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949 (51-60)
June 10, 2021
Region:
Q2 GDP should be o.k., despite April’s little stumble. Strong external demand and depleted finished goods inventories suggest a strong bounce back once current supply constraints ease. Consumers’ economic outlook and income expectations are improving. Together with an expected normalization of the savings rate that should provide a strong underpinning for consumption growth. We stick to our Q2 GDP forecast of close to 2% qoq and 4% for the whole year. The rate of inflation has been rising sharply since the start of 2021. With price dynamics continuing to outstrip expectations and given the prospect of stronger economic recovery in the summer, we now expect the annual average CPI inflation rate to rise to 2.8% in 2021, monthly numbers could even touch 4%. [more]
June 7, 2021
This paper examines the potential for higher inflation and a return of boom/bust cycles over the next few years.
The report notes the very role of government in the economy is undergoing its biggest shift in 40 years manifested in the receding fear of inflation and rising levels of government debt that shaped a generation of policymakers. Replacing it is the perspective that economic policy should now prioritise broader social goals.
At its heart the research report debates whether inflation is transitory or the pursuit of these important social priorities by governments will mean inflation will have longer-term and far reaching implications for the health of the global economy. Either way, higher inflation is coming and policymakers are about to face their toughest battle in 40 years. [more]
June 4, 2021
Region:
The third COVID-19 wave in Germany is ebbing. The number of ICU patients – one of the key parameters of the pandemic – peaked at the end of April, at above 5,100 cases. At the end of May the number was below 2,500. If the trend continues due to vaccinations and warm weather, the number of ICU patients will fall below 1,000 in mid-June. [more]
June 2, 2021
Region:
Next Sunday’s regional election in the small eastern German state Saxony-Anhalt is the last electoral test in the run-up to the federal election in September. Polls suggest that the CDU will remain the strongest political force, despite being challenged by the right-wing AfD. Even a narrow win would be a positive for the CDU’s federal campaign. Whereas an AfD victory would be a (non-lethal) blow for Laschet’s election campaign. The federal election campaign is just heating up. The electorate seems a little disenchanted with Greens and their chancellor candidate, allowing the Conservatives to regain the lead in the neck-and-neck race in the polls. Still, the two parties are polling too close to speak of a turning point (yet). [more]
May 28, 2021
Region:
The recovery was quick and resounding. The banking sector in Europe has shaken off the impact of the pandemic and in many ways it looks like nothing happened in the past two years at all. In Q1 2021, profitability, costs, efficiency levels, several capital and liquidity indicators were all similar to Q1 2019. Nevertheless, the crisis has left its imprint: balance sheets are far larger, revenues and loan loss provisions are substantially higher, as is the CET1 ratio. Hence, there is still room for further normalisation. [more]
May 11, 2021
Region:
Analyst:
The Federal Constitutional Court's "climate change order" has the potential to trigger considerable political and social disruption. The greenhouse gas emission reduction targets set by policymakers will have implications for our everyday lives. Political and social resistance appears inevitable. We need better climate technologies. Better technology is key if we want to keep climate-related restrictions to individual freedom as well as political and social tensions as low as possible, both now and in the future. Perhaps we should regard the Court order as a call for much higher investments in research and development. [more]
22.2.0