The war and inflation have hit the hopes of recovery in the euro zone; U.S. Job Openings Reach Record High – Macro Snapshot
RIYADH: France and Germany have seen bigger than expected declines in consumer confidence this month as rising inflation and concerns over the impact of Russia’s invasion of Ukraine have wreaked havoc, investigations revealed on Tuesday.
The European Central Bank insists the euro zone can avoid recession, but the collapse in consumer sentiment in its two main economies is a setback. Italy, the third-largest economy, is expected to scale back its growth targets, sources in Rome have said.
In Germany, the GfK institute said its consumer confidence index, based on a survey of around 2,000 people, fell to -15.5 points in April, from a revised -8.5 points a month earlier. and the lowest since February 2021.
“In February, hopes were still high that consumer sentiment would pick up as pandemic restrictions eased. However, the war in Ukraine dashed those hopes,” said GfK’s consumer expert, Rolf Buerkl, in a press release.
In France, the official statistics agency INSEE said its consumer confidence index fell to 91 points from 97 in February, below economists’ expectations in a Reuters poll for 94 and the worst figure since February 2021.
“A fall of this magnitude is rare,” BNP analysts commented in a note which observed that steeper monthly declines had previously only occurred around the 1993 recession and the 2020 lockdown. .
Jobs in the United States
U.S. job openings fell in February but remained near record highs as companies continued to struggle to find scarce workers.
Job postings, a measure of labor demand, fell by 17,000 to 11.266 million on the last day of February, the Labor Department reported Tuesday in its monthly job postings survey and staff turnover, or JOLTS report.
Despite the second consecutive monthly decline, job openings were not too far off the record high of 11.448 million set in December. Economists polled by Reuters had forecast 11 million job vacancies.
Ghana approves electronic tax
Ghana’s parliament on Tuesday approved a new 1.5% tax on electronic payments, known as “e-levy”, after the opposition walked out in protest.
Finance Minister Ken Ofori-Atta proposed the electronic levy in November to widen the tax net, but the opposition was so fierce it sparked a fight in parliament a month later.
Critics believe the e-tax will exclude low-income people and small business owners from the digital economy.
Ruling MPs surprisingly reintroduced the bill on Tuesday, when many opposition MPs were not present, a move analysts have previously said would be one of the only ways to pass the tax.
Kenya Benchmark Lending Rate
Kenya’s central bank kept its key rate at 7% on Tuesday, its monetary policy committee said, in line with market expectations.
In a Reuters poll of eight analysts, five predicted a “hold” decision and three predicted a hike of up to 50 basis points.
Tuesday’s move was the 12th in a row to keep rates steady, extending a pattern of waiting policymakers adopted shortly after the coronavirus crisis hit the East African nation.
Inflation expectations were well anchored within the government’s target range, policymakers said in a statement, adding they were ready to take further action if the situation changed quickly.
Employment growth in Brazil
Brazil added 328,507 net formal jobs in February, Labor Ministry figures showed on Tuesday, well above market expectations, amid positive data across all sectors and a substantial contribution from service activities .
Economists in a Reuters poll predicted 210,000 jobs would be created in Latin America’s biggest economy last month.
The figure, however, is lower than the 397,463 jobs created in February 2021, according to the adjusted figures.
Italy’s budget deficit
Italy plans to confirm its budget deficit target for 2022 at 5.6% of national output, two sources familiar with the matter told Reuters, despite pressure from the coalition to sharply increase borrowing amid growth prospects deteriorate.
Mario Draghi’s government is preparing to cut its growth forecast for this year to 2.8% from a previous target of 4.7% set in September, the sources said, amid rising energy costs and unrest related to Russia’s invasion of Ukraine.
In confirming the 5.6% deficit target, Draghi is helped by the fact that on current trends the deficit is on track for 5.3%, the sources say, leaving room for manoeuvre. potential of 4 to 5 billion euros (4.4 to 5.5 billion dollars). additional spending without increasing the current target. Last year’s deficit was 7.2%.
Pay rubles for gasoline
The Kremlin said on Tuesday that foreign companies must understand that the “economic war” against Russia has changed the situation, meaning they must buy rubles and pay for gas in Russian currency, as Moscow seeks to protect from penalties.
Kremlin spokesman Dmitry Peskov reiterated that Russia will not export its gas for free and said Russia is working out ways to make gas payments simple, clear and convenient, with all options to be worked out d here on March 31.
“Companies must take into account the changing conditions and the absolute change in the situation that arose with the economic war against Russia,” Peskov told reporters.
With elections looming next month, the government has planned more than 25 billion euros ($27 billion) in measures to cap gas and electricity prices, make inflation-compensating donations to households low-income and offer a discount on fuel prices.