Economy

Euro-area economic outlook: The hope for the recovery lives!

The Corona pandemic is in the middle of its second wave, but the signs of an imminent economic upturn are increasing. This is illustrated by the current development of out leading economic indicator. The DZ BANK Euro Indicator rose by 0.8 percent to a level of 98.8 points in January 2021. This means that the indicator’s annual rate of change of +0.2 percent is above the zero line again for the first time in around two and a half years. The setback in November, when the beginning of the lockdown in a whole series of countries had a noticeable impact on the European sentiment indicators in particular, was more than made up for in the past month. Almost all the sub-indicators included in the calculation have recently contributed to the improvement in our leading indicator.  For example, consumer confidence in Europe recovered somewhat in December according to the EU Commission’s…

China’s economy is „humming“ again

China’s economy is running at full speed again, with industry in particular „humming“, while the retail sector is increasingly making up for its losses from the spring. This is shown by the latest figures for industrial production (7% y/y) and retail sales (5% y/y) from November. At the same time, sentiment readings from the industrial and service sectors have almost universally climbed to multi-year highs. The momentum of the Corona recovery has thus continued unabated in the closing quarter of the crisis year 2020. Economic growth is currently expected to return to pre-Corona levels, and we expect a growth rate of around six percent in the current fourth quarter. In 2020 as a whole, China is one of the very few economies to achieve positive economic growth at all.It borders on bitter irony that the country of origin of the pandemic has become one of the winners of the crisis….

Results of DZ BANK’s 50th SME survey: Covid-19 still a burden

The Corona pandemic has SMEs firmly in its grip. Increased infection figures and a renewed lockdown are preventing the economic recovery from the third quarter from continuing for the time being. The longer the crisis lasts, the greater its impact will be on many companies. It is little consolation that some sectors, such as construction, have so far been largely spared the negative economic impact. Overall, the results of our current representative survey of 1,500 SMEs, which we conducted for the 50th time this fall, show that the mood among SMEs is somewhat more positive than at the time of the first lockdown in the spring. Nevertheless, the current crisis represents the greatest challenge for SMEs since the financial crisis, if not longer. However, SMEs went into the crisis well prepared: according to calculations by the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken BVR (Federal Association of German Cooperative Banks), their…

USA: Corona makes job engine stutter

The US economy loses momentum in the winter. More and more indicators are pointing to this, including the November employment report. Although the recovery process on the labor market has continued recently, the pace has slowed visibly once again: the unemployment rate fell from 6.9 percent in the previous month to 6.7 percent. Compared with the sharp 1 percentage point decline in October, the situation therefore improved only slightly in the past month. At the same time, the increase in employment fell to 245,000 in November, compared with around 610,000 in October. The reason for this development can be quickly identified: the corona pandemic is once again on the rise and is dominating events on the labor market. The increase in new infections was dramatic in November. New lockdown measures are therefore threatening and the service sector as a job engine is stuttering. The leisure and accommodation sector, for example,…

Christmas presents from the ECB

The Covid 19 pandemic continues to give cause for concern. Many countries in the Eurozone are currently tightening their contact restrictions again. The growth in economic output in the euro zone is likely to be negative in the fourth quarter of this year and the first quarter of next year. For this reason, the ECB once again feels obliged to relax monetary policy once more. ECB head Christine Lagarde announced at the last ECB meeting that the central bank is preparing an extensive easing package for December. According to the ECB Chairwoman, all monetary policy instruments will be put to the test. In the wake of the press conference, some ECB representatives spoke out and even put forward new measures. PEPP: The central bank’s sharpest weapon We expect the bond purchases under the PEPP (Pandemic Emergency Purchase Programme) to be extended until the end of 2021. The central bank is…

Japan’s economy with strong „rebound“ in summer

Japan’s economic performance in the third quarter, at 5.0 percent compared to the previous quarter, has, according to preliminary figures, made a stronger-than-expected upward leap. This was chiefly due to catch-up effects in consumption following the corona low in the spring and a sharp rise in exports of goods. The expansive fiscal policy also helped. However, it has not yet been possible to return to the pre-crisis level seen at the beginning of the year, which was already weak in any case. In addition, the result for the second quarter was again revised downwards to -8.2 percent (Q/Q). Although Japan’s domestic service sector, and in particular the hotel and restaurant industry, tourism and all leisure-related sectors, continues to suffer from corona-related restrictions, private consumer spending grew by 4.7 percent (Q/Q) in the summer, compared with -8.1 percent in the spring „corona quarter“. State income support for private households helped to…

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