Tag Archives: European Central Bank

Germany’s second partial lockdown is weighing on consumer morale | Instant News

BERLIN (Reuters) – German consumer morale fell further into December as a partial lockdown to curb a wave of the coronavirus in Europe’s second largest economy hit household income expectations as well as their willingness to buy, a survey showed on Thursday.

FILE PHOTOS: People wearing face masks take pictures on the shopping street Schloss Strasse, as the coronavirus disease (COVID-19) outbreak continues, in Berlin, Germany, 24 October 2020. REUTERS / Fabrizio Bensch

The GfK Institute said its consumer sentiment index, based on a survey of about 2,000 Germans, fell to -6.7 in November from -3.2 in the previous month.

The figure missed Reuters forecasts for a narrower decline to -5.0.

GfK consumer expert, Rolf Buerkl, said although retail shops have remained open so far, the closure of restaurants, bars, hotels and entertainment venues since November 2 has clouded consumers’ moods.

The increasing number of COVID-19 increases uncertainty so that more Germans are holding back their money, Buerkl added.

“The hopes for a speedy recovery that emerged in early summer are definitely dashed,” said Buerkl.

German business morale also fell in November, suggesting that the economy will shrink in the fourth quarter due to new restrictions, the Ifo agency said on Tuesday.

Germany’s infection rate has risen and its cases are close to one million, with daily deaths from COVID-19 hitting a record 410 on Wednesday.

Chancellor Angela Merkel agreed with the leaders of Germany’s 16 federal states to extend and tighten measures against the coronavirus until at least December 20 and they are likely to extend this to January, he said on Wednesday.

“Only a real drop in infections and easing of restrictions will bring even more optimism,” said Buerkl, adding that the rate of infection in the coming weeks will determine whether consumer sentiment can stabilize again.

The consumer climate indicator predicts the development of real private consumption in the following month.

A reading of the indicator above zero indicates growth in private consumption from year to year. Below zero values ​​indicate a decrease compared to the same period last year.

According to GfK, a one-point change in the indicator corresponds to a 0.1 percent year-on-year change in private consumption.

The “willingness to buy” indicator represents a balance between positive and negative responses to the question: “Do you think now is a good time to buy big things?”

The income expectations sub-index reflects expectations about developments in household finances in the next 12 months.

The additional business cycle expectations index reflects the assessment of those who question the general economic situation in the next 12 months.

Reporting by Riham Alkousaa; Edited by Michael Nienaber


image source

Italy, Netherlands most exposed if aid is withdrawn – ECB – UK | Instant News

(ANSA) – ROME, 25 NOV – The European Central Bank (ECB) said in a report on Wednesday that abruptly ending support measures brought in due to the COVID-19 pandemic could cause a cliff edge effect on household and corporate incomes , with a direct impact on economic activity in 2021, added that Italy and the Netherlands are the EU countries most exposed to this risk.
“Countries that rely more on moratoriums, direct support and tax breaks appear to be more affected by the bluff in policy support for 2021,” the ECB said in its Financial Stability Review.
“In the largest euro area countries, simulations show that such an effect will be most pronounced in the Netherlands, mainly due to the withdrawal of most direct support coupled with the end of tax breaks and short-term employment schemes.
“Likewise in Italy, the simultaneous end of a large part of the loan moratorium, exit from short-term work schemes and the end of direct support would indicate a substantial decline in support for recovery by 2021”. (ANSA).