Germany is facing a severe recession with an immediate action plan. However, analysts see little chance of a quick recovery.

It is important to highlight that it is the only country on the continent to have faced this situation for two years. In fact, according to reports, last year “more companies closed than in any other year since 2011, during the great financial and economic crisis. The hardest hit sectors continue to be those with high energy consumption, due to high electricity prices.”

This reality is also affected by a shortage of workers and qualified personnel, an aging society, high costs as a result of excessive bureaucracy, among other factors.

The new German government’s promise to improve the situation quickly and sustainably does not seem feasible. In its spring report, the “Council of Economic Experts” speaks of a phase of marked weakness and virtually rules out a short-term recovery.

The council’s five economists predict stagnation for the remainder of this year, with growth at zero. “In 2026, the economy could recover slightly with 1 % growth. But from the experts’ point of view, it is by no means guaranteed that Germany will return, in the medium or long term, to the path of economic success.”

The councilors believe the old German economic model must give way to a more realistic one, in line with current and future challenges. According to Monika Schnitzer, chairwoman of the Council of Experts, it is necessary to promote the transition to new business models and professions, as well as increased production and the implementation of digitalization to reduce bureaucracy.

At the same time, and to address Donald Trump’s tariffs, Economy Minister Katherina Reiche announced measures to be implemented by mid-July, such as “the reduction of the electricity tax and initial reforms to the labor market,” according to the policy of the conservative Christian Democratic Union (CDU) at an economic forum.

M.Pino

Source: DW

(Reference image source: Jakub Żerdzicki en Unsplash)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on X/Twitter and Instagram

La entrada Germany launches plan to confront recession apareció primero en Bitfinance.

The German economy experienced its second consecutive year of economic recession in 2024, marked mainly by the crisis of the industrial sector and the export model.

A few weeks before the legislative elections, scheduled for February 23, the European country is stagnating, with a contraction of the Gross Domestic Product (GDP) of 0.2% in 2024, according to estimates published on Wednesday, January 15, by the Destatis institute.

In 2023, Germany’s GDP had already contracted by 0.3 % and in the last quarter of 2024, the indicator was 0.1% compared to the previous quarter. Although the International Monetary Fund’s estimates are slightly positive, the Destatis institute has reflected that “German exports, a historical pillar of the country’s economic success, fell despite the global increase in world trade in 2024.”

Ruth Brand, president of the organization, said in a press conference that last year Germany faced strong cyclical and structural pressures, with “greater competition for the German export industry in key markets, high energy costs, interest rates that remain high, and an uncertain economic outlook.”

The crisis affects the automotive, investment and services sectors, so analysts do not foresee a quick recovery in 2025, which could become the third consecutive year of recession.

M.Pino

Source: swissinfo

(Reference image source: Rasmus Gundorff Sæderup on Unsplash)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on X/Twitter and Instagram

La entrada German economy enters a possible third year of recession apareció primero en Bitfinance.

Bitcoin, the main cryptocurrency on the market, suffered a drop in price close to 10 % this Monday, August 5, setting off alarms and causing the index of crypto fear and greed to accelerate.

The price of bitcoin began the current week below $53,000, “in a context of increasing geopolitical tension and fear of an economic recession in the United States.”

On the other hand, the price of ether also plummeted by 18 %, going from $2,695 to $2,118 in the same period of time, although it experienced a slight recovery to settle at $2,358, according to TradingView.

With this rapid drop in cryptocurrency prices, the total market capitalization dropped to $500 billion in the last three days. Sector analysts attribute this scenario to “the weakness of employment data in the United States, the slowdown in growth of the main technology companies in the stock market and the massive sales of the crypto asset company Jump Crypto in recent days.”

Expectations, despite this adverse environment, are that cryptocurrencies could soon hit bottom to experience a rebound in the short term.

M.Pino

Source: hispanopost

(Reference image source: Unsplash+, in collaboration with Getty Images)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada Bitcoin value fell below $53,000 apareció primero en Bitfinance.

The United States Treasury Secretary, Janet Yellen, indicated this Sunday in India during her meeting with the G20, that the country’s economy is showing a good change, so she does not believe that they will enter a recession.

Speaking to Bloomberg TV, Yellen said the slowdown in inflation is on the right track, adding: “For the United States, growth has slowed, but our job market is still pretty strong. I don’t expect a recession.”

Taking into account the most recent inflation data, the official considers that the scenario is encouraging, beyond China’s concern regarding US tariffs last month on his visit to the US.

Yellen hinted that the United States could issue a new decree “restricting outbound investment in China, but stressed that the measures would focus strictly on three sectors: semiconductors, quantum computing and artificial intelligence.”

What is sought is greater control, through strict notification procedures, but not blanket controls that hinder US investment in China.

M.Pino

Source: finanzasdigital

(Reference image source: Aditya Vyas, Unsplash)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada Yellen does not believe there is a recession in the United States apareció primero en Bitfinance.

The UK economy, the second largest in Europe, will avoid going into recession this year, according to new forecasts from the International Monetary Fund (IMF), which now anticipates a GDP expansion of 0.4 %, compared to a contraction of 0..3 % previously projected.

“Built by resilient demand in the context of falling energy prices, the UK economy is expected to avoid a recession and maintain positive growth in 2023,” the IMF experts concluded at the end of their mission in the country to prepare the annual report Article IV.

In this way, the IMF technicians predict that growth will slow down to 0.4 % in 2023, slowed down by the stricter monetary and fiscal policies necessary to curb inflation, which means improving by seven tenths the previous forecast that anticipated a contraction of 0.3 %.

In this regard, they point out that the change in forecasts reflects greater-than-expected resilience both in demand, including higher wages to keep up with inflation, a less contractionary fiscal stance in 2023 and greater confidence, as well as in supply due to lower energy costs and the normalization of global supply chains.

Looking ahead to 2024, the IMF projects growth in the UK economy to gradually increase as disinflation softens the impact on real incomes, with an expansion of 1 % in 2024 and average growth of around 2 % in 2025 and 2026, mainly due to a projected relaxation in monetary and financial conditions.

K. Tovar

Source: Swissinfo

(Reference image source: Rodrigo Santos, Unsplash)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada The UK will no longer fall into recession this year apareció primero en Bitfinance.

The United States economy closed the year 2022 with a growth of 2.1 %, sustained mainly by the consumption of the population, despite the lower purchasing power in a context of inflation. However, now the question is whether or not the world’s greatest power will enter a recession in 2023.

According to official data published on Tuesday, the Gross Domestic Product (GDP) expanded by 2.1% in 2022 compared to 2021. In 2021, the country had the largest annual economic expansion since 1984: 5.9 %, largely due to as the base of comparison was the year 2020, when the pandemic caused the largest retraction of GDP since 1946 (-3.5 %) and two months of recession.

In the fourth quarter of last year, the US economy grew by 2.9 % in annual projection, the measure used in the United States that projects 12-month growth based on conditions prevailing at the time of measurement. However, if quarter-over-quarter growth is compared, the expansion would be only 0.7 %.

Despite the fact that GDP performed better than expected, some experts believe that two quarters of GDP declines are enough to call for a recession. However, many economists and the government also consider the strength of the labor market and other factors, pointing out that there was no recession in the United States last year.

In any case, the future of the US economy will remain a hot topic as the new year approaches, with rising inflation and an uncertain job market due to the pandemic. It is important to closely monitor this data so that you can predict the future of the US economy and take the necessary steps to deal with any economic challenges that may arise.

Source: dpa

(Reference image source: file)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada US economy closed 2022 with growth apareció primero en Bitfinance.

The massive job cuts among the big US technology companies have gained new intensity in the last week, after the announcement of thousands of layoffs by Microsoft and Google, and the communication of the departure of thousands of workers from Amazon, in response to the weakening of activity after the hiring ‘boom’ driven by the pandemic.

In this way, Alphabet, the parent company of Google, has been the last of the big technology companies to announce a massive workforce adjustment by announcing this Friday that it will cut around 12,000 jobs worldwide, a figure close to 6 % of the total. , to address weakening economic conditions.

“We have decided to reduce our workforce by approximately 12,000 positions”, confirmed the CEO of the company, Sundar Pichai, who explained that in the last two years the multinational had undertaken a hiring policy “to match and feed” the spectacular growth experienced in that period. “We hire for a different economic reality than the one we face today,” he acknowledged.

Previously, last Wednesday, it was Microsoft that announced that it will undertake a series of measures in response to macroeconomic conditions, including cutting some 10,000 jobs, slightly less than 5% of its workforce, assuming an extraordinary adverse impact of 1,200 million dollars (1,109 million euros) in its accounts for the second fiscal quarter, which it will announce on January 24.

That same day, according to the US press, the electronic commerce giant Amazon began notifying its departure to the workers affected by a new round of layoffs, which added to the adjustment at the end of last year, will reach 18,000 jobs.

Tech companies suffer as they seek to reduce costs with layoffs

The latest workforce cuts among US technology companies reflect the cooling of the sector, after years of record activity as a result of the boost derived from the containment measures of the Covid-19 and the new consumption habits, in addition to the impact of the evolution of prices and costs.

In this way, in the last stretch of last year several companies in the sector had already announced massive layoffs, such as Meta, owner of Facebook, Whatsapp and Instagram, which reported a cut of 11,000 jobs last November, around 13 % of your overall workforce.

Likewise, other multinationals had reported the departure of thousands of workers, including Salesforce, with some 7,000 workers, around 10 % of its workforce; Twitter, around 3,700 jobs; Stripe, about 1,100 workers; Shopify and Snap, around a thousand each; the broker Robinhood, another 1,100 jobs.

Cryptocurrency sector also makes layoffs

On his side, in addition to the crisis in the technology sector, the so-called ‘crypto winter’ as a result of the default of the Three Arrows fund and the bankruptcy of the FTX platform has triggered a domino effect with the declaration of suspension of payments of several entities linked to the crypto assets, as well as blocking withdrawals and layoffs.

In this sense, firms such as Crypto.com have communicated the suspension of half a thousand jobs, while the Coinbase platform will eliminate 950 jobs, after eliminating another 900 last summer.

In turn, Silvergate Capital will carry out a workforce adjustment that will affect 40 % of its employees, which will mean the departure of some 200 people after suffering a massive outflow of deposits in the fourth quarter of 2022.

Source: dpa

(Reference image source: dpa / Europa Press)

Visit our news channel on Google News and follow us to get accurate, interesting information and stay up to date with everything. You can also see our daily content on Twitter and Instagram

La entrada Massive layoffs among US tech giants continue apareció primero en Bitfinance.

The Latin American and Caribbean regions are the most susceptible to a possible recession in the US economy, according to the report ‘The vulnerabilities of Latin America and the Caribbean in the face of a US recession.’ published by Fitch Ratings.

Among the reasons, the credit rating company points to the geographical proximity of both regions and the various transmission channels, which links them enormously to the economic cycles and policy decisions of the United States, whose economy could enter a recession from of the second quarter of 2023, according to the latest report from Fitch Ratings.

Specifically, the main transmission channels to Latin America and the Caribbean are trade, remittances, tourism and commodity prices. “The South American economies have limited trade links with the US, but are indirectly affected through the impact on world trade and commodity prices,” they explained from the rating agency.

However, within these regions, the different economic characteristics of the countries mean that the impact can “vary considerably”. Thus, for example, the lower foreign demand from the US mainly affects Mexico due to its dependence on exports, as it represents one of Washington’s three main trading partners. In this regard, it should be remembered that a large part of Central American exports are demanded by the US, although these countries tend to have a more diverse export market base.

Risk in remittances

Weakening US household income and employment could jeopardize migrants’ ability to send remittances home and discourage tourism. Remittances account for more than 20 % of the GDP of some Central American countries, making the Caribbean and Central American economies vulnerable to a “sudden stop” in tourist arrivals.

In addition to the recession in the United States, there are challenges for frontier markets, since more expensive external financing could complicate policy options, and for the more developed economies of the region if their current account deficits are large.

Finally, when it comes to credit ratings for Latin America and the Caribbean, Fitch Ratings expects “limited pressure.” Any impact on the ratings will ultimately depend on the magnitude of the US economic shock and the ability of each country to absorb it.

Click the link to subscribe for free to our news and media group on Telegram: https://t.me/G_ELSUMARIO_News

Source: dpa

La entrada Latin America and the Caribbean, the regions most exposed to a recession in the United States apareció primero en Bitfinance.

The German economy is headed for a prolonged economic recession until next year and inflation will remain at double-digit levels, the Bundesbank forecast in its monthly report released today.

“There are growing signs of a recession in the German economy, in the sense of a significant, widespread and prolonged decline in economic output,” the central bank said.

The main reason is the disruption of energy supply as a result of Russia’s war in Ukraine, he said. “High inflation and uncertainty about energy supply and its costs are affecting not only the gas and electricity-intensive industry and its export and investment businesses, but also private consumption and the service providers that depend on it,” explained the Bundesbank economists.

Bundesbank predicts decline in economic output

According to the analysis, the decline is expected to start in the current third quarter and economic output is likely to decline markedly in the last three months of 2022. “This should apply to the first quarter of next year as well,” it added.

In the second quarter, Europe’s largest economy still had a slight growth of 0.1 percent compared to the previous quarter, according to data from the Federal Statistical Office.

Since then, prospects have dimmed a lot due to the gas crisis. “Now that Russian gas deliveries to Germany have been largely interrupted, the gas supply situation is extremely tense in the coming months,” the monthly report states.

Economic research institutes such as the Ifo or the Kiel Institute for World Economy (IfW) also recently forecast a recession in Germany.

Double-digit inflation will remain according to the Bundesbank

According to the German central bank, citizens will have to prepare for double-digit inflation rates in the coming months. The measures announced in the latest government aid package for citizens will probably not be reflected in consumer prices until early next year, it said.

The increases in energy prices as a result of the war in Ukraine and the increase in food prices have increased the rate of inflation for months. The reduction in fuel prices and the reduced public transport ticket of 9 euros ($8.99), limited until the end of August, temporarily caused a slight slowdown in price increases.

However, recently inflation again approached the eight percent mark. In August, consumer prices rose 7.9 % compared to the same month a year earlier.

Click the link to subscribe for free to our news and media group on Telegram: https://t.me/G_ELSUMARIO_News

Source: dpa

La entrada The Bundesbank forecasts a recession and double-digit inflation in Germany apareció primero en Bitfinance.

The economy of the Eurozone is facing a slowdown after the strong rebound in growth experienced, which could even become a “moderate recession”, but far from a crisis scenario like that of 2008, according to the chief economist of the European Central Bank (ECB), the Irish Philip Lane.

“All the analyzes point to a slowdown in the economy”, Lane acknowledged during an interview with RTVE, where he stressed that if “a few weeks of recession were to be recorded, that should not be too dramatized”, since, in his opinion, what is not expected “are circumstances like those of 2008”.

In this way, Lane recalled that, compared to the situation during the pandemic two years ago, the eurozone has had a very significant recovery, so a slowdown in the economy now “is different from entering a phase of pessimism.”

In this sense, the Irish economist has argued that, unlike what happened during the crisis that led to the Great Recession, the banking system in the Eurozone in general “is in good shape”, something that has spread to households and companies, much less indebted than then.

“We do not see the ingredients for a long recession. The framework will be more of a slowdown, which may imply a moderate recession,” he added, noting that he expects a stabilization of the economy with normal growth rates.

Eurozone faces economic slowdown

Likewise, Lane explained that this slowdown in the rate of expansion of the Eurozone after the strong rebound experienced as restrictions were lifted due to the pandemic will in turn serve to curb inflationary pressures, which will continue to be fueled, on the contrary, by the uncertainty related to the war in Ukraine and the escalation of energy prices.

“The price of gas has continued to rise and this has a significant impact. On the other hand, we anticipate that in the second half of the year there will be a certain reduction in the level of demand, since the slowdown helps reduce inflationary pressures,” he said.

In this way, as he pointed out this Monday during a conference in Barcelona, ​​Lane has defended the importance of the central bank having a strategy for normalizing interest rates over time. “Step by step and not all at once, so that families, companies and the financial system can adjust”, he pointed out.

In his speech, the chief economist of the ECB announced that the next September meeting of the Governing Council of the institution “will be the beginning of a new stage” in the normalization of monetary policy in the Eurozone with a “step by step” approach “in setting interest rates.

In this sense, the Irish economist defended the importance of “a constant pace, which is neither too slow nor too fast”, in the normalization of monetary policy.

In particular, it considered it less likely that the same cumulative rate hike would generate more adverse effects on price stability if implemented in the form of “a multi-step calibrated series rather than a smaller number of larger rate increases.”

Likewise, Lane pointed out that a multi-step adjustment path to the terminal interest rate also makes it easier to make mid-course corrections if circumstances change.

Click the link to subscribe for free to our news and media group on Telegram: https://t.me/G_ELSUMARIO_News

Source: dpa

La entrada Eurozone faces a moderate recession apareció primero en Bitfinance.