Next year, China will ease monetary policy to stimulate its economy. The measure has the support of President Xi Jinping.

Currently, the Asian country, the second-largest economy in the world, is struggling to contain the slowdown in the sector, which could be accentuated by Donald Trump’s threats to raise tariffs on Chinese exports upon his return to the White House.

The 24 members of the Political Bureau of the Central Committee of the Communist Party held a meeting on Monday, December 9, to “analyze and study future economic measures in 2025.”

The goal is to “strongly stimulate consumption, improve investment efficiency and broadly expand domestic demand” by 2025, through a more proactive fiscal policy and appropriate monetary policy easing.”

With this change of attitude, the Chinese government recognizes the challenges that the country is currently facing, in the midst of a struggle to “avoid the spectre of deflation, triggered by a severe real estate crisis and consumption levels well below those seen before the pandemic.”

Some measures are already being implemented, such as a reduction in interest rates along with an increase in the debt ceiling for local governments.

M.Pino

Source: cactus24

(Reference image source: Ling Tang on Unsplash)

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The Central Bank of Venezuela (BCV) revealed that the country’s cumulative inflation at the end of 2023 was 189.8%. This figure shows a significant decrease of 44.2 points compared to 2022, when inflation reached 234%.

During the month of December, the inflation rate stood at 2.4%, marking the third consecutive month of slowdown in the rise of the prices of goods and services. This downward trend is evidenced by the reported inflation of 3.5% in November and 5.9% in October, according to official data.

The education sector experienced the largest price increase in December, with an increase of 7.2%, followed closely by transport, with an increase of 4.6%; household equipment, with 3.5%; and health, with an increase of 3.3%.

The BCV report highlights that inflation in Venezuela began the year 2023 with an increase of 42.1% in January, followed by 19.3% in February. However, the next ten months of the year showed single-digit inflation rates, with the highest of 8.7% recorded in September.

K. Tovar

Source: UniónRadio

(Reference image source: x, @VTVcanal8)

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At an event organized by JP Morgan Asset Management, Lucía Gutiérrez-Mellado, the firm’s director of strategy, announced a slowdown in economic growth. However, she stressed that recession has been avoided, and the strength of this slowdown will depend largely on developments in the labor market.

Gutiérrez-Mellado noted signs of weakening in the U.S. labor market, noting that this year has been a surprise, with unexpectedly robust growth in the first half, driven by savings and tax aid that now has limited room to continue supporting the economy. According to her, the future of the American economy will be linked to the labor market.

As for Europe, the director of JP Morgan AM predicted a less pronounced slowdown, in part due to the surprising resilience of the United States.

Gutiérrez-Mellado also highlighted the leadership of raw materials in the last quarter, especially the price of oil, which is influenced by events in the Middle East.

As far as China is concerned, she anticipated that macroeconomic data will reach a nadir before the end of the year and some recovery in economic growth is expected as the Chinese government implements monetary policy measures.

Consequently, Gutiérrez-Mellado emphasized that she will maintain a neutral position in the manager’s portfolios, given the perspective of a low growth environment and a restrictive monetary policy. Furthermore, they will remain neutral in fixed income compared to equities.

Regarding inflation, Gutiérrez-Mellado expressed that, despite some increases in interest rates, they believe that the end of interest rate increases by central banks is near, with the possibility of an additional rise in the United States at best and the conclusion in Europe.

To conclude, she highlighted that the economic scenario is more positive compared to a few months ago, with moderate economic growth and a restrictive monetary policy. Additionally, she announced that the JP Morgan AM markets guide, which used to be updated quarterly, will now be updated daily in Europe, following the same practice as in the United States.

K. Tovar

Source: Descifrado

(Referential image source: Mathieu Stern, Unsplash)

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Wage growth in the coming quarters will be “very strong” compared to historical patterns in the eurozone, according to economists from the European Central Bank (ECB) in an article in the latest bulletin of the institution. In the document, they also point out the “substantial” loss of purchasing power of consumers due to the impact of inflation and that it will continue to fall in the future, thus encouraging demands for wage increases by unions.

They believe that the upward pressures on wages reflect robust labor markets, which have so far not been greatly affected by the economic slowdown, as well as increases in national minimum wages and some wage recovery from high rates of inflation.

However, they point out that, beyond the short term, the economic slowdown expected for the eurozone and uncertainty about the economic outlook for the region are likely to “put downward pressure on wage growth.”

At its meeting last December, the Governing Council of the ECB decided to raise its three key interest rates by 50 basis points, so that the reference rate for its refinancing operations stood at 2.50 %, while the deposit rate reached 2 % and the loan facility rate 2.75 %.

Likewise, the president of the ECB, Christine Lagarde, warned that based on the available data, rate hikes should be expected “at a rate of 50 basis points over a period of time”, because inflation remains too high and is expected to remain above the 2 % target.

Source: dpa

(Reference image source: Ibrahim Boran, via Unsplash)

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The expected projections for the world economy in 2023 from JO Morgan Chase & Co. have been published. The main news points to a stabilization of the markets despite the slowdown in economic growth.

US bank analysts estimate a decline in inflation in view of a necessary and forced containment in the increase in interest rates by central banks.

JP Morgan forecasts a positive year in the stocks and bonds arena. “Precisely because markets are so battered, lower equity valuations and higher bond yields, in our view, mean that investors now enjoy the most attractive entry point for a traditional portfolio in more than a decade.”

They estimate a high potential for protection, yield and capital appreciation thanks to basic fixed income.

As for the employment sector, analysts predict that it will be marked by an increase in the demand of workforce, which will impact unemployment.

“More companies are likely to freeze hiring or lay off workers to cut costs,” the document says.

M.Pino

Source: finanzasdigital

(Photo: venturebeat.com, via web)

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