Economy

BERLIN (Reuters) -Germany is able to stick to its self-imposed 2024 debt brake in a 476.8 billion euros ($517.8 billion) proposal drawn up by the parliamentary budget committee on Thursday, according to the draft seen by Reuters and people familiar with the matter.Under the proposal, which concludes months of tense negotiation over Germany’s 2024 spending, Europe’s top economy can issue 39 billion euros in new debt, which would be within the government’s limit.The committee agreed on the proposal in deliberations that ended on Thursday, three people familiar with the matter said. Germany’s lower house is scheduled to approve the 2024 budget on Feb. 2.The debt brake, enshrined in the German constitution, restricts the public deficit to 0.35% of gross domestic product.The government in 2023 decided to suspend the cap on borrowing after a Constitutional Court ruling blocked the repurposing of unused pandemic emergency funds.Chancellor Olaf Scholz’s three-party coalition announced an agreement on key points of the 2024 draft budget in December following weeks of talks, after the court ruling threw the government’s finances into disarray. Some changes to the agreement have been made since then.Green Party politician Sven-Christian Kindler earlier said Germany need not suspend its brake on debt issuance in 2024 to finance rebuilding after major floods in western Germany in 2021.Finance Minister Christian Lindner welcomed the draft that effectively rules out an exception to the country’s debt brake, which became a major sticking point among the coalition partners.”I can currently not imagine anything that would justify that,” he told Reuters in an interview on Thursday on the sidelines of the World Economic Forum in Davos.On Tuesday, provisional budget accounts for last year published by the finance ministry showed Germany had 6.3 billion euros more than expected to help finance this year’s budget.Some of that money can go into a special fund, created in 2021 following floods in the Ahr Valley, that has been earmarked 2.7 billion euros this year.($1 = 0.9208 euros) More

According to the ESR Group, mortgage rates are expected to fall below 6%, a shift that may encourage more homeowners to refinance. The Refinance Application-Level Index suggests that refinance volumes could likely double, providing relief from the “lock-in effect” that has been restraining existing home sales. This effect has made it financially unattractive for many homeowners to sell their homes and purchase new ones due to higher prevailing mortgage rates.The easing of mortgage rates is projected to boost the housing market, with the ESR Group forecasting an increase in existing home sales from 3.8 million units in Q4 of the previous year to approximately 4.5 million units by Q4 2024. The demand for new single-family homes is also expected to rise, although concerns about housing affordability continue to loom over the market.Despite the positive outlook, the ESR Group warns that the risk of recession has not been entirely eliminated, given the ongoing economic uncertainties. Nonetheless, they expect modest growth in the economy, driven by improved financial conditions and an increase in real personal income, which could further support the housing market’s recovery.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

(Reuters) – A look at the day ahead in Asian markets.The number one focus for investors in Asia on Friday will be the latest Japanese consumer inflation figures, with markets across the region hoping to draw support from the strong rise on world markets the day before and end a torrid week on a high.The MSCI Asia Pacific ex-Japan index is down 3.7% this week, on track for its biggest weekly loss since August. After jumping 6.6% higher last week for its best performance in nearly two years, Japan’s Nikkei is also in the red.But only just. A soft inflation number that raises more questions over the Bank of Japan’s policy normalization and eventual move toward positive interest rates could be the catalyst for a Friday buying frenzy.Japan’s annual headline rate of inflation crossed above the BOJ’s 2% target in April 2022 and has been there ever since. The retreat from its 4.3% peak a year ago has been slow, and in November it had eased to 2.8%.A sizeable decline in December would add to the weight of evidence that price pressures are lifting. This has prompted many investors and analysts to question how quickly the BOJ will normalize policy and lift interest rates into positive territory.Economists expect annual core inflation to cool to 2.3% from 2.5%, which would be the lowest since June 2022.Weaker-than-expected machinery orders and recent dovish comments from BOJ Governor Kazuo Ueda have pushed the yen back down towards the 150.00 per dollar level. It is down 5% so far this month, on for its biggest monthly slide since June 2022.None of the 29 economists in a Jan. 9-16 Reuters poll expect the BOJ to raise its short-term deposit rate of minus 0.1% at its policy meeting next week. That is down from 14%, or four of 28 economists, who expected a change in a December survey.More broadly, risk assets rebounded on Thursday after days of being beaten down, as the recent surge in global bond yields slowed down dramatically and a renewed bout of optimism around AI boosted tech stocks.U.S.-listed shares of Taiwan Semiconductor Manufacturing TSMC) were among the biggest winners on Wall Street, jumping 8% after the world’s largest contract semiconductor maker projected 2024 revenue growth of more than 20%.The yuan also goes into the last trading day of the week on the defensive, at a two-month low against the dollar, but a weakening domestic currency is not having the positive impact on Chinese stocks like it is in Japan.Here are key developments that could provide more direction to markets on Friday:- Japan inflation (December)- New Zealand PMI (December)- Malaysia trade (December) (By Jamie McGeever; Editing by Bill Berkrot) More

The data show that the gender pay gap in Europe’s biggest economy has remained unchanged since 2020. That is down from 23% when records started in 2006.On an adjusted basis, the gender pay gap for 2023 was 6%, said the office. Women’s earnings start to stagnate from the age of 30 years, the average age for women to have their first child in Germany, said the office, while men continue to earn more.”This could be because women interrupt their careers more frequently during their working lives for family reasons and work part time,” said the Office, adding that career advancement and pay rises are therefore less frequent.On average, women earned 20.84 euros per hour, compared with 25.30 euros for men. However, at 7%, the gap is far narrower in the former communist East compared with 19% in western Germany.A study published on Wednesday showed the number of women at the helm of Germany’s top companies is shrinking. More

After Lula upped spending on social measures in his first full year in office, the market is worried his administration won’t meet its fiscal goals. Despite falling interest rates, long-term future interest rates remain high, underlining market discomfort with the government’s fiscal situation.In a late-Wednesday report, the technical area of the TCU said the government’s anticipated revenue growth was based on “various measures whose consequences are still not very clear or predictable.” The government’s forecast of net primary revenue reaching 19.2% of gross domestic product (GDP), the highest level since 2010, signifies a “value much above what has been observed in recent years, indicating a possible overestimation,” it added.Planning Minister Simone Tebet defended the government’s revenue expectations, telling journalists on Thursday they were “reasonable.”Utilizing the same revenue level observed in 2022 and the government’s projected expense for this year, the TCU projected that the primary deficit for this year would reach 0.5% of GDP.The TCU’s outlook is in line with other market players, and comes despite the approval of government fiscal measures to boost revenue at the end of 2023. “In the legislative process, the measures were naturally dehydrated,” Marcus Pestana, former federal deputy and executive director of the Senate’s Independent Fiscal Institution (IFI), said of the government’s fiscal package. Private economists surveyed by the central bank in the weekly Focus survey continue to project a primary deficit equivalent to 0.8% of GDP – a level virtually unchanged since October, well above the zero target for the year, which allows for a variation band of 0.25% of GDP in either direction. More

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The watchdog accused the company of “failing to respect the choice of Internet users who refused cookies on its main website and for not allowing users of its e-mail client to freely withdraw their consent to cookies”. Yahoo EMEA Ltd., the Ireland-based European subsidiary formally subject to the fine, is reviewing the decision to decide on “appropriate next steps”, it said when contacted by Reuters. The French regulator said its investigation found around 20 cookies, small amounts of data used for advertising purposes, were left on an user’s device when visiting yahoo.com, despite the absence of any expressed consent. Concerning Yahoo!’s e-mail client, the CNIL found users could not withdraw their consent for cookies without giving up their access to the company’s messaging service. ($1 = 0.9206 euros) More