Central banks cannot do it alone.” A stability-oriented monetary policy can only be successful in the long run “if other players in politics, business and society also work towards this stability goal”.
Germany: real estate prices in cities collapsed by up to 20 percent
According to a research project, real estate prices in large German cities have collapsed by up to 20 percent since mid-2022, adjusted for inflation. This was determined by the new GREIX database, which was presented in Berlin on Monday. In the first quarter of 2023 alone, the purchase prices for houses, apartments or land in Berlin fell by six percent compared to the peak in 2022, in Frankfurt the minus was twelve and in Hamburg nine percent.
Eurozone: Significant slowdown in industrial production
LUXEMBOURG – Production in industrial companies in the euro zone fell sharply in March. In a month-on-month comparison, total production fell by 4.1 percent, according to the Eurostat statistics office in Luxembourg on Monday. Analysts were surprised by the extent of the production slowdown. On average, they had only expected a decline of 2.8 percent.
ROUNDUP: Increased prices and interest rates – treasurer concerned
FRANKFURT – According to a study, following the crises of recent years, it is becoming increasingly difficult for municipalities in Germany to make the necessary investments. “The permanent crisis mode threatens to slow down climate transformation,” said Fritzi-Köhler Geib, chief economist at the state development bank KfW on Monday at the presentation of the annual KfW municipal panel.
Producer prices rise less strongly due to price brakes
WIESBADEN – In Germany, prices at manufacturer level did not rise as much as initially thought in the first three months of the year. The reason is the state price brakes for electricity and gas that have been in effect since the beginning of the year. The Federal Statistical Office revised preliminary figures for January to March downwards on Monday. The revision became necessary because the energy suppliers had initially reported their prices without the price brake.
Germany: Wholesale prices fall for the first time in over two years
WIESBADEN – In April, wholesale prices in Germany fell for the first time in more than two years. Compared to the same month last year, wholesale prices fell by 0.5 percent, as the Federal Statistical Office announced on Monday in Wiesbaden. It is the first decline since December 2020. In March, the rate was 2.0 percent. In the past year, prices have risen by more than twenty percent at times.
Britain pledges hundreds of combat drones to Ukraine
LONDON – Great Britain wants to deliver numerous anti-aircraft missiles and hundreds of combat drones to Ukraine. The drones have a range of more than 200 kilometers, the government in London announced on Monday during a visit by Ukrainian President Volodymyr Zelenskyy.
Russian oil prices are rising again
MOSCOW – The price of Russian crude oil rose last month to a level close to the price ceiling set by western industrialized countries. Between April 15 and May 14, a barrel of the Russian Urals brand cost an average of $55.97, the Interfax news agency reported on Monday, citing calculations by the Ministry of Finance in Moscow. The price cap is $60 per barrel; according to the ministry, the average price for Russian oil in the first few months of the year was $51.
Czech Republic: Unions threaten to strike against austerity package
PRAGUE – The unions in the Czech Republic are threatening to go on strike over the austerity and tax plans of the liberal-conservative government. All limits had been exceeded, said the head of the CMKOS union umbrella organization, Josef Stredula, on Monday. The measures hit employees and their families as well as pensioners hard, criticized the 55-year-old. The association proclaimed the so-called readiness to strike as the last step before work stoppages. The Czech Republic with its suppliers is considered an “extended workbench” for many German companies.
Customer note:
ROUNDUP: You are reading a summary in the business cycle overview. There are several reports on the dpa-AFX news service on this subject.
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