Germany’s central bank expects the country’s economy to grow in April-June for the second consecutive quarter after falling at the end of 2023.
According to preliminary calculations of the statutory office of the Federal Republic of Germany, in January-March GDP increased by 0.2% compared to the previous three months. It fell 0.5% in October-December 2023.
“The economy is likely to expand slightly again in the second quarter,” the Bundesbank said in a statement on Wednesday.
Activity in the services sector was likely to have continued to strengthen on the back of rising household income and consumer spending.
“Growth in household disposable income is likely to take the upper hand from consumer uncertainty,” Central Bank analysts suggested.
However, they noted that the construction sector remains very weak.
The German labor market is expected to remain resilient and wages look set to continue to rise rapidly. This could be a risk to cooling inflation, which the Bundesbank estimates will accelerate slightly again in May.
The final data on Germany’s first-quarter GDP dynamics will be released on May 24, while preliminary information for the second quarter will be presented on July 30.
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed over the past years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3.
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CENTRAL BANK, ECONOMY, EXPERTS CLUB, GDP, GERMANY, MACROECONOMICS, URAKIN
The growth of Ukraine’s real gross domestic product (GDP) in April 2024 slowed to 4.1% y-o-y due to Russian attacks on the Ukrainian energy system, compared to 4.8% in March, 5% in February and 5.2% in January, according to the Monthly Economic Monitor of the Institute for Economic Research and Policy Consulting (IER).
“Due to the intensification of shelling, a significant part of the maneuvering generation was damaged, which caused power outages for businesses and households. Restrictions on electricity supply will lead to a further decline in GDP growth,” commented Oleksandra Betliy, a leading researcher at the IER, quoted in the statement.
Earlier, the Experts Club and Maksim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3
You can subscribe to the Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
Among the positive news, she highlighted the growth of exports and imports due to better logistics through both the Ukrainian sea corridor and road transport, although in April rail transportation decreased by 5% compared to March this year and by 29% by April 2023 to 15.2 million tons.
The IER clarified that the growth of real gross value added (GVA) in the manufacturing industry in April was 10%, while in the mining industry it was about 3%. Better logistics contributed to the revival of the performance of metallurgy and iron ore mining, it said.
According to the Institute, the growth rate of GVA in construction was high, partly due to the construction of fortifications, while the growth rate of trade slowed to 3% against the background of a higher statistical base.
The IER also pointed out that in April, both the tax and customs services exceeded their revenue targets, while the NBU transferred twice as much revenue to the budget.
As reported, after Ukraine’s GDP growth of 5.3% in 2023, the National Bank expects it to slow down this year to 3%, while the government expects it to slow down to 4.6%. According to the Ministry of Economy, GDP growth in January-March this year was 4.5%, while the NBU estimated it at 3.1%.
Earlier, Experts Club and Maksim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3
You can subscribe to the Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
Japan’s economy contracted 0.5% in the first quarter relative to the previous three months, according to preliminary government data. Analysts, whose average estimates are quoted by Trading Economics, had expected a 0.4% decline in GDP.
According to the revised data, the economy was unchanged in the fourth quarter of 2023, while previously reported growth of 0.1%.
On an annualized basis, Japanese GDP contracted 2% last quarter after a revised zero change a quarter earlier. The consensus forecast called for a 1.5% drop in January-March.
Consumer spending in the first quarter decreased by 0.7% relative to the previous three months, business investment – by 0.8%. Government spending rose by 0.2%.
Exports decreased by 5% after growth of 2.8% quarter earlier, imports – by 3.4% (+1.8% in October-December).
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3.
Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
UN economists have improved their forecast for global economic growth in 2024 to 2.7% from 2.4% expected in January.
In 2025, it will increase by 2.8%, while previously it was expected to be 2.7%.
The average growth rate of the global economy in the coming years is expected to remain below the 3.2% recorded on average in 2010-2019.
The revision of the estimate for the current year is mainly due to more positive changes in the economies of a number of large developed and developing countries, in particular Brazil, India, Russia and the United States, the organization’s report says.
According to UN estimates, the US economy will grow by 2.3% this year (1.4% was expected in January), the UK – by 0.8% (0.4%), China – by 4.8% (4.7%), Brazil – by 2.1% (1.6%), India – by 6.9% (6.2%), and Japan – by 1.2% (unchanged).
At the same time, the forecasts for the European Union and the euro area were revised downward – to 1% from 1.2% and to 0.8% from 1.1%, respectively.
“For both the European Union as a whole and the euro area, we expect a gradual recovery in economic activity in 2024-2025, after a noticeable stagnation in many European countries over the past year,” said Grigoriy Agabekyan of the UN Department of Economic and Social Affairs.
This should be facilitated by a slowdown in inflation (it is falling faster than expected in Europe due to a sharp decline in energy costs), income growth in real terms, and the expected easing of monetary policy.
“In fact, a number of central banks in Eastern Europe and the Swiss central bank have already cut their key interest rates, and as inflation returns to its target level, the European Central Bank and the Bank of England are also expected to begin their easing cycles this year. It is also expected that as global trade recovers, exports from European countries will increase,” the expert said.
“As for the somewhat more modest forecasts for the European Union compared to those presented in January, this revision is explained by the fact that against the background of continued sluggish industrial production, economic growth forecasts for a number of countries on the continent that depend on the manufacturing industry have been lowered. This list includes, in particular, Austria, the Czech Republic, Finland, Germany, Hungary, and the Czech Republic. At the same time, Germany’s economy, which is the leading economy in the European Union, shrank by 0.3% in 2023, and in 2024 we assume a recovery of only 0.3%,” Agabekyan said.
The UN forecasts global trade growth of 3.2% in 2024 and 3.6% next year.
GDP growth in developed countries is expected to reach 1.6% in 2024 and 2025, and in developing countries – by 4.1% and 4.3%, respectively.
Earlier, Experts Club and Maksim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3
You can subscribe to the Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
According to Ukrainians, the countries of the Arab world are neutral in the Russian-Ukrainian war. This was revealed by a joint study by Active Group and the Experts Club think tank, “Attitudes of Ukrainians toward the Middle East and Central Asia,” which was presented at Interfax-Ukraine on Tuesday.
“The analysis includes a predominantly positive attitude of our citizens towards such countries as Israel (72.5%) and Turkey (55%), while the attitude towards other countries in the region is mostly neutral. Ukrainians are extremely negative about Iran (76%) and mostly negative about Afghanistan (52.6%),” said Oleksandr Poznyi, director of the research company Active Group.
In addition, the expert added that Ukrainians are mostly positive about countries with which they have trade or cultural ties. This is natural, as such ties promote mutual respect between societies and countries.
In his turn, Andriy Yeremenko, founder of the research company Active Group, emphasized that the attitude of Ukrainians towards the Middle East and Central Asia varies depending on many factors.
“We can see that the attitude of citizens is really certain only in relation to two countries – Iran and Israel. These are the countries where the percentage of those who find it difficult to answer is less than 20%. The rest of the countries have a much higher percentage of uncertainty, which indicates that Ukrainians are not well informed about these countries,” emphasized Eremenko.
Maksym Urakin, founder of the Experts Club think tank, added that building cooperation with the Middle East and Central Asia is very important for the development of the Ukrainian economy, especially in the agricultural and IT sectors. These industries have great potential for development and can become the basis for a mutually beneficial partnership.
“It is necessary to implement a state strategy to reduce the trade deficit and increase Ukraine’s export potential. This will create a more balanced and sustainable economy that will be less dependent on external factors. Ukraine may be interested in agricultural products, IT clusters, and educational services. We are interested in sales markets, agricultural technologies, metallurgy, and chemistry,” Urakin emphasized.
According to him, trade between Ukraine and the countries under study is currently growing rapidly.
“Turkey is the largest trading partner among the countries of the Middle East and Central Asia, accounting for more than half of all trade with these countries. This shows the importance of Turkey for the Ukrainian economy,” the founder of Experts Club added.
According to Urakin, a balanced foreign economic policy in the region can not only significantly improve Ukraine’s relations with Middle Eastern countries, but also have a positive impact on the overall state of the economy.
The results of the study are available here.
ACTIVE GROUP, ALEXANDER POZNIY, ANDREY EREMENKO, CENTRAL_ASIA, ECONOMICS, EXPERTS CLUB, MAXIM URAKIN, MIDDLE_EAST, POLL, SOCIOLOGY
The international rating agency S&P Global Ratings has upgraded Turkey’s long-term foreign and local currency ratings to “B+” from “B”.
The ratings outlook is “positive,” according to a press release from S&P.
“We expect that following the municipal elections held in the country, the Turkish authorities will continue to fight inflation aggressively through tightening monetary policy and gradual fiscal consolidation,” the agency’s experts say.
S&P predicts a decline in Turkey’s current account deficit over the next two years, along with weakening inflation and slowing dollarization of the economy. At the same time, the agency’s analysts believe that the country’s inflation rate will remain double-digit until early 2028.
The Central Bank of Turkey is likely to keep the key interest rate at the current level of 50% until the end of 2024, according to S&P.
“We could upgrade Turkey’s rating again if the country’s balance of payments continues to improve, inflation slows, and domestic savings in Turkish lira increase, allowing the country to rebuild its foreign exchange reserves,” the agency said in a press release.
S&P may change the outlook on Turkey’s ratings to stable if pressure on the country’s financial stability or state budget increases, for example, if the lira’s depreciation fails to stop, or if the authorities abandon inflation control measures.
Earlier, Experts Club and Maksim Urakin released a detailed video analysis of how economic and political life is developing in Turkey, more detailed video analysis is available here – https://youtu.be/SUqOMFI5HbI?si=uEIZZOORj65VElUQ
You can subscribe to the Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
