Tag Archives: Economic Output

Germany

UPDATE 1-German investor morale fell in April on lockdown fears, said ZEW | Instant News


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BERLIN, April 13 (Reuters) – Investor sentiment in Germany fell unexpectedly in April, the ZEW economic research institute said on Tuesday, citing growing concerns that private consumption could be depressed as Europe’s biggest economy got closer to extending lockdown measures.

ZEW said the investor’s economic sentiment survey fell to 70.7 points, the first drop since November 2020, from 76.6 the previous month. A Reuters poll forecasted the increase to be 79.0.

“Financial market experts are somewhat less euphoric than the previous month,” said ZEW President Achim Wambach in a statement. “The ZEW economic sentiment indicator, however, is still at a very high level and the current situation is considered much more positive than in March.”

Germany tightened lockdown measures in December to fight a third wave of coronavirus infections and the economy is expected to shrink in the first three months of this year.

Hopes for a return to growth in the second quarter have been tempered by expectations that restrictive measures will be extended beyond mid-April to stop an exponential rise in infections.

“The ZEW indicator is preparing us for another delay of the anticipated economic recovery,” said Thomas Gitzel, chief economist at VP Bank Group. “The limitation on gross domestic product growth in the second quarter is too high. The ZEW headline tells us that the bar must be lowered. “

Economists earlier this year predicted German growth of 3% based on expectations of a slow return to normal economic activity.

The ZEW gauge for current conditions rose to -48.8 points from -61.0 the previous month, confirming an assessment that the German economy remains in relatively good shape as increasing demand for goods from China and the United States keeps factories humming.

“Concerns about a tighter lockdown have led to lower expectations for private consumption,” said Wambach. However, the export prospects are better than the previous month. (Written by Joseph Nasr; editing by Maria Sheahan, Larry King)

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Italy

UPDATE 1-Italy prepares a new economic stimulus package of 40 billion euros – source | Instant News


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ROME, April 12 (Reuters) – The Italian government is preparing a new stimulus package worth around 40 billion euros ($ 47.60 billion) to support its coronavirus-hit economy, sources close to the matter said on Monday.

Extra borrowing will likely push this year’s budget deficit above 10% of gross domestic product (GDP), up from 9.5% in 2020 when the economy shrank 8.9% as a result of the coronavirus curbs, government sources told Reuters last week. .

The money will fund additional grants for businesses forced to close due to coronavirus restrictions and extend the existing debt moratorium for small and medium-sized companies, which have been hit by restrictions aimed at curbing infections.

Rome’s last official estimate, made by the previous government in January, predicts a deficit-to-GDP ratio of 8.8% this year. It is based on a forecast of 6% economic growth, which officials say should be revised to a figure of between 4% and 5%.

The new stimulus will also increase Italy’s huge public debt, equivalent to 155.6% by the end of 2020 and proportionally the second highest in the eurozone after Greece.

Italy last recorded a double-digit deficit in the early 1990s.

The new deficit and debt targets, along with multi-year GDP growth forecasts, will be published in the Treasury’s Economic and Financial Document, which is expected to be approved this week. ($ 1 = 0.8403 euros) (Report by Giuseppe Fonte, written by Angelo Amante, Editing by Rosalba O’Brien and Chizu Nomiyama)

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New Zealand

Cenbank NZ will stand tall as it assesses the resumption of travel, property restrictions | Instant News


WELLINGTON (Reuters) – New Zealand’s central bank is expected to leave interest rates and its quantitative easing program unchanged this week as it assesses the economic impact of some returning international tourists and the government’s new housing market measures.

FILE PHOTOS: A security guard stands at the main entrance of the Reserve Bank of New Zealand located in central Wellington, New Zealand, July 3, 2017. Image taken July 3, 2017. REUTERS / David Gray

In a Reuters poll, all 11 economists expected the Reserve Bank of New Zealand (RBNZ) to stay on Wednesday, and expect to keep the official rate (OCR) at a historic low of 0.25% for the rest of the year.

Only three interest rates are expected to be raised after the second half of next year.

Business sentiment has faded in recent months despite a tremendous rebound in economic activity following the COVID-19 lockdown, and the economy contracting in the last quarter of 2020.

But these losses are offset by improving global prospects, and the return of Australian tourists to New Zealand next week via the COVID-19 ‘travel bubble’ arrangement.

“We expect no change in monetary policy setting at the outlook next Wednesday, with the OCR held at 0.25% for the foreseeable future,” said Westpac economist Michael Gordon.

“The latest news on the domestic economy is weaker than expected, but this is offset by the rapidly improving global outlook and growing concerns about cost and price pressures,” he said.

The central bank cut interest rates by 75 basis points in March last year and vowed to keep them unchanged for 12 months, while also introducing quantitative easing to support economies hit by border closings and coronavirus lockdowns.

But the faster economic recovery and worries about a burning property market supported by historically low interest rates have led markets to speculate that the easing cycle is over, and a rate hike may come sooner than expected.

Under political pressure to cool the housing market, Prime Minister Jacinda Ardern introduced a series of measures that burden investors with new taxes.

Analysts expect the RBNZ to postpone any short-term policy action until assessing the impact of the new property cooling measures on the economy.

“The housing market is an important driver of the current economic momentum, so housing developments have a significant impact on the OCR outlook,” said ANZ economist Sharon Zollner.

Reporting by Praveen Menon; edited by Shri Navaratnam

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Italy

The Italian economy is seen growing 4.1% this year, said the business lobby | Instant News


ROME (Reuters) – The virus-hit Italian economy is forecast to grow 4.1% this year and 4.2% in 2022 in an “uncertain ascent from a deep abyss”, the country’s business lobby Confindustria said on Saturday.

FILE PHOTO: People walk past closed bars and restaurants as Rome became a ‘red zone’, locked in as the country struggles to reduce coronavirus disease (COVID-19) infections, in Rome, Italy, March 15, 2021. REUTERS / Yara Nardi

Italy’s economy shrank to a post-war record of 8.9% last year, and Confindustria said even forecasts for “historically high” growth would not offset last year’s losses.

“By the end of 2022, the economy can hardly bridge the gap opened in 2020 by the pandemic,” said Confindustria while announcing its latest economic forecasts.

The national business association warned, however, that its forecasts are based on expectations for advancement of vaccinations in Italy and across Europe, and are dependent on the coronavirus being “contained in an efficient manner”.

“Given (this) large uncertainty, the risks associated with GDP (gross domestic product) forecasts are high, both on the upside and the downside,” the report added.

The group said it had cut its initial growth forecast for Italy, published in October, by 0.7 percentage points for this year due to weaker-than-expected growth in the last quarter of 2020 and the first three months of 2021.

It said it saw Italy’s deficit at 7.8% of GDP this year and at 4.8% in 2022. The increase in government spending to support the economy pushed the country’s deficit to 9.5% of GDP at the end of last year.

Italy has recorded more than 113,000 deaths from COVID-19 since the outbreak first emerged in February last year, the world’s seventh highest.

Mario Draghi’s government expects GDP to increase by 4.1% this year and 4.3% in 2022, three sources close to the matter told Reuters in March.

The official Rome estimate, made by the previous government in January, predicts a deficit-to-GDP ratio of 8.8% this year, based on an economic growth forecast of 6%.

New deficit and debt targets, along with multi-year GDP growth forecasts, to be published in the Treasury’s Economic and Financial Document, are expected to be approved next week.

The European Commission, International Monetary Fund and Bank of Italy are currently seeing Italy’s growth below 4% this year and next.

Reporting by Giulia Segreti; Edited by Helen Popper

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Italy

EXCLUSIVE-Italy cuts 2021 GDP forecast to 4.1%, raises 2022 to 4.3% – source | Instant News


* Italy will cut its 2021 GDP forecast, raising 2022, sources said

* The government announces new forecasts in April

* PM promises a new stimulus package to support the economy

ROME, March 29 (Reuters) – Mario Draghi’s government expects the virus-hit Italian economy to grow by 4.1% this year and 4.3% in 2022, three sources close to the matter told Reuters ahead of the official publication of new forecasts. next month.

The 2021 forecast is a sharp downward revision from the 6% growth projected by the previous Giuseppe Conte government, which collapsed in January, while the 2022 projection is above Conte’s target of 3.8%.

Both forecasts remain above forecasts of the European Commission, International Monetary Fund and Bank of Italy, which currently see Italy’s growth of below 4% this year and next.

The Italian economy, which is shrinking by a post-war record 8.9% in 2020, is still struggling under the brunt of the coronavirus pandemic. Much of the country remains locked in trying to tame the third wave, with about 20,000 new infections every day.

Italy has reported around 108,000 deaths from COVID-19, the world’s seventh highest tally.

The new growth forecasts, along with updated public finance targets, will be published in the Treasury’s Economic and Financial Document (DEF) due to be published in mid-April.

This forms the initial framework for the 2022 budget and must be sent to the European Commission for approval.

Estimates are subject to ongoing government discussion and are subject to change slightly before they are published, sources warn.

In addition, this policy is based on an unchanged policy scenario so that it does not include the impact of the new stimulus package that will be presented by the government next month.

Therefore, the final growth target will be more ambitious, said the source, also helped by plans to strengthen Italy’s Recovery Plan to raise more than 200 billion euros ($ 235.34 billion) of EU funds.

Italy has consistently underperformed its European counterpart over the past two decades, with a long tradition of missed GDP targets. The last time it recorded growth of over 4% was in the late 1980s.

Repeated increases in government spending to support the economy will likely push Italy’s budget deficit closer to 10% of national production this year from 9.5% in 2020, a Ministry of Finance official told Reuters this month.

This estimate will also be issued in the DEF and will mark an upward revision of the previous estimate of 8.8%.

The additional borrowing will also increase Rome’s huge public debt, the second highest in the eurozone after Greece and the equivalent of 155.6% at the end of last year.

$ 1 = 0.8498 euros Edited by Alison Williams

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