The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program
Scholz wants to further strengthen Germany as a location with subsidies
Chancellor Olaf Scholz (SPD) wants to further strengthen Germany as a business location in the current transformation with state aid for entrepreneurial investments. In a speech at the International Motor Show IAA Mobility, he was confident that Germany has a future as a location for the automotive industry, despite the challenges posed by the conversion to climate neutrality. The federal government is currently creating the conditions for Germany to become climate-neutral by 2045 and remain “a strong industrial country at the same time”, as Scholz said according to the text of the speech distributed in advance.
Scholz: We will remain the export nation that we are
Chancellor Olaf Scholz (SPD) has rejected criticism of the export model of the German economy. There are always times when some countries falter in their growth and this would then also be felt in Germany. But anyone who then “excitedly discusses that the export strength of the German economy is actually their fault – in any case, they have me as their opponent,” said Scholz at the International Motor Show IAA Mobility in Munich. “We will remain the export nation that we are. And we will get through this even in times when some markets are weakening.”
VDA: Site conditions are becoming increasingly difficult in this country
The President of the Association of the Automotive Industry VDA, Hildegard Müller, has lamented the poor economic conditions in Germany. Speaking at the opening of the IAA Mobility International Motor Show in Munich, she said investments in Germany were falling and high electricity prices and taxes were making it harder for the economy.
Geywitz: 2024 will be another very difficult year for the construction industry
Federal Building Minister Klara Geywitz (SPD) expects 2024 to be another very difficult year for the construction industry and, according to her own statements, is therefore relying on measures that will take effect quickly to support the construction industry. “It is clear that the market will get used to the current level of interest rates,” said Geywitz. “But 2024 will be another very, very difficult year for the construction industry until we can assume that all market players will have gotten used to the new conditions by 2025,” she predicted.
Lawsuit announced due to inaction of the tax offices in the real estate tax reform
The Association of Taxpayers (BdSt) and the Owners’ Association Haus & Grund (H&G) want to sue against the actions of many tax offices in the property tax reform. “Millions of objections to property tax assessments have not been processed by the tax offices for over half a year,” both associations explained. It is an “absurdity” that citizens are denied a judicial clarification. Because only if an objection to the property tax assessment is rejected, the way to the tax court is possible.
Stark-Watzinger wants to invest heavily in Fusion
According to Federal Research Minister Bettina Stark-Watzinger (FDP), with a new funding program for fusion research, the federal government wants to invest in nuclear fusion “massively and openly to any technology”. They also want to “create a fusion ecosystem with industry so that a fusion power plant can become a reality in Germany as quickly as possible.” The question is no longer whether the merger will come. “The question is rather whether Germany is there,” emphasized the FDP politician. That is their goal, explained Stark-Watzinger. The energy crisis has shown everyone how essential a clean, reliable and affordable energy supply is. Fusion is “the huge opportunity to solve all our energy problems”.
Poland wants to significantly increase its defense budget in view of the Ukraine war
Because of security concerns about the war in neighboring Ukraine, NATO country Poland wants to significantly increase its defense budget. In the coming year, Warsaw will “spend 137 billion zlotys (around 30.6 billion euros) and thus more than four percent of its gross domestic product on defense,” said President Andrzej Duda on Tuesday, according to the Polish news agency PAP. This is an increase on the four percent already planned for this year and far more than the two percent agreed by the NATO partners.
ECB: APP bond holdings fall less sharply in August
The reduction in bond holdings purchased by the European Central Bank (ECB) under the APP program slowed in August. As the ECB announced, stocks fell by 17.995 (July: -31.310) billion euros. APP holdings of public bonds decreased by 16.598 (-26.424) billion euros and corporate bonds by 0.986 (-3.158) billion euros. Holdings of covered bonds were flat after falling 1.170 billion euros in July. ABS portfolios fell by EUR 0.411 (-0.558) billion.
Fed/Waller currently on wait and see – not quick rate hike
Fed Governor Christopher Waller currently sees no reason for a short-term interest rate hike. Recent economic data suggested the Fed could be cautious, Waller said, in line with Fed Chair Jerome Powell’s speech at the bank’s annual meeting in Jackson Hole late last month. “There is nothing to indicate that we need to do anything in the near future,” said Waller.
US industrial orders down in July
US industrial orders fell in July by 2.1 percent compared to the previous month. It was the first decline after four consecutive increases. Economists had expected a slightly stronger decline of 2.3 percent. In the previous month, incoming orders had risen by 2.3 percent.
Saudi Arabia extends subsidy cut
Saudi Arabia extends its funding cut until the end of the year. According to the country’s official press agency, citing a representative of the Energy Ministry, the cut in oil production by 1 million barrels a day is now expected to last until the end of December. Production in October, November and December will be around 9 million barrels a day. The cut was implemented in July and initially extended until the end of September. According to media reports, Russia also announced that it would extend the funding cut.
Report: Modi wants to change his country’s name from India to “Bharat”.
In India, suspicions grew on Tuesday that Prime Minister Narendra Modi wants to abolish his country’s official name and change it to “Bharat”. In an official letter to the participants of the G20 summit at the weekend, President Draupadi Murmu invites the heads of state and government to a state banquet as “President of Bharat”.
+++ economic data +++
US/Conference Board Index for July Employment Trend revised to 114.71 from 115.45
Brazil Industrial Production July -0.6% MoM – IBGE
Brazil Industrial Production July -1.1% yoy – IBGE
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(END) Dow Jones Newswires
September 05, 2023 13:00 ET (17:00 GMT)