FRANKFURT (MNI) – The Bundesbank struck a positive tone in its
Monthly Report for August, predicted that the global economic upswing
would continue.
“All in all, there is plenty to support the view that the global
recovery is intact and global growth in the next year will be robust,”
the German central bank argued.
The world economy was characterized by a subdued performance in 2Q,
but this was to a considerable extent a consequence of temporary
factors, whose influence is waning, it said.
The global economy was also burdened by a significant loss of
purchasing power among consumers due to price increases for energy and
food during the winter and the beginning of spring, it said.
There were also longer-term factors, including interest rate hikes
and other measures to limit the expansionary monetary policy of central
banks, it noted.
Looking at the development of the German economy, the Bundesbank
said the underlying trend in 2H remained upward, but is expected to slow
somewhat going forward.
Evidence suggests that elevated expectations in the corporate
sector are being scaled back and that order flows — except for large
orders — are losing steam, it said.
In addition, a number of global risks, such as uncertainty about
the U.S. economy and possible fatigue in emerging countries, increasing
nervousness in global financial markets and the ongoing sovereign debt
problem could also be expected to have a negative effects on confidence,
it noted.
The tepid consumer demand of recent months, despite the favourable
jobs market, was probably a consequence of the gloomy price climate,
when fuel prices reached record levels and hit private householders, it
said.
Indicators suggest the labor market will develop positively in the
near term, although the pace of expansion is expected to moderate, it
said.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com
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