Crédito y Caución (Atradius) | High inflation is the current hot economic topic. In June, inflation was running at over 11% in the Netherlands1; for the eurozone it was nearly 9%, which is surely a record. It is also sure that the inflationary bite is being felt, particularly in the purchasing power of lower income groups. The question is, how long will this high inflation last? In recent months, energy…
Ifo | The current situation in the German automotive industry deteriorated sharply in August. In the ifo survey, the value of the indicator fell to minus 10 points, down from plus 7.5 points in July. Expectations, however, brightened somewhat, from minus 4 points to zero. This is the first time since April that the overall climate was below zero. “The general darkening of mood in the economy is also reflected…
The downturn in the German private sector economy deepened in August, as business activity fell for the second month running and at a fasterrate in August. This is according to the latest ‘flash’ PMI® data from S&P Global. The deepening downturn was linked by surveyed businesses to a combination of factors, S&P Global noted. These included uncertainty, high inflation and rising interest rates. That said, companies’ expectations registered an uptick…
Spain’s GDP remains -3.2% below pre-pandemic levels, after its historic fall in 2020 (-10.8%). It is last in the EU in terms of GDP recovery and also in terms of business profits: Spanish companies are some 11 points below the European average and, together with Portugal (-6.3%), Spain is the country showing the worst rate of recovery in business profits, which are still 6.2% below pre-covid levels, according to the…
Juan Pedro Marín-Arrese | Blaming Putin for the current inflationary bout no longer holds. No one disputes that sanctions aimed at crippling the Russian economy following the aggression on Ukraine have made the prices of vital commodities skyrocket, mainly due to wild speculative movements. Nowadays, we are witnessing sharp falls in raw materials while prices gather further momentum. Thus, claiming we only face a cost shock from such products seems…
Crédito y Caución (Atradius) | Owing to the war in Ukraine and sanctions on Russia, Eastern Europe is likely to see a 0.6% contraction of GDP in 2022, followed by 1.1% growth in 2023. We forecast that the economy of Russia will contract by 8.0% in 2022, followed by another 2.8% decline in 2023. Sanctions deprive Russia of much-needed industrial components. On the other hand, Russia still exports large quantities…
Brexit – the United Kingdom’s exit from the European Union – was the great political attraction of Boris Johnson’s era as British Prime Minister. However, its effects have been disastrous for international trade, especially for Spain. As the daily Expanión explains, Brexit, Boris Johnson’s great electoral claim, has taken away 18 billion euros in trade between the United Kingdom and Spain. In 2021, the first full year of Brexit, UK…
Morgan Stanley | The steel companies have historically done badly in recessions. Currently, with the risks of recession on the rise, margins at spot price continue to weaken and we have seen an important derating. It is likely that delays in prices support Q2 profits, but we see a significant slowdown from the next quarter. We still prefer carbon steel to stainless steel. ArcelorMittal (OW): we expect the company to generate…
Renta 4 | According to Bloomberg, the consortium formed by KKR, GIP and Stonepeak would be tabling a more attractive offer for Deutsche Telekom’s towers than that presented by Cellnex and Brookfield. The possibility that Vodafone, via its affiliate Vantage, and even American Tower, have already withdrawn from the process, also appears to be ruled out. The news report says that Deutsche Telekom’s decision could be revealed before the end…
Nick Ottens (Atlantic Sentinel) | Germans are urged to ration gas. “We are in the midst of a gas crisis,” according to economy and climate minister Robert Habeck. “From now on, gas is a scarce asset.” Russia has reduced supplies to what is its largest customer in the EU in anger over the bloc’s support for Ukraine. All consumers, whether in industry, in public institutions or private households, should reduce…