With Russia’s war in Ukraine a month away, Trust Economics (https://trusteconomics.eu) has its estimates for the global economy outlook this year. Within this short period of time, forecasts shifted from a limited recovery after COVID to an increasing chance of a full-blown global recession. The chances of a recession are rising, given the volatile inflation …
Tag: growth
The German Economy Is Heading for a New Recession
The scenario of stagnant inflation in the German economy is visible, which is the worst possible at this time. Extremely worrying are the data for the German economy for the fourth quarter of 2021. In fact, the forecast of Trust Economics (https://trusteconomics.eu) is that, if the problem of the pandemic continues and Q22022 the next …
Persistent High Inflation Prices Reflect Changes in the Real Economy
The inverse relationship between inflation and unemployment has been shown to be temporary-short-term and does not stem from inflation per se, but from unexpected inflation, which contributes to maintaining inflation. By the fact that inflation can contribute to the development of an economy, we mean the positive relationship between rising inflation, that is, the increase …
Income Increases in the EU are Imperative
Due to the difficulties faced by households in coping with rising energy costs, EU member-countries’ governments have entered the process of supporting household electricity bills through a subsidy policy. Sure, such a policy – covering subsidized electricity increases – is a humanitarian benefit, but it is not enough, as it only covers part of the …
The Global Economy is losing Momentum
The outlook for the global economy does not seem to be so favorable given the significant challenges it has to face. More specifically, the problem of inflation is major at the moment with most analysts believing that the phenomenon is temporary and once supply chain problems normalize, striking a balance between supply and demand, inflation …
When Real Interest Rates Are Lower Than Growth Rates Help Reduce Public Debt
After the end of World War II, short-term interest rates in the US were less than 1%, while T-Bond bonds with 10-year maturity yielded about 2% (https://www.govinfo.gov/content/pkg/ERP-2012/pdf/ERP-2012-table73.pdf) with the US Federal Reserve, the Fed directly purchases Federal Government bonds from the US Treasury Department. At that time (1946) the US national debt reached 119% of …
Commodity Prices Have Exceeded Pre-Pandemic Covid-19 Levels
All commodity prices are now above pre-Covid-19 levels. This is mainly due to pre-pandemic oversupply demand, further declining industrial productivity, supply chain problems, rising shipping costs and incessant demand from China. In the chart below we see the prices on a quarterly basis for WTI Crude Oil, corn, and Lean hogs with the sample starting …
The Ingredients for Economic Prosperity: Energy & Growth
One of the most important costs for the operation of a business and the entire market is the cost of energy, which together with other factors e.g., such as labor costs, etc., largely shape the final prices of the product and service produced respectively. The increased energy costs today, the global trend is to increase …
What Businesses Need to Be Ready When Growth Starts
In the second half of 2021 businesses should be ready to “run” in a new and quite different environment. Of course, until then, the primary issue is their survival so that they can successfully overcome any difficult transition in the second half of 2021. To be ready for the upcoming increase in overall demand that …
Pandemic Forces Governments to Adopt Socialist Economic Policies
The ever-increasing implementation of the monetary policy, which, due to the pandemic and its measures to deal with economic shutdowns and social isolation, in other words the continuous printing of money, is being used to cover the damage caused to economies while providing state aid to both workers and businesses (in the form of subsidies …