EU recession might not be that bad this year, as Germany recovers fast

[Tender Branson]

German Business Confidence Hit 7-Month High in February

By Jeff Black - Feb 23, 2012 10:29 AM GMT+0100

German business confidence rose more than economists forecast to a seven-month high in February as progress in taming Europe’s debt crisis tempered the risk of a recession.

The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg News survey. Italian consumer confidence also rose more than forecast, a report showed today.

Greece’s clinching of a second bailout package in Brussels this week and falling yields on government debt from Spain to Italy have buoyed investors’ optimism that the debt crisis has been shackled for now. The German economy, Europe’s largest, contracted less than forecast in the fourth quarter of 2011 and demand from abroad helped factory orders beat estimates in December, adding to signs the country can skirt a recession.

“Did anyone say recession?” said Carsten Brzeski, senior economist at ING Group in Brussels. “Today’s Ifo index provides further evidence that the economic contraction at the end of last year was only a brief stopover.”

Ifo’s gauge of the current situation increased to 117.5 from 116.3, while an index measuring executives’ expectations advanced to 102.3 from 100.9. The euro gained more than a third of a cent to $1.3330 immediately after the report.

Germany’s Bundesbank said on Feb. 20 that the outlook for the economy has “improved perceptibly,” even though “risks relating to the sovereign-debt crisis remain.”

The Bundesbank in December forecast growth will slow to 0.6 percent this year from 3 percent in 2011 before accelerating to 1.8 percent in 2013.

http://www.bloomberg.com/news/2012-02-23/german-business-confidence-climbs-more-than-forecast-to-seven-month-high.html

[Tender Branson]

This is a table from the economic forecast that was released today by the EU commission:



http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/163&format=HTML&aged=0&language=EN&guiLanguage=en

Or, from best performer to worst performer (second column is the previous forecast from Nov. 2011):

Land   BIP: Prognose Feb. 2012   Herbstprognose Nov. 2011

Polen   +2,5 +2,5
Litauen   +2,3   +3,4
Lettland   +2,1   +2,5
Rumänien   +1,6   +2,1
Bulgarien   +1,4   +2,3
Estland   +1,2   +3,2
Slowakei   +1,2   +1,1
Dänemark   +1,1   +1,4
Malta   +1,0   +1,3
Finnland   +0,8   +1,4
ÖSTERREICH   +0,7   +0,9
Luxemburg   +0,7   +1,0
Schweden   +0,7   +1,4
Deutschland   +0,6   +0,8
Großbritannien   +0,6   +0,6
Irland   +0,5   +1,1
Frankreich   +0,4   +0,6
Tschechien   0,0   +0,7
Belgien   - 0,1   +0,9
Slowenien   - 0,1   +1,0
Ungarn   - 0,1   +0,5
Zypern   - 0,5   0,0
Niederlande   - 0,9   +0,5
Spanien   - 1,0   +0,7
Italien   - 1,3   +0,1
Portugal   - 3,3   - 3,0
Griechenland   - 4,4   - 2,8

http://www.news.at/articles/1208/38/319998/euro-krise-eu-rezession

[Tender Branson]

Any reason why the Netherlands is doing so badly this year ?

I mean, there are the usual suspects of Greece, Italy, Spain, Portugal, Hungary and Cyprus with all their problems, but Holland ?

[Tender Branson]

Here's the full report with a country by country breakdown:

http://ec.europa.eu/economy_finance/articles/eu_economic_situation/pdf/2012/2012-02-23-interim-forecast_en.pdf

[afleitch]

Britain has also reported a budget surplus this week. Good early signs.

[© Tweed the Younger]

cute girl next to me on the build-your-own salad line ordered Greek dressing.  young Tweed: "they don't have any.  they're in a recession"

[Insula Dei]

Any reason why the Netherlands is doing so badly this year ?

I mean, there are the usual suspects of Greece, Italy, Spain, Portugal, Hungary and Cyprus with all their problems, but Holland ?

Rutte is at the forefront of the Austerity Pack. Wouldn't be surprised if that's what hurting economic growth in the Netherlands.

[Tender Branson]

Any reason why the Netherlands is doing so badly this year ?

I mean, there are the usual suspects of Greece, Italy, Spain, Portugal, Hungary and Cyprus with all their problems, but Holland ?

Rutte is at the forefront of the Austerity Pack. Wouldn't be surprised if that's what hurting economic growth in the Netherlands.

Interesting.

One could think Dutch politicians would work like their Austrian counterparts and find measures to cut accross the board and increase some taxes that alltogether won't impact economic growth. For example, it was estimated that the recent 30 billion € budget consolidation package here would not reduce economic growth this year and only reduce it by 0.1% in 2013.