Aurelia Butler

“We maintain our view that Euro area growth will be weak over the winter months given the energy crisis but no longer look for a technical recession,” Goldman Sachs (NYSE:GS) economists led by Sven Jari Stehn said in a note.The Wall Street bank had in November forecast a 0.1% contraction for the region. A technical recession is typically defined as two consecutive quarters of contraction in gross domestic product (GDP).Euro zone inflation is expected to be around 3.25% at the end of 2023 compared with 4.50% forecast earlier, the economists said.In December, consumer price growth across euro zone slowed to 9.2% from 10.1% a month earlier, Eurostat data showed last week.Core inflation for the region is also seen slowing to 3.3% by the year-end as goods prices cool, but continued upward pressure is expected on services inflation due to rising labour costs, Goldman said.Given the “sticky” nature of inflation, Goldman expects the European Central Bank to remain hawkish and deliver 50 basis points hikes in February and March before slowing to 25 bps for a terminal rate of 3.25% in May.For the UK, Goldman sees a smaller contraction of 0.7% in GDP, compared with an earlier expectation for it to shrink by 1%, helped by lower wholesale gas prices.As the UK labour market remains overheated, the U.S. bank sees another 100 bps worth of hikes by the Bank of England. More

The website was hit by a so-called distributed denials of service (DDoS), which directs a firehose of traffic towards targeted servers in a bid to knock them offline.The attack ended on Tuesday and did not impact the bank’s other systems or day-to-day operations, a spokesman said. More

Since the lifting of COVID restrictions, the Greek economy has recovered strongly thanks to robust tourism revenues and improving consumer spending and investments, the Organisation for Economic Cooperation and Development said in a report on Tuesday.However, surging energy costs, supply disruptions and renewed uncertainty, mainly from the war in Ukraine, are sharply slowing the recovery, it said.”The war is directly affecting Greece’s energy supply and costs. Its indirect effects are compressing spending and delaying investment and hiring,” OECD said.Inflation, driven by rising energy prices, hit a 30-year high of 12% last summer and is eating away at households’ income.The OECD said funding pouring into the country from the EU’s Recovery and Resilience scheme and government support for energy consumers were mitigating the shocks and will help economic recovery resume “once (the) security situation and energy prices stabilise.” Greece, which spent about 10 billion euros ($10.73 billion)in power and fuel subsidies to help households and businesses last year, is expected to receive about 31 billion euros in loans and subsidies from Europe’s recovery fund by 2026 to make its economy more digitalised and greener.”The government’s energy support measures have delayed the return of the primary budget surplus to its medium-term target of 1.5% to 2% of GDP, weighing on Greece quickly achieving an investment grade rating,” the OECD said.In joint statements with Greek Prime Minister Kyriakos Mitsotakis in Athens, OECD’s Secretary General Mathias Cormann praised Greek reforms but said the country should keep reducing its high debt as a top priority. At 175% of GDP at the end of 2022, public debt “is still very high,” he said, adding that Greece should sustain investment momentum and fiscal credibility to improve its debt dynamics.”Greece must continue to pursue reductions in public debt ratios, while promoting a dynamic economy,” OECD Secretary General Mathias Cormann said.Greece, which has emerged from a 10-year financial crisis, is seen achieving a small primary surplus next year, for the first time after three years of deficits.That and the reduction of the country’s debt – euro zone’s highest – is expected to help the country regain an investment grade rating after more than a decade in the junk category, which would expand investment and financing.Cormann also unveiled OECD’ plan to set up a population center on the island of Crete which would help expand the organisation’s cross-country work, data and analysis on the relationship between population, migration and economic challenges. ($1 = 0.9320 euros) More

Before Russia launched its invasion on Feb. 24 last year, it had targeted a state budget surplus of 1% of GDP for 2022. As recently as September, President Vladimir Putin was predicting a surplus of close to half a trillion roubles.Siluanov said the deficit had come in at 3.3 trillion roubles ($47.45 billion).Russia has been forced to draw on its rainy day fund and borrow heavily at domestic debt auctions in recent months as it diverts more funds towards security and defence.Siluanov also acknowledged late last month that a Western price cap on Russian oil could widen the budget deficit in 2023.($1 = 69.5500 roubles) More

Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the premium German car brands signalled supply chain problems that have plagued the industry were easing.Carmakers around the world have been struggling with a lack of parts since the pandemic, particularly semiconductors, leaving many with large fleets of unfinished vehicles that cannot be delivered to customers.Both BMW and Mercedes said full-year car deliveries slid last year by 4.8 per cent and 1 per cent, respectively, because of supply chain bottlenecks as well as lockdowns in China and the war in Ukraine. But supply pressures eased in the final quarter of the year, with BMW reporting a 10.6 per cent jump in sales, with 651,798 cars delivered, and Mercedes fulfilling 540,800 orders, up 17 per cent on the same period in 2022.BMW said the main effects of supply chain bottlenecks and lingering lockdowns were felt in the first six months of the year, adding that “sales increasingly picked up in the second half”.Mercedes boss Ola Källenius told the Financial Times last week that the list of issues in the automotive supply chain was falling, but added that long waiting times for cars would persist in 2023.“It is enough that one single chip that is vital [ . . .] is missing, and then you can’t finish the car, even if you have everything else,” he said.Both car brands recorded strong growth in sales of electric vehicles. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV deliveries grew 124 per cent to 117,800 last year compared with the one before. BMW similarly reported strong growth in EV sales, with deliveries of fully electric cars last year doubling to 215,755. Analysts at Bank of America said EV sales, including hybrids, hit a historic peak last November, with 1.1mn units sold. They attributed this largely to an upcoming phaseout of customer subsidies in Germany. Shares in Mercedes and BMW were flat on Tuesday morning as investors priced in the improving supply picture. Rolls-Royce, a subsidiary of BMW, announced on Monday that sales had hit a 119-year record, driven by strong demand in the US, its biggest market. The luxury brand has largely been unaffected by the semiconductor squeeze, mainly because it makes relatively few vehicles and therefore needs fewer chips. More