Friday , April 23 2021

Analysts predict "troubled times" for the eurozone



The corresponding Barometer of the Institute in Munich sharply decreased from 19.6 to 6.6 points, the announcement is announced on Monday, the lowest level since mid-2016. Experts have revised their assessment of the current situation of future expectations.

Since 1989, the Institute has asked experts from different countries about the evolution of the economy, and the results rely on the views expressed by 370 experts. Ifo president Clemens Fuest says he expects "turbulent times" for the eurozone economy.

In Italy and Spain, the situation and perspectives worst exacerbated. Prospects for Italy come from budget problems, with experts fearing a faster increase in debt costs. As far as Spain is concerned, this would be the first possible candidate to spread the disease. Expectations have become more pessimistic than those in the previous quarter.

In Germany and France, expectations remain almost unchanged, but the current situation is severely known. On the other hand, the situation in the Dutch economy seems to have improved.

Professional pessimism fits in with the fact that the Ifo Institute, in the context of the global trade war, redefined the export forecast for the eurozone. At the same time, experts expect short-term and long-term interest rates to rise over the next six months, and the US dollar will continue to appreciate. The forecast for this year's inflation rate is slightly increasing from 1.7 to 1.8 percent.

It was hit hardest by the decrease in exports to Germany. In fact, the economy has fallen to fall due to the fall in production in the automotive industry. In addition, economic issues in emerging emerging markets, where car manufacturers sell their production, have contributed to reducing exports.

The unresolved issues of Brexit and the budget dispute within the EU leave little room for optimism. Deutsche Bank also lowered the German economy's growth forecast in 2019, from 1.7% to just 1.3%.

Also, for the first time since the end of 2014, companies saw a drop in new orders.

Complex PMI managers in the industry, measuring activity in the industry and the service sector, fell in October to 53.1 points from 54.1 points last month, according to estimates by London Mark. This is the lowest level since September 2016, but is below the analyst's estimate, which was expecting a drop in the index at 52.7 points.

The PMI indicator of more than 50 points shows the expansion of the economy, and below 50 points the indicator reflects the contraction of the economy.

"Economic progress is pretty strong," says James Nixon of Oxford Economics. Jack Allen, chief economist, says: "October data on economic activity in the eurozone suggest that the major economies of the region will move slightly in the fourth quarter of 2018 over the past three months."

In the third quarter, the eurozone economy recorded a 1.7% year-on-year increase, which was considerably slower than in the previous quarter, and ECB's analysis suggests that further decline could lead to a growth in the eurozone's economy below potential growth dynamics, pressures could be reduced.

Another worrying signal is the rise in industrial producer prices in the eurozone, above expectations in September, mainly due to higher energy prices, according to a report released on Tuesday by Eurostat.

In September 2018, industrial producer prices in the euro area rose by 0.5% in relation to August and by 4.5% in relation to September last year. Analysts investigated by Reuters relate to an increase of 0.4% compared to the previous month and 4.2% of the annual growth rate. Eurostat also changed data for August 2018, when industrial producer prices in the eurozone recorded an advance of 0.4% on the previous month and 4.3% compared to the previous estimate at 0.3% and 4.2%.

The strong growth in industrial producer prices in September is mainly due to energy price developments, 1.6% compared to the previous month and 12.7% year on year. Excluding unstable energy prices, industrial production prices in the eurozone grew by 0.1% in September compared to the previous month and by 1.5% over the same period last year.

In the case of the European Union, industrial production prices rose by 0.6% in September compared to the previous month and by 4.9% in comparison with September last year. As far as Romania is concerned, the prices of industrial production rose by 0.5% in September compared to the previous month, after a 1% increase in August and 6.1% in comparison to September last year, after one in August it was 5, 9%.

Prices of industrial products show inflationary pressures, because if traders and intermediaries do not absorb them, producer prices increase is shifted to consumers, fueling the inflation that the European Central Bank wants to keep below 2% of the environment.


Source link