DB Research - Neueste Publikationen und Beiträge
Contagion: Italy and the role of fiscal similarity
Thu, 15 Nov 2018 12:00:00 +0100
Tensions in financial markets have increased significantly since the populist/Eurosceptic Five Star/League in Italy took power in May and presented a budget in violation of EU rules. In an unprecedented move, the European Commission sent Rome back to the drawing board. Italy has now provided the Commission with its latest fiscal plan – which is not much different from the old plan.
Industry 4.0 – digitalisation to mitigate demographic pressure
Thu, 08 Nov 2018 12:00:00 +0100
With digitalisation becoming an ever more common feature along the value chain, the German industry looks set to enjoy higher potential growth in the coming years. The additional gross value added in German manufacturing might total EUR 70–140 bn for the years between 2018 and 2025. As a rule, the industrial sector is in a better position than numerous (personal) services sectors to benefit from the favourable impact of digitalisation. Traditional capital goods producers, such as the auto industry or mechanical and electrical engineering, are likely to see their gross value creation benefit more strongly from digitalisation than the metals or chemicals sector.
More difficult international environment dampens export outlook
Thu, 08 Nov 2018 12:00:00 +0100
German exporters have had to deal with numerous challenges over the last few years. Exports to the UK, Russia and Turkey have been unusually volatile and trended downwards. Nevertheless, aggregate German exports rose by more than 3% p.a. in real terms between 2012 and 2017. Since the beginning of 2018, the trade conflict between the US and China has steadily intensified. The challenges might spread and turn into a global problem if the US begins to levy import tariffs on additional imports from China and/or increases existing tariffs. Doing so would probably cause the Chinese authorities to respond in kind.
2019: Only 1.3% GDP growth, snap elections a distinct possibility
Sun, 04 Nov 2018 12:00:00 +0100
GDP stagnation in Q3 – 2019 forecast lowered to 1.3%. Despite signs that the WLTP effect is subsiding the recovery looks set to be slow. Export expectations and business sentiment in general have become more clouded on the back of the US/China trade conflict, the problems in the EMs and overall heightened economic uncertainty. Whilst we expect the economy to get back on track in the winter half-year, expansion rates well above potential have become unlikely in 2019. We have therefore trimmed our 2019 growth forecast to 1.3% (1.7%). (Also included in this issue: Auto industry, labour migration, the race for Chancellor Merkel’s succession)
Cyclical vs structural: observing the unobservable
Wed, 31 Oct 2018 12:00:00 +0100
The workhorse framework of macroeconomics and monetary policy relies on the build-up of inflationary pressures across the cycle as the economy tightens, and firms have no choice but to raise wages, which ultimately lifts consumer prices. Within that narrative, the estimation of slack in the economy – the output gap – is crucial to monetary policy authorities. A positive output gap means that the economy is away from its long-term steady-state equilibrium, and unsustainable cost pressures are building up. Currently, the OECD / IMF / European Commission estimate of the output gap in the euro-area is slightly positive and reaching close to 1% by the end of next year.
European Parliament elections 2019: The next “battle for Europe”?
Wed, 24 Oct 2018 12:00:00 +0200
Accelerated by the consequences of the financial/economic and migration crisis, the influence of anti-European, anti-migration movements with a populist playbook in the EU is growing. For the EU, the next crucial stocktaking of voters’ sentiment will be the 2019 elections for the European Parliament on 23-26 May. The European political landscape and with it the composition of national parliaments in the EU member states has changed over the last five years and in some countries substantially so. These shifts can be expected to be reflected in the next European Parliament as well, and – as already the case in the Council – impact European policymaking.
European banks: Shrinkage abounds
Tue, 23 Oct 2018 12:00:00 +0200
The European banking industry remains in restructuring mode. Most institutions are focused on increasing profitability and returns to shareholders. In contrast to previous periods of rising net income, the key this time is exiting less attractive parts of their business rather than expanding across the board. Hence, most P&L and balance sheet components have declined year-over-year, with one major exception: profits. Capital levels have suffered from new, more conservative accounting rules on loan loss provisions.
Financial assets of German households: More diversified than their reputation
Fri, 19 Oct 2018 12:00:00 +0200
German households hold a higher share of their savings in bank deposits than their French or British peers. But their portfolios are more diversified than perception suggests if all low-risk/low-return investments are taken into account. They invest meaningfully in stock markets, both directly and indirectly. The recent upward trend though may be driven by the low interest rate environment. In Q2, household lending in Germany continued to grow dynamically at 3.8% yoy, driven solely by mortgage loans. However, mortgage growth has not increased much recently despite the benign economic situation and booming real estate markets. Consumer loans declined for the first time in five years. Meanwhile, deposits saw exceptionally large inflows, with maturities shortening further.
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