Unexpected decrease in German GDP
Reuters report that the German economy unexpectedly shrank in the fourth quarter, data showed on Monday, a sign that Europe’s largest economy may be entering a much-predicted recession, though likely a shallower one than originally feared. Gross domestic product decreased 0.2% quarter on quarter in adjusted terms, the federal statistics office said.
A Reuters poll of analysts had forecast the economy would stagnate. In the previous quarter, the German economy grew by an upwardly revised 0.5% versus the previous three months’ recession – commonly defined as two successive quarters of contraction – has become more likely, as many experts predict the economy will shrink in the first quarter of 2023 as well.
“The winter months are turning out to be difficult – although not quite as difficult as originally expected,” said VP Bank chief economist Thomas Gitzel.”The severe crash of the German economy remains absent, but a slight recession is still on the cards. The government has said the economic situation should improve from spring onwards, and last week revised up its GDP forecast for 2023 – predicting growth of 0.2%, up from an autumn forecast of a 0.4% decline.
EU inflation to hit double-digits
As far as the European Central Bank goes, interest rate expectations are unlikely to be affected by Monday’s GDP figures as inflationary pressures remain high, said Helaba bank economist Ralf Umlauf. The ECB has all but committed to raising its key rate by half a percentage point this week to 2.5% to curb inflation.
Monday’s figures showed falling private consumption was the primary reason for the decrease in fourth-quarter GDP. “Consumers are not immune to an erosion of their purchasing power due to record high inflation”, said Commerzbank chief economist Joerg Kraemer. Inflation, driven mainly by high energy prices, eased for a second month in a row in December, with EU-harmonized consumer prices rising 9.6% on the year. However, analysts polled by Reuters predict annual EU-harmonized inflation will enter the double digits again in January with a slight rise, to 10.0%. The office will publish the preliminary inflation rate for January on Tuesday.
COVID-19 in Madeira: updates can be found in an earlier post
All the incidental news from Madeira – up to 60 reports per day – is being picked up automatically, translated, and posted on our sister website, madeiraislandnews, no matter how trivial:
The UK is doing no better – forecast to be the worst performing large economy according to the IMF this morning – even worse than Russia
According to the Bank of England the UK will only have a short recession:–
https://www.bbc.co.uk/news/business-64487179
UK is up shit creek and It won’t be too long now Germany and the rest of the EU will jump on the bandwagon
The UK may be up shit creek BUT it does have a paddle. We’ve been there before and recovered and will again.
Well the forecast of the IMF wasn’t any good to the UK or their economy this will be leading to the pound get even lower and this isn’t any good news to the expats that live around the EU when doing exchange money will be a disgrace . And I did taught that even with the recent news of the EU and UK set to strike Northern Ireland Brexit deal was improve the pound but not . The main problem in UK they have the Tory party that the people should get rid of the lot that are incapable of ruining the country in any shape or form they are all a band of complete idiots .
Yes, get rid of the Tories and put in a Labour government that leans heavily towards Marxism and in a few years the UK will be like Venezuela. Raging inflation in the hundreds or thousands of percent, a bankrupt government that just keeps printing money, people emigrating to get away from it and old people like me left behind living in abject poverty.
A Daily Mail reader eh?
Uncalled for Maurice. He’s entitled to his opinion.
It’s ok Ken I was just having a laugh and Maurice picked up on that.
I’m fed up with my choice of a Party that last time they were in left note saying the money’s all been spent, believes people can change sex and responsibilities by filling in a form and whose leader campaigned for and was in Corbyn’s Cabinet. My other choice is a Party who have no unity, whose lay members not only chose the chancer Johnson but are still rumored to want him back, and a PM who hasn’t the nous to say to his Cabinet Secretary before appointing them Minister, “Is there anything dodgy I ought know about this lot.”
We laughed at the USA when they had the choice of Trump or Clinton.
And Madeira thinks it has problems.
Get a grip. Labour has been in power many times and the UK never became Venezuela. You’ve been scammed into this extremist view of the politics of your own country, and the quicker you snap out of it, the quicker the discourse can return to pragmatism. You are responsible for your share of upholding an adult approach to politics in our country.
After 13 years of of corrupt inept mendacious Liebour & 13 years of corrupt inept mendacious Clownservatives, did my life get any better…No.The rich got richer & the workers paid the taxes the rich didn’t…?
Well people can buried their heds in the sand but for expats like my husband and like many others that need to exchange this pound situation is a complete disgrace despite what people think the recent IMF report and recession and the other news didn’t do help good the pound at all and gone down even more. I still continue to think that this Tory party are ruining the country to the grownd that the people should get rid of the lot .