Rafael Domenech (BBVA Research) | Though 2022 should be a better year for GDP growth in the Spanish economy than 2021, the current outlook is also far more uncertain than it was a year ago, due to the appearance of new risks and an increase in existing ones — making forecasts even more volatile. Key points There has been a clear acceleration in recovery over the current year: from a…
Pablo Pardo (Washington) | In September, the slowdown has, unexpectedly, arrived in the US. The main culprit is the Delta variant of the coronavirus, which is once again claiming 1,500 lives daily and threatens to cause a ‘W’ revival. Until just a month ago, the biggest question regarding the US economy was whether its growth would beat China’s for two years in a row. The last time US GDP growth…
JP Marín-Arrese | The Spanish PM Sánchez seeks to regain his dwindling popular support after the crushing defeat in Madrid’s regional elections back in May. At mid-term, he discovered, much to his surprise, the cost of enforcing long-lasting restrictions to overcome the pandemic. The Opposition took advantage of the people’s weariness and fear of lay-offs. His initial steps to stage a large-scale inclusive revolution either faded away or didn’t pay…
Lidia Conde (Francfort) | Christoph Schmidt, chairman of the Franco-German economic think tank for the past year – when he stepped down as chairman of the council of wise men advising the Berlin government – makes no secret of his concerns: “Both the European Green Deal and the Next Generation EU nourish the hope that Europe will emerge stronger from this crisis in the end. But between the EU’s ambitious plans and the final success, the final results, there is a long way to go. And on that road, member states will have to undertake the structural reforms that will increase their long-term growth potential and show their readiness to return to compliance with the stability and growth pact, with the debt rules”.
Johannes Müller Head of Macro Research DWS | Until the Covid-19 virus is finally defeated, the recovery looks set to continue at an uneven pace. In our view, pandemic containment will remain an economic drag for the foreseeable future. Over the course of the summer, we have already seen signs of the initial, V-shaped recovery giving way to a much flatter curve of improving global economic activity. The good news is that most developed countries appear better prepared for potential renewed virus surges in the fall than they were in spring.
Chris Iggo (AXA Investment Managers) | The second quarter was disastrous for society and the global economy. The danger on both fronts is passing only slowly. Yet the quarter was great for markets. Barely any asset class delivered a negative return. Trillions of dollars of money was created and central bank balance sheets boomed. It has been a lesson in not underestimating the power of policy. Cheap valuations and rocket-fuel policy drove risk assets. The starting point for Q3 is not quite the same. Where fundamentals go is much more important now.
MADRID | Global GDP showed a moderate growth recovery in the second quarter. In Spain, forecasts point to GDP growth accelerating again to 1% Q0Q, one of the highest rates in the eurozone.
MADRID | By Fernando G. Urbaneja | Spanish PM Mariano Rajoy faces 2015 with electoral commitments and weak prospects. The goal of the Popular Party (PP) is to reach enough votes so as to maintain a large part of its power in the Spanish regions and city councils where it has the majority. The final goal is achieving the re-election in the central government by means of achieving the recovery.
MADRID | By Julia Pastor | ECB’s Mario Draghi brought put the bleak panorama that the Eurozone’s economy is facing on the table, and we saw it again reflected in the not-so-promising September manufacturing PMI. The index came in at 50.5 compared to 50.7 in the prior month, whereas EZ Services PMI accelerated at 52.8 for September versus 53.1 in August. Even the composite index plummeted to its lowest fee in the last nine months and reached 52.3. In Germany, both manufacturing and services indexes have also decreased; while in France only manufacturing improved, although it is still contracting.
MADRID | The Corner | Supply and demand conditions for Eurozone credit generation are improving – this is clearly reflected in the ECB’s latest Bank Lending Survey – but the way towards a full normalisation is still long. We believe that reduced bank funding costs might support, but will not aggressively accelerate, the recovery in credit growth.