WASHINGTON | By Pablo Pardo | Would the true IMF prediction please stand up? The Fund has just predicted a growth of 0.9 percent GDP for Spain in 2014. Three months ago, it was 0.6 percent. Seven months ago, it was 0.2 percent.
SAO PAULO | By Marcus Nunes via Historinhas | The Fed’s (and central banks in general) preferred tactic is “wait-and-see”, usually expressed in the form of “we will monitor closely”! Instead of becoming a focal point for the coordination of expectations, inflation has become a barrier to getting the economy’s recovery back on track.
MADRID | By The Corner | “I would like to stress that the risk of a self-reinforcing deflationary downward spiral consisting of falling wages and prices, as evoked by some, is also low, despite the present, very low inflation rates in the euro area. These are mainly a result of falling energy prices and the adjustment process in crisis countries,” European Central Bank Governing Council member Jens Weidmann said on Tuesday, playing down deflation risk. Anyway, what happened with the ECB’s 2pc inflation target?
MADRID | By Francisco López | Investors keep betting on European actives, even though the eurozone economies are facing some serious problems: deflation risk, unemployment records and even a possible war in Ukraine. Why does the European stock exchanges dominate analysts’ recommendations?
MADRID | By Julia Pastor | Amid the debate on the euro zone’s eventual japanisation due to low inflation levels, we wonder if Spain could be the first member state with severe signs of this illness. Inflation is near 0% since six months ago and markets’ expectations suggest an average price index scarcely over 1% for next five years, and under 2% in a decade. Along with Portugal, Spain is the EU economy having more price indicators’ components in red year-on-year rates, namely 40% against 20% of Europe’s average. That means that 2 out of 3 goods in Spaniards’ shopping basket are affected by deflation. Although good for the country’s competitiveness, there is a risk in the process of public as well as private debt deleveraging.
MADRID | By Jaime Santisteban | BBVA takes a look on the bright side of the Spanish economy in 1Q14: growth, exports, domestic demand, labor market, public spending reduction. Santander urges the EU to hasten arrangements on SRM to meet Banking Union agenda. Otherwise, stress tests won’t have credibility.
MADRID | By The Corner Team | Greek billionaire, investor, philanthropist and speculator Geoge Soros is well known for his pessimissm towards the euro and his enthusiasm for getting headlines. During a visit to London for his book tour, he made a case against the excess of austerity in the eurozone and critizised the recipes imposed by the German Parliament on its neighbours like Spain.
NEW YORK | A guest post by Benjamin Cole via Historinhas |The U.S. Bureau of Labor Statistics tracks “unit labor costs,” and back on February 6, they came out with their latest report. Usually I look for this report, but this time I missed it. The news? We are in deflation, when it comes to labor costs.
By David Denton via The Richter Scale | For anyone who was growing up in the 1970s there is a short list of things that one has to be concerned about: The music of The Bay City Rollers, the instant pudding – “angel delight”, playing rugby against the Welsh and inflation. Although the oil price shocks affected all industrialised economies inflation had a particularly severe impact on the UK, we quickly became known as the sick man of Europe.
MADRID | The Corner Team | Investors are most likely to hear the ECB repeat (again) how prepared it is to act and use all kind of unconventional devices on next Thursday meeting, after inflation in the euro zone fell to 0.7% in December, its lowest level since the common currency was born. “As fears of deflation increases, the central bank cannot remain unable to act,” analysts say.