Money Buzz! Europa

Category: Economy

  • US imports from China slumps by 45% in just 7 months

    US imports from China slumps by 45% in just 7 months

    Data gathered by Learnbonds.com reveals that the value of United States trade in goods for both exports and imports with China has dropped by 45.12%.

    The dropped is largely attributed to the trade war between the United States and China.

    The data shows that in March 2020, the value of U.S. trade in goods with China amounted to around $27.78 billion with imports totaling to $19.81 billion and exports at $7.97 billion.

    In August last year, the total trade value stood at $50.62 billion with imports at $41.19 billion while exports were $9.43 billion. From August last year, the value declined and slightly rose in October to $49.04 billion.

    Between January and March this year, the trade value dropped by about 32.09%. Between March last year ($41.6 billion) and March this year ($27.78 billion), the total trade value has slumped by 33.2%.

    The data further shows that between August last year and March 2020, imports dropped by a staggering 51.9% while exports slightly plunged by 15.48%.

    From the data, it is clear that the trade value shows that imports are the most impacted compared to exports. Generally, the drop is expected to continue. According to our research report:

    The research also compared the monthly value of export for both the United States and China from April 2017 to March 2020. China’s total export value stood at $7.27 trillion while the United States value was $7.18 trillion, a percentage difference of 1.2%. The US export value has been consistent and the lowest figure was $187.7 billion while the highest value for the export was in April 2018 at $213.3 billion.

    For China, the exports were valued highest in January and February at $292.45 billion. The lowest value was registered in February last year at $135.24 billion. 

  • Poland’s aggressive rate cuts are amplifying profitability pressure for banks

    Poland’s aggressive rate cuts are amplifying profitability pressure for banks

    Moody’s has recently published a report concluding that the Poland’s aggressive rate cuts are amplifying profitability pressure for banks.

    On 28 May, the National Bank of Poland lowered its reference rate by 40 basis points, bringing the rate down 140 basis points cumulatively with three rate cuts since 17 March to a historic low of 0.10%.

    Easing monetary policy is part of the authorities’ policy response to soften the negative effect of the coronavirus crisis. The interest rate cuts will significantly reduce Polish banks’ net interest margins and add to potential profitability pressures amid lower business volume and rising credit costs.

    By lowering interest rates, the central bank aims to support household income and domestic business finances, which have suffered from the coronavirus health crisis. The rate cuts will help loan repayment and debt affordability. However, because Polish banks are primarily deposit-funded, they have limited ability to fully pass on the lower interest rates to their customers to reduce their funding costs. Therefore, the sector’s relatively good net interest margins will, like euro area peers, be significantly pressured.

    The country’s leading banks announced the lower rates’ sizeable effect on their income statement

    Bank Polska Kasa Opieki S.A (PEKAO, A2 stable, baa11), the country’s second-largest bank, said that it expects the new lower rate to reduce its net profit by PLN650-PLN700 million, shaving off around 45 basis points from its net interest margin of 2.80% as of year-end 2019. The reduction equates to approximately 23% of its 2019 pre-tax profit.

    Powszechna Kasa Oszczednosci Bank Polski S.A. (PKO BP, A2/A3 stable, baa2), the largest bank, said that it expects 2020 net profit to decline by PLN750-PLN800 million, which accounts for around 8% of 2019 net interest income and 14% of pre-tax profit. According to our estimates, this would reduce the bank’s net interest margin to around 2.90% from 3.16% at year-end 2019.

    Poland’s third largest bank, Santander Bank Polska S.A. (A2/A3 stable, baa2) said that it expects the rate cuts to shave PLN635-PLN700 million off its net interest income, or approximately 10% of 2019 net interest income. According to our estimate, keeping all else constant, the decline in net interest income would reduce the bank’s pre-tax profit by about 20% and its net interest margin to around 2.90% from 3.23% as of year-end 2019.

    The rate cuts add to the pressure on the banks’ profitability. All three banks reported a significant 20%-50% reduction in profit for the first quarter of 2020 because of significantly higher credit costs tied to the coronavirus pandemic and resulting recession.

  • EU Member States spent €301 billion altogether on family benefits

    EU Member States spent €301 billion altogether on family benefits

    The 27 EU Member States spent €301 billion altogether on family benefits in 2017 (2.3% of EU GDP), Eurostat data shows.

    This represented 8.6% of the total spent on social protection benefits.

    The share of social protection expenditure on family benefits varied significantly between EU Member States. It accounted for more than 15% of total social benefits only in Luxembourg (15.3%), followed by Poland (13.4%) and Estonia (13.1%).

    The lowest shares were registered in the Netherlands (4.2%) and Portugal (4.9%).

    The annual family benefits expenditure per inhabitant, highest in Luxembourg, lowest in Romania

    The annual family benefits expenditure per inhabitant was also highest in Luxembourg (€3,100 per inhabitant), followed by Denmark (€1,700), Sweden (€1,400), Germany (€1,300) and Finland (€1,200).

    Eurostat noted that the value is overestimated for Luxembourg compared with other countries, as a significant proportion of benefits are paid to persons living outside the country.

    In 2017, three countries had family benefits expenditure below €200 per inhabitant: Romania (€100), Bulgaria (€130) and Lithuania (€180).

  • Quarterly GDP in Serbia increased by 5%

    Quarterly GDP in Serbia increased by 5%

    The real GDP growth in the first quarter of 2020, compared to the corresponding period of the previous year, amounted 5.0%, latest Statistical Office of the Republic of Serbia data shows.

    According to seasonally adjusted GDP data, gross domestic product decreased by 0.6% in the first quarter of 2020, compared to the previous quarter.

    Observed by activities, in the first quarter of 2020, compared to the same quarter of the previous year, significant real growth in the gross value added was recorded in the section of construction – 19.6%, the section of information and communication – 11.8%, the section of public administration and defence; compulsory social security; education and human health and social work activities – 11.8% and the section of industry and water supply, sewerage, waste management and remediation activities – 4.5%.

    Observed by expenditure aggregates, in the first quarter of 2020, compared to the same quarter of the previous year, real growth was noted as follows:

    • the household final consumption expenditure – 3.2%,
    • the nonprofit institutions serving households (NPISH) final consumption expenditure – 3.4%,
    • the general government final consumption expenditure – 12.0%,
    • gross fixed capital formation – 10.7%,
    • the exports of goods and services – 3.1%,
    • and the import of goods and services – 8.3%.
  • Hungarian GDP rises by 2.2% in the 1st quarter of 2020

    Hungarian GDP rises by 2.2% in the 1st quarter of 2020

    Gross Domestic Product was 2.2% higher in Hungary in the 1st quarter of 2020 than in the corresponding period of the previous year, KSH latest data shows.

    The corona virus pandemic had a negative impact on the performance of most sections, but market services and, to a lesser extent, industry continued to be the driving forces for growth in the 1st quarter as a whole.

    According to seasonally and calendar adjusted and reconciled data the performance of the economy was up by 2.0% compared to the corresponding quarter of the previous year and decreased by 0.4% compared to the previous quarter.

    Industry went up by 1.7%

    The performance of industry went up by 1.7%, within which that of manufacturing by 1.3% compared to the same period of the previous year.

    Among manufacturing branches, the largest contributors to the growth of industry were the manufacture of electrical equipment and the manufacture of computer, electronic and optical products.

    The value added of construction increased by 3.0%. The performance of agriculture decreased by 0.6% compared to the corresponding period of the previous year.

    The gross value added of services was up by 2.4% in total, the highest growth (8.8%) was reached by information and communication. The value added of wholesale and retail trade and accommodation and food service activities as well as professional, scientific, technical and administrative activities equally rose by 5.0%.

    The performance of financial and insurance activities went up by 4.4%. The total value added of public administration, education and health decreased by 2.8%.

    Services contributed by 1.2 percentage points, industry by 0.4 percentage point and construction by 0.1 percentage point to the 2.2% rise of gross domestic product in the 1st quarter of 2020. 

  • 88.9% less arrivals of visitors from abroad to Bulgaria in April

    88.9% less arrivals of visitors from abroad to Bulgaria in April

    In April 2020, the collapse of the trips of Bulgarian citizens abroad and the visits of foreigners to Bulgaria continued due to the suspension of international flights and the closure of the land borders because of the worldwide spread of the COVID-19 coronavirus.

    In April 2020, the number of the trips of Bulgarian residents abroad was 75.3 thousand, or by 87.9% under the registered in April 2019. In comparison with March 2020 the trips of Bulgarian residents abroad declined by 67.4%.

    In April 2020, the number of arrivals of visitors from abroad to Bulgaria was 81.2 thousand or by 88.9% less in comparison with April 2019. Compared to March 2020, the drop was by 74.1%.

    A collapse in the trips with all observed purposes was registered: ‘holiday and recreation’ – by 99.8%, ‘professional’ – by 84.5% and ‘others’ (including as guest and passing transit) – by 80.6%.

    Transit passes through the country were 62.9% (51.1 thousand) of all visits of foreigners to Bulgaria.

    The share of visits of ЕU citizens was 34.5% of the total number of foreigners’ visits to Bulgaria in April 2020 or by 93.1% less in comparison with the same month of the previous year. A drop in the visits of citizens from all observed countries was registered.

    The visits of foreigners in the group ‘Other European countries’ decreased by 81.5%.

  • Polish GDP increased by 2% in the 1st quarter of 2020

    Polish GDP increased by 2% in the 1st quarter of 2020

    Gross domestic product (GDP) in the 1st quarter of 2020 was higher by 2.0% year-on-year comparison against 4.8% in the correspording quarter of 2019, latest Central Statistical Office (GUS) data shows.

    In the 1st quarter of 2020 seasonally adjusted gross domestic product (GDP) (constant prices, reference year 2010) was lower by 0.4% than in the previous quarter and 1.7% higher than in the 1 st quarter of the previous year.

    In the 1st quarter of 2020 the economic growth came mainly from domestic uses which growth was 1.7% compared to the previous year. It was higher than in the 4th quarter of 2019 (the growth 1.3%).

    It resulted from the increase in gross capital formation by 0.7% (against the decrease by -3,6% in the 4th quarter of 2019).

    Final consumption expenditure increased by 1.8% and was lower than recorded in the 4th quarter of 2019 (the increase by 3.2%). Consumption
    expenditure in the households sector rose by 1.2% and was lower than in the 4th quarter of 2019 (the growth of 3.3%).

    The growth rate of gross fixed capital formation was lower than in the 4th quarter of 2019 and amounted to 0.9% (against 6.1%).

  • Austria: Number of overnight stays in April dropped by 96.5%

    Austria: Number of overnight stays in April dropped by 96.5%

    According to preliminary data by Statistics Austria, the number of overnight stays in April 2020 dropped by 96.5% or 7.92 million compared to April 2019 to 287 000.

    Due to the shutdown of accommodation establishments and border closings since mid of March 2020 almost no overnight stays were registered in the last one and a half months of the 2019/20 winter season.

    The number of overnight stays for the entire winter season 2019/2020 (November to April) fell by 18.1% to 59.72 million and corresponds to the overnight stay volume of the 2006/07 winter season with 59.38 million overnight stays.

    The number of nights spent in the current calendar year 2020 (January to April) decreased by 24.9% to 42.30 million, the number of arrivals by 31.9% to 9.97 million.

  • G20 fiscal packages to fight the coronavirus crisis exceeds $4,68 trillion

    G20 fiscal packages to fight the coronavirus crisis exceeds $4,68 trillion

    Data gathered by Buyshares.co.uk indicates that the cumulative fiscal package to the Coronavirus pandemic by G20 member countries is $ 4.68 trillion.

    The fiscal package is not final because the COVID-19 pandemic is yet to be contained fully.

    Japan has the highest fiscal package

    Japan has the highest fiscal response to the pandemic at $996.45 billion which is 19.5% of the country’s $5.110 trillion GDP. The United States package stands at $562.1 billion, representing 11% of the $21.2 trillion GDP. Australia with a GDP of $1.45 trillion has a fiscal response of $495.67 billion.

    Canada’s fiscal response is $429.24 billion, representing 8.4% of the country’s $2.8 trillion GDP. Brazil is fifth with a fiscal response package of $332.15 billion or 6.5% of the country’s GDP of $2.02 trillion.

    Other G20 countries with notable responses to the current pandemic include Poland ($316.82 billion), Germany ($250.39 billion), France ($204.4 billion), China ($194.18 billion), and Saudi Arabia ($163.52 billion) and the United Kingdom ($153.3 billion). South Africa has the least fiscal response of $5.11 billion which is only 0.1% of the $350 billion GDP.

    Buyshares.co.uk’s research also overviewed the size of fiscal packages announced by G20 countries in response to the financial and COVID-19 crisis in 2009 and 2020. Japan’s fiscal response to the financial crisis was 2.2% of the GDP compared to the Coronavirus crisis which is 19.5% of the GDP.

    The United States’ fiscal package to the financial crisis and COVID-19 was 11% and 5.9% of the GDP respectively. Australia’s response to the current pandemic is 9.7%  of the GDP while for the financial crisis the rate stood at 1.8%.

    Elsewhere, Canada’s response to the pandemic represented 8.4% of the GDP while in 2009, such a fiscal response was 2.8% of the GDP. For Brazil, the fiscal package released to mitigate the financial crisis in 2009 represented 0.5% of the GDP compared while theCovid -19 management package represents 6.5% of the GDP.

  • Pandemic pushes US personal spending to record decline since 1959

    Pandemic pushes US personal spending to record decline since 1959

    Research by Finbold.com shows that the United States’ personal spending has significantly dropped by 7.5 percent monthly.

    Data obtained indicate that between March and February this year, the US personal spending registered its worst figure since 1959.

    Personal spending to improve in mid-2021

    From the data, personal spending in the US increased by 0.2 percent in February compared to January this year. The decline has been attributed to the Coronavirus pandemic that peaked between March and April. According to our research report:

    This massive drop represents the largest decline in personal spending on record, which means since 1959. There was no crisis during the last 60 years that affected in such a negative way the personal spending of U.S. families.

    The report further indicates that personal spending in the US is projected to drop by 2 percent by the end of this quarter. Further projections indicate that personal spending in the U.S. could stand at 0.50 in the next 12 months. By mid-2021 the situation will start improving with personal spending moving towards 0.70 percent.

    The U.S. Personal spending is measured by the Personal consumption expenditures (PCE) index, which takes into account how much of the income earned is spent by U.S. families.

    Global economies have been impacted by the Coronavirus and the United States has not been spared either. Several states have imposed lockdowns to curb the spread of the Coronavirus.

  • Slovakia: Total number of visitors decreased by 65% in March

    Slovakia: Total number of visitors decreased by 65% in March

    In March 2020, 151.930 persons stayed in the tourism accommodation establishments in the Slovak Republic, two thirds of which were domestic visitors.

    The sharp decline in the number of guests and the number of overnight stays was the result of an emergency situation caused by the coronavirus.

    The number of overnight stays reached 515.914, of which overnight stays by domestic visitors accounted for more than 70 %.

    Compared to the same period last year, the total number of visitors decreased by 65 %, of which domestic visitors  decreased by 63,9 % and foreign ones by 66,9 %. The number of overnight stays was lower by 56 % year-on-year.

    During March, visitors spent an average of 3,4 nights in the accommodation establishments, including  domestic visitors 3,6 nights and foreign ones 2,9 nights.

    The most visited region was the Žilinský kraj, the total number of accommodated persons was almost 38 thousand, visitors spent the most nights in it, almost 126 thousand.

    Domestic visitors went mainly to the Žilinský and Prešovský kraj, in both regions their number exceeded 23 thousand and the number of overnight stays 80 thousand.

    The highest number of foreign visitors (16,9 thousand) visited the Bratislavský kraj, but they spent the most nights in the Žilinský kraj, where the number of overnight stays of foreign visitors exceeded 45 thousand.

  • 82% of respondents at a study have overdue debts to the state budget

    82% of respondents at a study have overdue debts to the state budget

    The vast majority (82%) of respondents to a survey conducted by PwC Romania have unpaid debts related to the main budgetary obligations due on 31 March and qualify to apply for the tax amnesty regulated by Government Emergency Ordinance no. 69/2020. The survey was conducted during an online event attended by 104 representatives of companies.

    When asked whether they have unpaid ancillary budgetary obligations related to main budgetary obligations due on 31 March 2020, the respondents answered as follows: 32% have such obligations that they declared and have not yet paid, 32% have such obligations established by a tax decision communicated by 31 March 2020, 18% have these obligations set by an amending declaration filed as of 1 April 2020 and 18% have obligations paid by that date, but late in maturity.

    Consequently, it is expected that those who submit the cancellation request by 15 December 2020 will benefit from the cancellation of the accessories and clear both the main outstanding tax obligations as of 31 March 2020, as well as the main tax obligations and accessories with a maturity of 1 April 2020 and the date of submission of the application for cancellation.

    Accessories related to the differences between main fiscal obligations due on 31 March 2020 and those imposed by communicated taxation decisions following tax inspections ongoing as at the date of entry into force of the normative act are also cancelled.

    In the survey, 53% of respondents said they have due claims for the period up to 31 March for which they intend to file tax returns or tax returns.

    At the same time, 92% expect to establish differences in additional tax obligations prior to the period until 31 March 2020 in a tax inspection or verification of personal situation.