Bankinter | The German government has approved a tax relief package worth €46 billion (11% of GDP), which will need to be ratified by parliament. The stimulus includes a corporate tax cut of 1% a year from 2028 (to 25% from the current 30%) and deductions for the purchase of new machinery and other equipment. The Houses could pass it by the end of the summer. Bankinter analysis team’s view:…
CdM | Economic sentiment has improved again in Germany. In the May survey, the ZEW indicator shows that, at 25.2 points, it is 39.2 points higher than in the previous month, thus clearly in positive territory. ‘With the arrival of the new government, some progress in the tariff disputes and a stabilising inflation rate, optimism has increased.’ This is according to ZEW President Professor Achim Wambach, who adds that ‘expectations…
Bankinter | Moody’s confirms its rating at Aaa, with a stable outlook. It views the defence and infrastructure investment plan positively and revises its growth forecasts upwards by 0.5 p.p. to 1.4% in 2026 and 1.3% on average between 2026 and 2023. For 2025, it still expects the German economy to remain stagnant. Analysis team’s view: Good news. The support of the rating agencies should bolster the Bund, following the…
CdM | German investor confidence has worsened significantly in April as a result of “erratic changes” in US trade policy, according to the Leibniz Centre for European Economic Research (ZEW), reports Europa Press this morning. Specifically, the German investor confidence figure stood at -14 points in April, compared to 51.6 in the previous month, which is the worst reading of the index since July 2023, after suffering the biggest monthly…
Norbolsa | German economic institutes last week downgraded growth expectations for the German economy to 0.1% in 2025 from 0.8% expected in September, when considering Trump’s tariffs on steel, aluminium and cars. The tariffs announced on April 2, but suspended on Wednesday, could further drain the German economy and lead to a third consecutive year of contraction, the institutes said, although they did not include them in their economic projections….
Bankinter | February’s Trade Balance and Industrial Production, not yet affected by the new tariff environment. (i) Industrial Production -down 4.0% in February against the 3.6% drop estimated and 1.6% previous. (ii) Trade balance €17.7 billion against €18.5 billion estimated and €16.2 billion previous (revised from €16 billion). Exports up 1.8% month-on-month versus 1.5% estimated and 0.0% previous (revised from 2.5% down). Imports up 0.7% month-on-month against the 0.4% drop…
Bankinter | Inflation (preliminary data) in Germany eases one-tenth in March to 2.2% (versus expected 2.2% versus previous 2.3%). Today the EMU CPI was published, standing at +2.2% versus the previous +2.3%. For now, inflation is improving in Germany, Spain (+2.3% versus +3.0% previously) and Portugal (+1.9% versus 2.4% previously), remains stable in France (+0.8%) and is picking up in Italy (+2.0% versus +1.6% previously). Indeed, in Portugal, the preliminary…
CdM | Germany’s economic expectations ‘improve considerably’ in March. The ZEW indicator of economic sentiment stands at 51.6 points, which is 25.6 points above the previous month’s figure and exceeding the market forecast of 48.1. The last time the indicator increased so substantially was in January 2023. ‘This optimism is probably due to positive signals about future German fiscal policy, such as the agreement on the multi-billion-euro financial package for…
Banca March | In the new Parliament, which will not take office until 24 March, the far right AfD and the far left Die Linke have 216 seats out of a total of 630. With more than a third of the votes, they could block the easing of the deficit. However, the current parliament has the power to amend the constitutional article that restricts the structural deficit to just 0.35%…
Annalisa Piazza (MFS Investment Management) | Following the eventful discussions and a non-binding motion on immigration approved by the Bundestag last week, the focus ahead of the February 23rd election is now shifting more towards immigration rather than the economy (and its structural problems). Given that Friedrich Merz made it clear that the CDU would not form a coalition government with AfD, a CDU-SPD coalition remains the most likely outcome…