Latest news with #FranziskaPalmas
RTÉ News
30-06-2025
- Business
- RTÉ News
German inflation eases to 2% in June, defying forecasts
German inflation eased in June, preliminary data from the federal statistics office showed today, despite forecasts suggesting a slight increase in price pressures in Europe's largest economy. German inflation fell to 2% year on year. Analysts polledby Reuters had forecast EU-harmonised inflation increasing from the previous month to 2.2%. Germany's core inflation rate, which excludes volatile food and energy prices, eased to 2.7% in June from 2.8% the previous month. The German data comes ahead of the euro zone inflation release tomorrow. Inflation in the bloc is expected at 2% in June, the European Central Bank's goal, up from 1.9% the previous month, according to economists polled by Reuters. Data published on Friday showed that EU-harmonised inflation rose in France and Spain. Inflation was unchanged in Italy, data showed today. Overall, the figures add to the evidence that inflation in the euro zone has sustainably returned to the target, said Franziska Palmas, senior Europe economist at Capital Economics. "Barring a renewed surge in energy prices we expect the headline rate to average 2% this year and the ECB to make one final rate cut in September," Palmas said. The ECB cut interest rates at the beginning of June but hinted at a pause in its year-long easing cycle. "The German figure signals to the ECB that it has done its job," said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe, who forecast the inflation rate in Germany would remain at 2% or even dip lower in the coming months,"right where it is supposed to be." Inflation data show that German energy prices fell by 3.5% in June compared to the previous year. While food prices rose 2%, that marked a significant decline from the 2.8% year-on-year increases recorded in May and April. Services inflation, which has been stubbornly high, fell to 3.3% in June from 3.4% in the previous month. "People may still complain about service prices, but due to the relief from energy prices, their still-high increase is hardly noticeable," said Krueger. Despite the positive developments, Commerzbank's chief economist Joerg Kraemer warned that core inflation could remain higher than targeted "for longer than the ECB intends" due to the emerging economic recovery in Germany. German retail sales in surprise 1.6% drop in May Earlier figures showed that German retail sales unexpectedly fell by 1.6% in May compared with the previous month, dampening hopes for strong growth in the second quarter for Europe's largest economy. Analysts polled by Reuters had predicted a 0.5% increase, after sales declined by 0.6% in April. While there could be some recovery in June, a large and sustained jump in consumption is not expected for the time being, said Hauck Aufhaeuser Lampe economist Alexander Krueger. That could spell problems for economic growth in the second quarter after unexpectedly robust growth in the first, thanks in part to consumer spending. "The strong growth seen in the first quarter will not be repeated," said VP Bank economist Thomas Gitzel. "The German economy will have to scale back its ambitions in the second quarter," he added. Consumer sentiment in Germany dipped to -20.3 points heading into July in the most recent survey conducted by the GfK market research institute and the Nuremberg Institute for Market Decisions (NIM). That survey of around 2,000 people found an increased willingness to save - due to continuing uncertainty - was counteracting positive momentum in income prospects.
Hindustan Times
06-06-2025
- Business
- Hindustan Times
German exports, factory output fall amid tariff turbulence
German exports and factory output went into reverse in April after big jumps the previous month, data showed Friday, with officials blaming the US tariff blitz for the volatility. Exports were down 1.7 percent to 131.1 billion euros compared to March, according to preliminary data from statistics agency Destatis. The drop was driven by a more than 10 percent fall in exports to the United States, with shipments to Germany's top trading partner hitting their lowest level since October 2024. Shipments to China, another key destination for "Made in Germany" goods, also fell heavily, although they increased slightly to other European Union countries. Exports had jumped in March as US companies rushed to stock up on German goods, from pharmaceuticals to factory equipment, before US President Donald Trump unleashed his sweeping "Liberation Day" tariffs at the start of April. German industrial production slid 1.4 percent in April from the previous month, worse than a one-percent decline forecast by analysts surveyed by financial data firm FactSet. The indicator had risen 2.3 percent in March. The pharmaceutical sector suffered a 17.7 percent drop, following a nearly 20 percent rise in March while the crucial machinery and equipment sector saw a 2.4 percent fall, according to Destatis. The fluctuations in industrial production in some sectors were likely "a reflection of trade policy uncertainties resulting from US tariff policies," the economy ministry said in a statement. Franziska Palmas, senior Europe economist from Capital Economics, said Friday's data suggested that "the boost to activity from US tariff front-running is already reversing and that underlying industrial activity remains weak". The German government has slashed its growth forecast for this year to zero due to the potential impact of the tariffs. The European Union has been hit by the wave of US levies on imports, while further tariffs specifically targeting the bloc are on hold while officials from both sides try to reach a deal. sr/jsk/rl
Local Germany
08-05-2025
- Business
- Local Germany
German factory output and exports rise, but US tariffs cloud outlook
Germany's industrial production jumped more than expected in March, while exports also rose, providing a rare boost for Europe's largest economy — even as looming US tariffs raise fresh concerns. Factory output increased by 3.0 percent compared to the previous month, according to preliminary data released on Thursday by federal statistics agency Destatis. This follows a sharp decline in February and exceeds analysts' forecasts of a 0.75 percent rise. The growth was driven by key sectors including automotive and pharmaceuticals. Exports climbed 1.1 percent month-on-month, largely fuelled by higher shipments to the United States ahead of new tariffs introduced in April. That figure was in line with expectations. Tariff fears and economic uncertainty remain Franziska Palmas, senior Europe economist at Capital Economics, said the rise in industrial output pointed to stabilisation in Germany's manufacturing sector in recent months. However, she warned that the March boost was likely due to companies rushing to stockpile goods before the US imposed so-called 'Liberation Day' tariffs. 'And with the hit from US tariffs likely to be felt before long, and any support from the new government still some months away, we think a further improvement is unlikely,' Palmas said. Advertisement Germany's economy has contracted for the past two years due to sluggish manufacturing, weak global demand and elevated energy costs. Economists fear that trade tensions with the United States could tip the country into a third year of recession. Surplus grows despite import drop Exports totalled €133.2 billion ($150.5 billion) in March, Destatis said, while imports dropped by 1.4 percent to €112.1 billion. That left Germany with a trade surplus of €21.1 billion for the month.
Zawya
02-05-2025
- Business
- Zawya
Euro zone yields rise as US-China tensions ease, await US data
Euro zone government bond yields rose on Friday, catching up with U.S. Treasuries, as investors scaled back bets on European Central Bank rate cuts amid signs of potential easing trade tensions between the United States and China. China's Commerce Ministry said Beijing was "evaluating" an offer to hold talks with Washington over U.S. tariffs, signalling a potential de-escalation in the trade war, which has roiled markets. Germany's 10-year yield, the benchmark for the euro zone, rose 2.5 basis points to 2.47%, though it remained near the bottom of its recent range. The Bund yield has been driven by expectations that the ECB will continue cutting interest rates to support the bloc's economy in the face of tariffs, as well as broader flows to safe havens amid global uncertainty. U.S. Treasury yields dropped in London trade - with the 10-year down 2.5 bps at 4.21% - after rising on Thursday following a better-than-expected manufacturing report for April. Continental European markets were shut for a holiday on Thursday. Money markets priced in an ECB deposit rate of 1.65% in December, which implies 60 bps of rate cuts from the current 2.25%, compared with 1.6% the day before. They also fully price in a 25 bps cut in June and two cuts by September. Markets sharply increased bets on the ECB easing after the mid-April meeting, when the bank suggested it was ready to offset the adverse impact of tariffs with rate cuts. They scaled back these bets following signs that potential tariffs could be less severe than feared. Euro zone inflation held steady after national data released this week provided a mixed backdrop: German inflation eased, figures from France showed a higher than expected rise, while Italy recorded an acceleration in core inflation. Germany's policy-rate-sensitive two-year yield rose 6.5 bps to 1.76%. "April's rise in services inflation is unlikely to worry ECB officials too much as it was probably driven mainly by Easter timing effects," said Franziska Palmas, senior European economist at Capital Economics. "We think services inflation will start falling again in the coming months and that U.S. tariffs will prove disinflationary for the euro zone," she said. The main event for global markets on Friday will be the U.S. non-farm payrolls report due at 1330 GMT, the first since early April's tariff announcements. Economists expect job growth to have slowed in April, though companies continued to hoard workers. Analysts flagged that labour market weakness can trigger a swifter reaction by the Federal Reserve. Italy's 10-year yield was up 2.5 bps at 3.59%. (Reporting by Stefano Rebaudo; Editing by Emelia Sithole-Matarise and Tomasz Janowski)
L'Orient-Le Jour
02-05-2025
- Business
- L'Orient-Le Jour
European economy withstands Trump in the first quarter
Europe's economic activity withstood better than expected at the beginning of the year against Donald Trump's sudden announcements on tariffs, but the impact of trade tensions is expected to keep it in near-stagnation this year. The eurozone's gross domestic product (GDP) grew by 0.4% in the first quarter compared to the previous three months, Eurostat announced on Wednesday. Analysts surveyed by Bloomberg had expected an average growth of 0.2% from January to March for the 20 countries sharing the single currency, after a +0.2% increase in the last quarter of 2024. For the entire EU, growth reached 0.3%, after 0.4% from October to December, according to the European statistics office. This solid performance seems linked to early purchases in the United States, before the tariffs came into effect in March and April. But for the whole year, the prospects remain bleak. The EU is in negotiations with the U.S. administration to obtain the lifting of the surtaxes, which currently stand at 25% on cars, aluminum, and steel and 10% on all other products. Europe has been mired for two years in stagnation, hampered notably by rising energy costs following Russia's invasion of Ukraine. And the expected rebound this year appears very limited... On April 22, the International Monetary Fund lowered its growth forecasts for the eurozone by 0.2 points to 0.8% in 2025, after 0.4% in 2024, anticipating the impact of trade tensions. - "Significant slowdown" ahead - "The economy started the year on a stronger footing than expected. Nevertheless, we anticipate a significant slowdown in growth over the next six months, given that the US tariffs introduced in April will affect activity," commented Franziska Palmas for Capital Economics on Wednesday. Many companies sent more goods at the beginning of the year to avoid the additional taxes imposed by Trump. For example, exports from Ireland to the U.S. jumped by 210% in February. These consist of 90% chemical and pharmaceutical products. The good performance of the European economy in the first quarter "is partly due to a 3.2% increase in GDP in Ireland, where the boost from anticipating US tariffs was likely significant," noted Palmas. Among the main economies, Spain once again stood out, with GDP growth of 0.6% compared to the previous quarter. France, hampered by political instability and a planned budgetary austerity measure, dragged down the eurozone with only 0.1% GDP growth from January to March. Germany (+0.2%) and Italy (+0.3%), although below the European average, performed much better than expected. Unlike France, these two countries benefit from a very internationally effective manufacturing sector. Expansion in Europe "was probably supported by the continued monetary easing of the European Central Bank (ECB), as well as the increase in activity from exporters before the implementation of US tariffs," estimates Sam Miley of the Centre for Economics and Business Research (Cebr). The ECB cut its rates on April 17 for the sixth consecutive time, hoping to counter the effect of trade tensions with the U.S. Trump's tariff offensive weighs on the economy, with a "risk of a decrease in exports, investments, and consumption," warned the president of the monetary institution Christine Lagarde, adding that the degraded financial climate could further hinder activity.
