Money Buzz! Europa

Category: Economy

  • Czech Parliament approved the largest income tax cut in decades

    Czech Parliament approved the largest income tax cut in decades

    Czechia will cut the income tax next year, a measure that according to the Prague government would help the economy recover from the coronavirus recession, Bloomberg reports.

    The Parliament approved a reduction in income tax proposed by billionaire Prime Minister Andrej Babis, who wants to extend incentives beyond current measures such as paying wages for temporarily laid off workers and subsidizing small businesses.

    The Czech Ministry of Finance estimates that this change, which introduces a tax threshold of 15% for those on low incomes and one of 23% for those on high incomes, will reduce state revenues by about 80 billion kroner (3.6 billion dollars) next year, or 1.3% of GDP.

    The plan was criticized by Central Bank Governor Jiri Rusnok, who said it would create a long term hole in public finances.

  • Italy, Spain and France are the largest wine producers in EU

    Italy, Spain and France are the largest wine producers in EU

    In 2019, the sold production of wine (including sparkling wine, port and grape must) in the EU was around 16 billion (bn) litres.

    The largest wine producers were Italy, Spain and France, followed by Portugal, Germany and Hungary, Eurostat shows.

    Italy produced over 5,5 billion litres in 2019 (around 35% of total EU wine production), Spain produced 4,3 billion litres and France 3,4 billion litres.

    Italy EU’s top exporter of wines

    In 2019, the EU Member States exported 7.1 bn litres of wine.

    Almost half of this wine was exported to countries outside of the EU (3.1 bn litres, or 43% of the total wine exports), mainly to the United Kingdom (0.69 bn litres, or 22% of extra-EU exports) and the United States (0.65 bn litres, 21%), followed by Russia (0.28 bn litres, 9%) and China (0.25 bn litres, 8%).

    Italy was by far the top exporter of wine, with extra-EU exports of 1.1 bn litres in 2019, representing 34% of the EU Member States’ extra-EU exports of wine. It was followed by France (0.8 bn litres, 25%) and Spain (0.7 bn litres, 22%).

    Top importer: Germany

    The EU Member States imported a total of 4.8 bn litres of wine in 2019. Only 16% of this came from non-EU countries, notably from Chile (0.17 bn litres, 23% of extra-EU imports) and South Africa (0.16 bn litres, 21%).

    Among the EU Member States, the largest importers of wine were Germany (0.23 bn litres, or 30% of the EU Member States’ extra-EU imports), the Netherlands (0.11 bn litres, 15%), Denmark (0.07 bn litres, 9%), Sweden (0.06 bn litres, 8%), Belgium and France (both 0.05 bn litres, 7%) and Ireland (almost 0.05 bn litres, 6%).

  • Czechs living in the country’s largest cities have the highest purchasing power

    Czechs living in the country’s largest cities have the highest purchasing power

    Czechia has a per capita purchasing power of €9,179, which puts it almost 34 percent below the European average and in twenty-fifth place among the 42 countries in the ”GfK Purchasing Power Europe 2020” study.

    The capital city district of Prague once again tops the purchasing power rankings. Inhabitants of this district have €11,961 per capita available for spending and saving, which is more than 30 percent above the national average.

    However, the purchasing power of the inhabitants of Prague is still almost 14 percent below the European average.

    The two bordering districts of Praha-zapad and Praha-vychod also have above-average purchasing power, as does the Czech Republic’s second largest city, Brno-mesto. 

    There have been a few changes in the top ten this year, with Brno-mesto and Praha-vychod switching places three and four and Beroun, Hradec Kralove and Benesov also changing places in the rankings.

    A new entry this year is the district of Kladno, which secures the final place in the top ten with a per capita purchasing power of €9,328.

    Bringing up the rear in the district rankings is Jesenik in Northern Moravia, located on the border with Poland. The district’s inhabitants have a per capita purchasing power of €7,597, which is almost 83 percent of the national average and around 55 percent of the European average. 

  • Average per capita purchasing power in Italy at €16,439 in 2020

    Average per capita purchasing power in Italy at €16,439 in 2020

    In Italy the average per capita purchasing power is €16,439 in 2020, as shown on ”GfK Purchasing Power Europe 2020” report.

    This puts Italians around 18 percent above the European average and in sixteenth place among the 42 countries considered by GfK’s study. 

    There is a significant north-south divide in the distribution of purchasing power between Italy’s affluent north and poorer south. All of the provinces in the top ten are located in the north of Italy. The province of Milano remains at the top of the rankings.

    The area around the fashion metropolis has a per capita purchasing power of €23,507, which is 43 percent above the national average and more than 69 percent above the European average.

    New to the top ten is the province of Firenze, which occupies tenth place and ousts the province of Valle d’Aosta/Vallee d’Aoste from the top ten. The provinces of Monza e della Brianza and Genova switch fifth and eighth places in the rankings.

    The ten least affluent provinces are all located in southern Italy

    Last place goes to Crotone, which is situated in the country’s far south.

    Inhabitants of this province have a per capita purchasing power of €9,119, which is around 45 percent less than the national average and around 34 percent less than the European average.

  • Poland’s economy recovered in the third quarter of 2020

    Poland’s economy recovered in the third quarter of 2020

    Poland’s economy has recovered in the third quarter of 2020, according to data released on Friday by the Statistics Office.

    Poland, the largest economy in Central and Eastern Europe, grew by 7.7% in the third quarter of 2020 compared to the previous three months.

    This is slightly below the estimates of analysts interviewed by Reuters, who expected an advance of 8%.

    Also, GDP decreased by 1.6% in the third quarter from the same period in 2019, while analysts forecast a decline of 1.7%.

    Last week, Prime Minister Mateusz Morawiecki announced new support measures to help Poland’s economy survive the second wave of the pandemic, worth 9-10 billion zlotys (2.4-2.6 billion dollars).

    The amount could increase by 5-10 billion zlotys if total restrictions are introduced, the Polish official explained, adding that the Government’s funding needs are already met.

    During the first wave of the pandemic, Poland introduced a support package of more than 300 billion zlotys to help the affected economy and companies.

  • EU household saving rate recorded its highest year-over-year increase

    EU household saving rate recorded its highest year-over-year increase

    In the second quarter of 2020, the EU household saving rate recorded its highest year-over-year increase since the time series began at +10.8 percentage points (pp), Eurostat reports.

    The main reason behind this was a marked 17.3% year-on-year decline in household final consumption expenditure. This drop in household final consumption expenditure was in stark contrast with the decrease of 1.8% in the last quarter and recent increases in excess of 2%.

    Compared with the second quarter of 2019, the household saving rate increased in all but one of the Member States (for which data are available) in the second quarter of 2020.

    Sweden was the only Member State where there was a decline (-0.6pp), while the highest year-over-year increase was observed for Ireland (+22.0 pp), followed by Spain (+13.7 pp).

    The increase in the household saving rate in the majority of the countries with available data is mainly explained by the large decrease in household individual consumption expenditure.

    The largest decreases in household expenditure were observed for Spain (-23.9%) and Ireland (-22.8%), while the lowest decreases were noted in Czechia (-4.4%) and Denmark (-7.7%).

  • EU to impose additional tariffs on „Made in USA” products

    EU to impose additional tariffs on „Made in USA” products

    The European Union will impose additional tariffs on American products, European Commission Vice President Valdis Dombrovskis announced on Monday, AFP and DPA reported.

    On October 26, the World Trade Organization (WTO) formally authorized the European Union to impose additional tariffs on US products worth nearly four billion dollars (3.37 billion euros).

    Europe has already prepared a long list of US products that could be targeted by the new tariffs, a list that includes airplanes, wines, spirits, tractors, frozen fish and frozen orange juice.

    Last month’s WTO decision, to the benefit of the EU, comes about a year after the institution granted the US the right to impose additional tariffs on European products worth $ 7.5 billion, due to illegal subsidies granted by the European Union to Airbus.

  • Italian economy recovered slightly in the third quarter

    Italian economy recovered slightly in the third quarter

    In the third quarter, Italy Gross Domestic Product increased by 16.1% with respect to the previous quarter, whereas it decreased by 4.7% over the same quarter of 2019.

    As for external trade, in August, seasonally-adjusted data, compared to July, rose by +3.3% for outgoing flows and by +5.1% for incoming flows.

    Exports grew for both EU countries (+5.3%) and non EU countries (+1.2%). Imports increased by +5.2% for EU countries and by +4.9% for non EU countries.

    Over the last three months, seasonally-adjusted data, compared to the previous three months, increased for both exports (+26.2%) and imports (+18.7%).

    In September, in seasonally adjusted terms, exports to non-EU27countries increased by 8.3% and imports decreased by 2.7% compared with August.

    In September, unemployment continued the decrease already began in August

    In the period July-September, with respect to the previous quarter, employment grew (+0.5%, +113 thousand).

    According to preliminary estimates, in October the rate of change of the Italian consumer price index for the whole nation (NIC) was +0.2% on monthly basis and -0.3% on annual basis (from -0.6% in September).

    The halving of the decrease of consumer price indices was mainly due to the speed-up of the growth of the prices of unprocessed food and to the reduction of the drop of those of regulated energy products.

  • Global economy to shrink by 4.5% in 2020 as China’s GDP grows by 1.6%

    Global economy to shrink by 4.5% in 2020 as China’s GDP grows by 1.6%

    According to the research data analyzed and gathered by StockApps.com, the global economy is set to decline by 4.5% in 2020.

    In 2019, the global GDP grew 2.6% and by 2021, it is projected to grow by 5.0%. South Africa will suffer the hardest blow with an 11.5% decline.

    According to WeForum, the economic shock experienced in 2020 is three times worse than the 2008 financial crisis in terms of annual GDP decline.

    China’s economy could be worth $14.6 trillion in 2020

    The OECD report reveals that all G20 economies apart from China will suffer a recession in 2020. China is set to grow by 1.6% in 2020 according to World Bank projections, compared to a 5.2% global contraction. 

    Based on a report from CNN, China’s economy could be worth $14.6 trillion by the end of 2020, giving it a 17.5% share of the global GDP.

    During Q3 2020, China’s economy surged by 4.9% year-over-year (YoY), up from 3.2% in Q2 2020. In the first week of October 2020, tourist spending surged by 70% and reached $70 billion. Over 630 million people traveled around the country, 80% more than in 2019.

    On the other hand, the US GDP is set to sink by 3.8% in 2020 according to the OECD. However, Morgan Stanley projects that it will rebound to pre-pandemic levels by Q2 2021, two quarters earlier than previous forecasts anticipated.

    For the G20 as a whole, there will be a 4.1% GDP decline while the Euro zone will drop by 7.9%. In addition to South Africa, other hard-hit countries in the G20 will include Argentina (-11.2%), Italy (-10.5%), Mexico (-10.2%), India (-10.2%) and the UK (-10.1%). As a whole, the G20 will shoot up by 5.7% in 2020 while the Euro zone will grow by 5.1%.

  • Europeans’ concerns regarding financial and employment problems diminished

    Europeans’ concerns regarding financial and employment problems diminished

    Europeans’ concerns regarding their financial and employment problems diminished in the first four months since the first COVID-19 restrictions imposed by the authorities have eased, according to Deloitte State of Consumer Tracker survey.

    Two-thirds of respondents are being more open to the idea of making large purchases and more relaxed about the stability of their job.

    Nevertheless, Europeans are still as concerned about their physical well-being as they were during the lockdown (47% at the end of August, compared to 48% in May). European trends are in line with the global ones.

    The tracker also shows that safety remains a concern for the European consumers, considering that almost half of them (45%) say they do not feel safe when shopping in stores.

    The Germans are the most concerned about this matter (55%), followed closely by the Polish (51%), while the Belgians are at the opposite side (40%).

    However, consumers maintain their preferences for making certain purchases offline, considering that almost three quarters of respondents intend to shop in-store for groceries (77%) and household goods (73%).

    The results also show that, within the time elapsed since the restrictions relaxation, the intent to purchase household goods has tempered – the share of respondents who want to spend more on such goods has decreased from 20% in May 2020, to 12% at the end of August.

    At the same time, while 24% of respondents said that they wanted to spend more on grocery goods in May, their share reached 16% in August.

    Based on the analysis of the spending behavior, the study shows that the profile of the socially conscious shopper, which intends to buy more from local brands even if the cost is a little higher, still dominates throughout Europe (43%).

    Four out of ten Europeans say they are bargain hunters, a profile characteristic to people who buy on the spot non-essential items if they find good deals, this profile being the most common among the Germans (47%) and British (48%).

    The following profiles in terms of share among Europeans are the convenience seekers (34%), which are consumers who spend more on convenience goods, and the stockpilers (32%), which plan to buy stocks of goods for more than immediate needs.

    Deloitte State of Consumer Tracker is conducted based on biweekly online surveys, applied in Australia, Belgium, Canada, Chile, China, France, Germany, India, Ireland, Italy, Japan, Mexico, the Netherlands, Poland, Spain, South Korea, the United Kingdom and the United States.

  • Bulgarian households deposits at BGN 58.152 billion in September 2020

    Bulgarian households deposits at BGN 58.152 billion in September 2020

    At the end of September 2020, deposits of the non-government sector in Bulgaria were BGN 89.776 billion (80.9% of GDP), increasing annually by 9% (8.9% annual growth in August 2020).

    Deposits of Non-financial corporations were BGN 28.529 billion (25.7% of GDP) at the end of September 2020.

    Compared to the same month of 2019 they increased by 12.4% (12.2% annual growth in August 2020).

    Deposits of Financial corporations decreased by 0.6% annually in September 2020 (5.2% annual growth in August 2020) and at the end of the month they were BGN 3.094 billion (2.8% of GDP).

    Deposits of Households were BGN 58.152 billion (52.4% of GDP) at the end of September 2020. They increased by 7.9% compared to the same month of 2019 (7.6% annual growth in August 2020).

    At the end of September 2020, claims on loans to the non-government sector amounted to BGN 64.303 billion (57.9% of GDP) compared to BGN 63.580 billion (57.3% of GDP) at the end of August 2020.

    They increased annually by 5.9% in September 2020 (6.1% annual growth in August 2020).

  • Blockchain technologies could boost the global economy USD 1.76 trillion by 2030

    Blockchain technologies could boost the global economy USD 1.76 trillion by 2030

    Blockchain technologies are expected to be adopted at scale across the global economy by 2025 and have the potential to boost global gross domestic product (GDP) by USD 1.76 trillion over the next decade.

    Data was revealed in PwC’s Report ”Time for trust: The trillion-dollar reason to rethink blockchain”.

    The potential for blockchain to be considered as part of organisations’ future strategy is linked to research by PwC with business leaders that showed almost two thirds of CEOs (61%) said they were placing digital transformation of core business operations and processes among their top three priorities, as they rebuild from COVID-19.

    At a sector level, the biggest beneficiaries look set to be the public administration, education and healthcare sectors.

    Meanwhile, there will be broader benefits for business services, communications and media, while wholesalers, retailers, manufacturers and construction services, will benefit from using blockchain to engage consumers and meet demand for provenance and traceability.

    In terms of individual countries, blockchain could have the highest potential net benefit in China (USD 40 billion) and the USA (USD 407 billion). Five other countries – Germany, Japan, the UK, India, and France – are also estimated to have net benefits over USD 50 billion.

    The report identifies five key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research:

    • Tracking and tracing of products and services – or provenance – which emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic, has the largest economic potential (USD 962 billion).
    • Payments and financial services, including use of digital currencies, or supporting financial inclusion through cross border and remittance payments (USD 433 billion).
    • Identity management (USD 224 billion) including personal IDs, professional credentials and certificates to help curb fraud and identity theft.
    • Application of blockchain in contracts and dispute resolution (USD 73 billion), and customer engagement (USD 54 billion) including blockchain’s use in loyalty programmes further extends blockchain’s potential into a much wider range of public and private industry sectors.