The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program
OECD slightly raises global economic forecast for 2024
The Organization for Economic Cooperation and Development (OECD) has slightly raised its forecast for global economic growth this year. As can be seen from an interim report that has now been published, this is primarily due to higher growth expectations for the USA and Russia. The OECD now expects that global gross domestic product (GDP), after an increase of 3.1 percent last year, will rise by 2.9 (November economic outlook: 2.7) percent in 2024 and by 3.0 (3.0) percent in 2025 ) percent.
Sentix economic index for Germany falls again
Investors’ assessment of the German economy deteriorated again in February; the economic index surveyed by the consulting firm Sentix among investors fell to minus 27.1 (January: minus 26.1) points. It was the second decline in a row. The situation assessment index fell to minus 39.3 (minus 35.5) points, while the expectations index rose to minus 14.0 (minus 16.3) points. “Germany is stuck in recession and is finding it difficult to get out of it,” said Sentix managing director Patrick Hussy, commenting on the figures. The economic crisis is persistent and the political answers so far offer little hope of improvement.
A sluggish global economy weighs on German exports in December
The weak demand on the world markets is putting a strain on German exports. In December, German exports fell by 4.6 percent in calendar and seasonally adjusted terms compared to the previous month, as the Federal Statistical Office (Destatis) announced. Economists surveyed by Dow Jones Newswires had only expected a decline of 2.4 percent. Compared to the same month last year, exports were also 4.6 percent lower.
DIHK: 2023 was a used export year
The German Chamber of Commerce and Industry (DIHK) has expressed disillusionment with the situation and prospects of the export industry in view of the latest export figures. “2023 was a used year for the German export industry,” said DIHK foreign trade expert Carolin Herweg. Low demand from abroad due to high inflation rates and high interest rates as well as geopolitical risks resulted in a decline in exports of goods in December and throughout the past year. “After the financial crisis in 2009 and the Corona crisis in 2020, it is the weakest result in three decades,” she explained.
BGA: Figures show weakness in foreign trade
The Federal Association of Wholesale, Foreign Trade and Services (BGA) has expressed concern about foreign trade in view of the latest figures. “The foreign trade figures show the continued weakness of German foreign trade,” said BGA President Dirk Jandura. The global economic situation is characterized by increasing protectionism in numerous foreign markets, an erosion of the rules-based trading order of the WTO, confrontational relations between the geopolitical heavyweights USA and China, as well as tendencies towards decoupling on the one hand and diversification efforts on the other.
German service providers accelerate the decline in January
German service providers remained in the contraction zone for the fourth month in a row in January. S&P Global’s Purchasing Managers’ Index for the sector weakened to 47.7 from 49.3 points, according to the final data for the month. Economists had predicted a reading of 47.6. A provisional value of 47.6 was determined for January.
HDE: Consumer sentiment is stabilizing at a low level
After the HDE consumption barometer moved significantly downwards in January, consumer sentiment stabilized in February, according to the German Trade Association (HDE). The index value rose to 93.72 points from 93.57 points in January and 96.35 in December 2023. “The curve is moving sideways, the negative development at the beginning of the year was not the start of a further downward trend,” explained the association. Overall, consumer sentiment continues to lag behind the values before the Corona crisis.
economy of Eurozone decline slows in January
The eurozone economy showed tentative signs of improvement in January. The euro zone’s composite private sector output index, which includes industry and services, rose to 47.9 from 47.6 the previous month, S&P Global reported in a second release. The first report reported an increase to 47.9 points. Economists had expected this value to be confirmed.
Eurozone producer prices fall significantly in December
Industrial producer prices in the Eurozone fell noticeably in December. Prices at the producer level fell by 0.8 percent compared to the previous month, as the statistics authority Eurostat reported. Economists surveyed by Dow Jones Newswires had expected a decline of 0.7 percent. Year-on-year, producer prices were 10.6 percent lower. Economists had forecast a decline of 10.5 percent.
UBS: March meeting of the ECB will be very important
UBS analysts are of the opinion that the European Central Bank (ECB) Council meeting on March 7th will be of great importance for the further course of the central bank. “The ECB will present new macroeconomic projections, which should indicate whether the ECB believes that the conditions for a Interest rate cut could soon be given,” they write in a comment. This will help to assess whether a first cut in April can remain the UBS base scenario or whether a postponement to June is justified.
Government reaches agreement on power plant strategy
Federal Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) have agreed on the essential elements of a power plant strategy as well as specifications for further projects. The Federal Ministry of Economics announced this in a press release. “In addition to the consistent expansion of renewable energies and electricity networks, the decarbonization and security of supply of our electricity system requires modern, highly flexible and climate-friendly power plants,” it said.
Buschmann links rent controls to other projects
Federal Justice Minister Marco Buschmann (FDP) linked the extension of the rent control plan planned by the traffic light government to progress in other coalition projects: “If things are to move forward quickly, then everyone else has to adhere to the agreements in the coalition agreement at the same pace,” he said the Funke media group. “The rent control applies until December 31, 2025. So we still have time without anything changing to the detriment of people.” Buschmann recalled that the year before last he had already presented a specific draft law that would help investigators secure data on an event-related basis. The SPD-led Interior Ministry has so far rejected this initiative.
+++ Economic data +++
France/Purchasing Managers Index Service Jan 45.4 (2nd publication)
France/Purchasing Managers Index Service Dec was 45.7
Italy/Purchasing Managers Index Service Jan 51.2
Italy/Purchasing Managers Index Service Jan FORECAST: 50.6
Italy/Purchasing Managers Index Service December at 49.8
UK/Purchasing Managers Index Service Jan 54.3 – S&P Global/CIPS
GB/Purchasing Managers Index Service Jan PROG: 53.8 – S&P Global/CIPS
UK/Purchasing Managers Index Service Dec was 53.4 – S&P Global/CIPS
Brazil current account Dec deficit $5.8 billion (Nov: deficit $1.6 billion)
Brazil/Foreign Direct Investment Dec $389 million
Brazil/Foreign direct investment 12 months $62 billion
DJG/DJN/AFP/apo
(END) Dow Jones Newswires
February 05, 2024 07:30 ET (12:30 GMT)