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Quarterly Macroeconomic Outlook: Economic growth slows down but fundamentals remai...

10 Okt

Martin Ertl

The global economy continues to expand solidly with the business cycle accelerating in the United States and slowing down in the Euro Area as well as some emerging market economies. The economic outlook of the Central Eastern European region remains favorable, despite of emerging market turbulences. We project growth at 4.0 % (2018) and 3.5 % (2019) for CEE (ex Russia). The global economy continues to grow at a solid pace, the peak has, however, most likely been reached and downside risks related to trade protectionism have intensified. The September 2018 economic outlook by the OECD projects world GDP to grow at 3.7 % in 2018 and 2019. The growth rate in the volume of world trade has decelerated during the last 4 quarters from 5.2 % in Q3 2017 to 3.9 % in Q2 2018. Global economic sentiment, though also de...     » Weiterlesen


U.S. Fed continues its interest rate hiking cycle (Martin Ertl)

02 Okt

Martin Ertl

Monetary policy is becoming less accommodative as U. S. growth remains strong, inflation near the target rate and unemployment very low.The large Fed balance sheet will shrink steadily coinciding with a normalization in longer-term U. S. interest rates.In the meeting of the Federal Open Market Committee (FOMC) last week, the Fed decided to raise the target range of the federal funds rate by 25 basis points to 2-2.25 %. It was the 3rd increase this year and the 8th hike since the Fed embarked on an interest rate hiking cycle in 2015.The FOMC statement remained mostly unchanged compared to the June statement. It says that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong and the unemployment rate has stayed low (3.9 % in Augus...     » Weiterlesen


The comparative economic development of Serbia and Kosovo (Martin Ertl)

17 Sep

Martin Ertl

Serbia made comparably more economic progress than Kosovo, but both countries underperform with respect to income convergence in Eastern Europe.Recently, both countries had a solid recovery. Serbia‘s recovery is boosted by construction. The current GDP growth rate is likely not sustainable but the macro environment remains sound.Foreign remittances, rising wages and lending growth support consumption in Kosovo.Central and Eastern Europe (CEE) makes substantial progress in closing the income gap relative to Western Europe. Figure 1 shows the level of per capita gross domestic product (GDP p. c.) in 2000 and the percentage change between 2000 and 2017. Countries with lower GDP p. c. exhibit higher growth rates. After the dissolution of the Socialist Federal Republic of Yugoslavia in the 1990s, some of...     » Weiterlesen


What should we expect finance ministers to discuss at the Eurogroup meeting this w...

03 Sep

Martin Ertl

The upcoming Eurogroup meeting in Vienna intends to discuss inefficiencies in Euro Area labor and product markets to boost productivity.Productivity developments have been quite heterogeneous with adverse consequences for labor markets.Unemployment is high in international comparison and structurally weak labor markets remain a vital policy concern in some Euro Area member states.Labor market reforms have already been initiated targeting youth unemployment, long-term unemployment and labor market segmentation. However, effective implementation needs to be further strengthened.Euro Area economic and finance ministers will meet in Vienna this Friday, ahead of the informal EU Ecofin meeting, to discuss “policies geared at strengthening longer-term growth and employment prospects” [1]. More specifi...     » Weiterlesen


Russia’s economic resilience against sanctions (Martin Ertl)

28 Aug

Martin Ertl

The Russian economy weathers financial sanctions amid macroeconomic stability supported by prudent fiscal and monetary policy.External debt is well covered by foreign currency reserves.The equilibrium real ruble exchange rate has been determined by the terms-of-trade due to oil price fluctuations. Recently, US sanctions might have loosened the exchange rate co-movement with the price of oil.In June, Russian government debt held by non-residents (OFZ) amounted to 2 trillion rubles (25.6 bn EUR) or 28 % total outstanding ruble-denominated government debt. The share of government debt held by non-residents has been declining (34 % in January). The total outstanding nominal of Eurobonds (securities issued in hard currency in the international bond markets) amounts to 31.4 bn EUR with 2.2 bn repayable until end...     » Weiterlesen

Martin Ertl

Chief Economist, UNIQA Capital Markets GmbH

>> http://uniqagroup.com/gruppe/