STUDIES | MACRO

Allianz Research
THE BEST IS YET TO COME: A COMPARISON OF SAVINGS ACROSS COUNTRIES AND GENERATIONS IN THE EUROZONE
Despite the crises, private households in the nine Eurozone countries we analyze have managed to almost double their total financial assets over the last two decades. However, the composition of growth differs significantly between countries. The rather risk-averse German savers, for example, increased their financial wealth almost exclusively through high savings efforts, while in Finland and the Netherlands, the lion’s share of the increase in wealth was attributable to value gains – accompanied by above-average growth rates. >more

Deutsche Bank Research
EUROPEAN BANKS MAKE SOME PROGRESS IN DIVERSIFYING THEIR SOVEREIGN EXPOSURES
In the European Economic and Monetary Union, banks' holdings of sovereign debt remain in focus, not least because of the ECB accelerating the reduction of its sovereign bond portfolio this year. Quantitative tightening at a time of significant public-sector refinancing needs requires other investors to pick up the baton. Will banks resume their traditional role as anchor investors? Or will they remain reluctant to increase their holdings, as they were in 2023? Moreover, differences in the sovereign exposures across national banking sectors – especially with regard to “home bias” – have been an obstacle to completing the Banking Union with a European Deposit Insurance Scheme (EDIS), and thus continue to receive attention from policymakers. The good news, as we show in this report, is that European banks in aggregate made some progress in 2023 toward diversifying their claims on governments. >more

Institut der deutschen Wirtschaft (IW)
ANALYSE ASYMMETRISCHER PREISENTWICKLUNGEN IM WOHNIMMOBILIENMARKT
This article evaluates the structural composition of real estate price trends in 70 major cities in Germany for the period 2015 to 2023. To this end, so-called convergence clubs of urban housing markets are identified for three submarkets of the housing market. >more

Fraunhofer ISI
KRITISCH FÜR DIE WERTSCHÖPFUNG – ROHSTOFFABHÄNGIGKEIT DER DEUTSCHEN WIRTSCHAFT
The future-proof positioning of Germany's supply of mineral raw materials is central to securing the country as a business location. Security of supply of these raw materials is particularly relevant for future technologies and to limit potential supply risks that could have a negative impact on dependent sectors of the economy. This involves the entire value chain from production to recovery. Raw materials are also imported already processed into goods and play a role here. A study commissioned by KfW Research and carried out by IW Consult and Fraunhofer ISI analyzes the raw material-related value creation and supply risks along the production and supply chains for the raw materials copper, lithium and the group of rare earths. >more

KfW Research
DIE BETROFFENHEIT VERSCHIEDENER GRUPPEN MITTELSTÄNDISCHER UNTERNEHMEN VON DEN AUSWIRKUNGEN DER CORONA-PANDEMIE UND DEREN ERHOLUNG
The study examines which groups of SMEs were hit hard by the coronavirus pandemic and how quickly they recovered from the effects of the pandemic. The key finding of the study is that even companies considered to be high-performing often suffered losses in turnover. However, they recovered more quickly than other companies. This applies in particular to companies with a good credit rating as well as innovative companies and those active in digitalization. The financial performance of SMEs was hardly affected by the pandemic. >more

PwC
WOHNUNGSNOT UND DIE FOLGEN FÜR DEN ARBEITSMARKT
Good job opportunities, short distances, attractive cultural offerings and shopping facilities: Germany's major cities are good places to live and work. Around nine out of ten working people feel comfortable in their place of residence. Actually - because one aspect is a constant source of frustration in Germany's metropolitan areas: the tense situation in the housing sector - and this has far-reaching effects on the job market, as one in three has already thought about changing jobs because rents are too high. This is making it increasingly difficult for employers in conurbations to find and retain skilled workers. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: MARCH 2024
The central theme of the review period was the waxing and waning of financial markets' optimistic expectations over the policy outlook. Until late December, financial conditions continued to ease, driven by investors anticipating looser policy in the near term. Since January, financial conditions firmed and tightened, as central bank communication pushed back against such expectations and data releases pointed at more stubborn inflation pressures. Sovereign bond yields declined on balance during the period, while valuations of risky assets generally rose. Supported by resilient risk sentiment, emerging market economies (EMEs) experienced bond inflows, and (except China) their stock markets extended gains. >more

Allianz Research
TRUMPONOMICS: THE SEQUEL
In this report, we look at what the return of President Trump could mean for growth, inflation and capital markets, as well as trade, fiscal and industrial policies. So far, several of Trump’s campaign pledges have raised far-reaching questions especially for the transatlantic partnership: from the resolution of the war in Ukraine, to the US exiting (again) the Paris Accord, to an escalation of the US-China Cold War. Narrowing down on economic policy-making, we analyzed three fault lines: (i)  the return of trade war, with the alleged plan to increase tariff rates to 10% and unleash industrial subsidies to re-shore production in the US; (ii) the fiscal bazooka that could ensue after the elections, given the 2017-2019 playbook, and the return of dirigisme everywhere – in contrast with Biden’s promised fiscal cliff – and (iii) the conduct of a credible monetary policy. >more

BCG
WHICH ECONOMIES BENEFIT THE MOST FROM FREE TRADE AGREEMENTS?
In an era of global economic uncertainty and increasing protectionist sentiment, governments are relying more and more on specialized trade strategies to grow and diversify trade and secure a competitive advantage in end markets. As the WTO struggles to conclude a new round of multilateral liberalization, governments are increasingly turning to bilateral and regional free trade agreements (FTAs) as a means of achieving their different strategies and objectives. But not all FTAs are created equal, and with the stakes so high, it is fair to ask whether the growing number of FTAs are helping private- and public-sector organizations achieve the much-vaunted benefits. To obtain a view of the different approaches to FTAs and their impacts on competitive outcomes, Boston Consulting Group has analyzed the free trade agreements of over 100 economies and major trade blocs. >more

Deutsche Bank Research
EIN BALANCEAKT
Global growth expected at 2.9% in 2024, rising to 3.2% in 2025. We no longer expect a recession in the US & the EU. Inflation possibly peaked, yet upside risks persist due to ongoing price pressures. Geopolitical risks elevate supply chain vulnerabilities, particularly in the Red Sea, Middle East and Ukraine. Intensifying US-China competition adds to the challenges. In 2024, around half of the world's population will be heading to the polls including the US (Nov), India (Apr/May), and the EU (Jun). >more

Oliver Wyman
THE NEW MONETARY ORDER: EUROPEAN PERSPECTIVES 2024
In Europe, bank balance sheets remained stable and de-risked and return on assets declined, impacting bank profitability. Non-bank financial institutions assumed a more important role as financers, gaining market share in lending from banks and holding the riskier (and more profitable) part of the assets. Central bank balance sheets quadrupled, and governments took advantage of low rates to raise record levels of debt to fund reforms, social expenditures, and economic stimulus measures needed to navigate multiple crises. >more

Deutsche Bank Research
WIRTSCHAFTLICHES UMFELD 2024: NICHT GÜNSTIG
At the start of the year, the German economy is probably in a technical recession. In view of the adverse economic conditions, little momentum is likely to develop over the course of the year. Only private consumption offers glimmers of hope thanks to strong wage growth combined with falling inflation rates. >more

Deutsche Bank Research
DEUTSCHLAND-MONITOR BAUFINANZIERUNG Q1/2024
Germany is in recession. After the 0.3% decline in GDP in 2023, we expect a further decline of 0.2% in 2024. We expect structural factors to keep inflation above 2%, which is why Bund yields and mortgage rates should rise again in the course of 2024. By the end of 2024, we expect 5-10 year mortgage rates to rise again to 3.8%. Housing supply is likely to remain tight for years, if not the entire decade. In Q1 2024, the affordability index should fall due to the fall in interest rates and affordability should therefore increase. >more

Deloitte
KAPITAL FÜR DIE ENERGIEWENDE
The German energy industry is facing huge investments: More electricity generation from renewable energies, expansion and digitalization of the electricity grid, new infrastructure for e-cars and district heating and, last but not least, ensuring supply during dark doldrums. A position paper prepared jointly by Deloitte, the German Association of Energy Industries (BDEW) and the Association of Municipal Enterprises (VKU) with the support of Die Deutsche Kreditwirtschaft (DK) outlines ways out of the financing dilemma. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: DECEMBER 2023
Bond markets remained volatile, with yields oscillating on evolving investor perceptions of the future path of policy interest rates; announcements of sovereign debt issuance also played a role. Risky asset markets lost ground before recovering, following the path set by bond yields, while conditions in credit markets remained benign. EME financial markets grappled with swings in US yields and changing pressures on domestic currencies. Portfolio outflows continued, reflecting a divergence in expected interest rate paths. >more

FTSE Russell
THE COP28 NET ZERO ATLAS
Our third annual Net Zero Atlas provides an updated analysis of G20 countries’ climate targets, mitigation strategies, and physical risk exposures. The report outlines a refreshed evaluation of the ‘temperature alignment’ of national climate commitments and actions for G20 countries. Critically it includes expanded analysis that considers the latest physical impacts of climate change on G20 countries and systematically assesses their approaches to adaptation planning.  >more

Institut für Mittelstandsforschung
ANALYSE ZUR BÜROKRATIEBELASTUNG IN DEUTSCHLAND – WIE KANN EIN SPÜRBARER BÜROKRATIEABBAU ERREICHT WERDEN?
This study examines the current bureaucratic burden on companies from a holistic, process-oriented (model) perspective - the so-called regulatory cycle. Based on quantitative company survey, an international comparison and an analysis of the literature, a holistic action plan is developed for the perceptible reduction of the bureaucratic burden. >more

Institut für Makroökonomie und Konjunkturforschung
IMK KONJUNKTURINDIKATOR: REZESSIONSGEFAHR BLEIBT HOCH
The probability that the German economy will be in recession in the next three months has risen slightly in recent weeks and stands at 75.9% at the beginning of November after 73% in the previous month. The forecasting uncertainty is currently 15.5%, down from 18.9% in the previous month. Against the backdrop of these barely changed results, the economic traffic light remains red (acute risk of recession). >more

Lazard
GLOBAL OUTLOOK 2024
Disinflation is underway and developed market central banks have likely finished their rate hike cycles. The United States is entering 2024 in a good position. The question is when — and how quickly — will inflation fall low enough for the Fed to begin policy easing? China sentiment is improving, despite the ongoing issues with housing and consumer confidence. In the second half of 2023 alone, the authorities launched dozens of measures to prop up the economy. >more

Goldman Sachs
MACRO OUTLOOK 2024: THE HARD PART IS OVER
Goldman Sachs Research expects several tailwinds to global growth in 2024, including strong real household income growth, a smaller drag from monetary and fiscal tightening, a recovery in manufacturing activity, and an increased willingness of central banks to deliver insurance cuts if growth slows. >more

International Monetary Fund
GLOBAL FINANCIAL STABILITY REPORT
With core inflation still high and declining only slowly in many advanced economies, central banks may need to keep monetary policy tighter for longer than is currently priced in markets. In emerging market economies, progress on lowering inflation appears to be more advanced, with the benefits of early rate hikes becoming apparent. However, there are discrepancies across regions. Widening divergence of inflation and economic outlook could mark the beginning of the desynchronization of the global monetary policy. >more

International Monetary Fund
WORLD ECONOMIC OUTLOOK
The baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent. Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024. Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international commodity prices. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases. >more

Deutsche Bank Research
DEUTSCHLAND-MONITOR BAUFINANZIERUNG Q4/2023
Germany is in recession. Following the 0.5% drop in GDP from Q3 2022 to 02 2023, we expect a 0.3% quarter-on-quarter decline in Q3. We expect high inflation of 2.5% in 2024 and 2.4% in 2025. 5-10-year mortgage rates climbed from around 1.2% in December 2021 to 3.8% in September 2023, and we expect sideways movement through year-end 2024. Housing supply is likely to remain tight for years, if not the entire decade. We expect affordability to run sideways due to stable interest rates. >more

ifo Institut
EINE HALBZEITBILANZ – SO BEWERTEN ÖKONOMINNEN UND ÖKONOMEN DIE WIRTSCHAFTSPOLITIK DER AMPEL-KOALITION
The 44th Economists' Panel of ifo and FAZ is dedicated to the current economic policy debates in Germany. It focuses on the economic policy plans of the German government in various areas ranging from energy and income to the legalization of cannabis. 205 economics professors took part in the survey. With an average grade of 4.0, they gave the German government's economic policy a mixed review. With regard to energy policy, the proposal for an industrial electricity price, the "heating law" and the final phase-out of nuclear power are rejected by a large majority. While the sharp increase in the citizen's allowance is also rejected, the moderate increase in the minimum wage receives majority support. The reform of parental allowance and the legalization of cannabis split the profession. >more

Institut der deutschen Wirtschaft
GRÜNDE FÜR DEN STARKEN ANSTIEG DER ZINSAUSGABEN BEIM BUND
The turnaround in interest rates is leaving an unmistakable mark on public budgets. The extent to which this is restricting the scope for action can be seen in the interest-tax ratio. In the course of the zero interest rate phase, interest expenditure as a proportion of tax revenues had fallen as low as never before. Now the figure is rising again - at a much higher rate at the federal level than at the state level. >more

Bridgewater
BREAKING DOWN THE SOURCES OF US ECONOMIC RESILIENCE
One way to understand how the cycle is playing out is by breaking down the spending in the economy into its sources: incomes, borrowing, and changes in saving. Private sector borrowing has been crushed by the tightening and households have stopped reducing their savings, but strong income growth has outweighed these drags and will likely take more than just the tightening to date to crack. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: SEPTEMBER 2023
With the end of the hiking phase in sight, investors focused on macroeconomic developments during the review period, while staying attuned to their policy implications. Government bond yields rose in advanced economies (AEs), with term structures reflecting increasingly diverse economic outlooks. Despite a spell of de-risking in August, risk-taking was generally resilient, including in emerging market economies (EMEs). Notable differences marked the evolution of government bond yields in China, the euro area and the United States. While US long-term yields reached highs not seen since before the Great Financial Crisis, such yields barely rose in the euro area. >more

Allianz Research
GERMANY NEEDS MORE THAN A PLAN
Germany is the only major economy that looks set to contract in 2023, with headwinds such as slowing demand for its exports (particularly highly cyclical goods such as cars, machine tools and chemicals), lopsided global growth in services over goods, the industry slowdown in the US and China and an inventory correction. Even if the government's economic plan is a step in the right direction, and will give growth a small boost, it is too small to restructure a EUR4trn economy. Germany struggles with structural challenges, including labor shortages, high energy costs, elevated regulatory and tax burdens, slow digitization and policy uncertainty. To address these, Germany needs measures that strengthen its position as a place to innovate, invest and create high-value jobs. While the government must create favorable conditions, companies also need to take countermeasures and actively implement the green and digital transition. >more

Goldman Sachs
HOW QUANTIFYING AVOIDED EMISSIONS CAN BROADEN THE DECARBONIZATION INVESTMENT UNIVERSE
ESG ownership continues to be largely concentrated in a subset of more-obvious pure play solution providers, mainly solar, wind and water. However, GS Research analysis suggests that since 2010, energy efficiency has helped to reduce 50% more carbon emissions than renewables generation additions. In this report, GS Research discusses how incorporating avoided emissions into investment decisions could help identify underappreciated enablers in the ecosystem of green solutions. >more

Institut der deutschen Wirtschaft
KONJUNKTURPROGNOSE: DEUTSCHLANDS WIRTSCHAFTSLEISTUNG SCHRUMPFT 2023
The German economy is in a state of shock: Because German companies are particularly affected by global fluctuations, they are feeling the global problems all the more acutely this year. Raw materials and energy are scarce and expensive, global trade is limping along and demand is lower than usual. As a result, global production is expected to grow by only 2 ½ percent in 2023 - around one percentage point less than the average of recent decades. For Germany, the IW forecasts that real GDP will be almost ½ percent lower than in the previous year. >more

Bain & Company
GLOBAL RECESSION WATCH: JUNE 2023
The world remains in a period of immense economic uncertainty, with the consensus shifting rapidly in global markets. Economist polls have suggested the likelihood of a recession in the US and eurozone for nearly a year. The question of whether the US will fall into a recession remains open. The US 10-year minus 2-year Treasury yield spread has been inverted since July 2022, which is typically indicative of a recession within 12 months. Inflation in the US nearly reached the heights of the early 1980s, peaking at 9.1% year over year (YOY) in June 2022, then falling to 3% in June 2023. >more

IfW Kiel
GERMAN REAL ESTATE INDEX Q2 2023: IMMOBILIENPREISE IN DEUTSCHLAND STABILISIEREN SICH
The downward trend in real estate prices in Germany came to a partial halt in the second quarter of 2023. Compared with the first quarter of 2023, many prices are even rising slightly again, although there is still a significant decline compared with the previous year and the highs. This is shown by the latest update of the German Real Estate Index (GREIX), a project of ECONtribute and IfW Kiel, which evaluates the actual sales prices of German real estate according to the latest scientific standards. >more

DIHK
DIHK-REPORT UNTERNEHMENSGRÜNDUNG 2023
Fewer and fewer people in Germany want to start a business. For 2022, the chambers of industry and commerce are once again reporting a decline in the number of information and advice sessions on setting up a new business. The number of talks fell by three percent compared to the previous year, reaching a low of 154,785 in the census conducted since 2002. >more

BNP Paribas
MID-YEAR UPDATE – GETTING THE YIELD CURVE WRONG
Many investors have been puzzled for most of this year by an inverted US yield curve, which along with economist forecasts and CEO surveys signals an impending recession. At the same time, the performance of risk assets suggests a much brighter outlook. Which is right and which is wrong? >more

Deutsche Bank Research
IS DISINFLATION DIFFERENT THIS TIME AROUND?
Over the past year, the view that a recession would be needed to enable the Fed to achieve its firm target of returning inflation to 2% has gone from long shot to consensus view to, essentially, a coin toss. In their recent US Economic Perspectives report, Deutsche Bank Research attempts to answer the question: Recession or soft landing: Is disinflation different this time? >more

Bank for International Settlements
THE CRYPTO ECOSYSTEM: KEY ELEMENTS AND RISKS
This report reviews the key elements of the crypto ecosystem and assesses their structural flaws. There are three main takeaways. First, due to underlying economic incentives, the crypto ecosystem is characterised by congestion and high fees, which lead to fragmentation. Second, despite an original ethos of decentralisation, crypto and decentralised finance (DeFi) often feature substantial de-facto centralisation, which introduces various risks. Third, while DeFi mostly replicates services offered by the traditional financial system, it amplifies known risks. Moreover, as DeFi does not finance activity in the real economy, its growth is driven by the speculative influx of new users, with substantial risks to investors. The report outlines policy options to mitigate the multiple risks crypto poses to investors, the traditional financial system and the economy at large. >more

Deutsche Bank Research
EUROPÄISCHE AUTONOMIE IM ZAHLUNGSVERKEHR: DER DIGITALE EURO IST NICHT DIE EINZIGE OPTION
In order to strengthen its strategic autonomy, the EU is pushing for a European offering for retail payment traffic. One private-sector and one public-sector project are currently being driven forward. While the European Payments Initiative (EPI) builds on the existing infrastructure for real-time payments and its digital wallet is scheduled to be launched early next year, the legal and technical foundations for the digital euro are still being developed. As both solutions could easily cannibalize each other, Europe would benefit from better coordination. >more

Institut der deutschen Wirtschaft (IW)
DEINDUSTRIALISIERUNG. EINE ANALYSE AUF BASIS VON DIREKTINVESTITIONEN
Never before have companies withdrawn so much money from Germany as they did last year, a new study by the Institute of the German Economy (IW) shows. The figures are alarming: Around $132 billion (125 billion euros) more direct investment flowed out of Germany in 2022 than was invested in the Federal Republic in the same period. In the worst case, this is the beginning of deindustrialization. >more

Lombard Odier
DER WEG ZU EINEM SCHWÄCHEREN US-DOLLAR IST HOLPRIG
Due to the unexpectedly robust U.S. economy, the expected timing of a recession is shifting further and further back. This has supported the US dollar in recent months. However, we expect the dollar to weaken against major currencies such as the euro, the Japanese yen and the Swiss franc by the end of 2023. >more

Bank for International Settlements
BIS RESIDENTIAL PROPERTY PRICE STATISTICS, Q4 2022
At the end of 2022, global house prices fell in real terms for the first time in 12 years, by 2% year on year (yoy) in aggregate. This reflected a moderation in nominal house prices, which are now growing less rapidly (+6% yoy) than consumer prices. The decline in real house prices was particularly marked in advanced economies (AEs) (–2.7% yoy), contrasting with the previous quarter's increase. Prices continued to fall in emerging market economies (EMEs) (–1.5%). Important differences remain across major economies. For instance, real house prices surged in Türkiye (51%) and grew more modestly in Japan (+4%), but were flat in the United States and declined by 10% or more in Germany, Australia and Canada. >more

Goldman Sachs
DAUNTING DEBT LIMIT DYNAMICS
Concerns about a failure to raise the US debt limit have subsided, but this chapter will still go down in history as just one in a growing line of contentious debt limit episodes in recent decades. Whether this repeated brinkmanship around raising the debt limit could ultimately undermine the value proposition of U.S. assets is Top of Mind. >more

EY
STANDORT DEUTSCHLAND 2023
Foreign investors again slightly reduced their involvement in Germany last year: The number of investment projects announced by foreign companies in Germany fell by 1% year-on-year to 832, the lowest level of foreign investment since 2013. Across Europe, a total of 5,962 investment projects were announced by foreign investors last year, an increase of 1%. However, this was still well short of the pre-pandemic level. Thus, the number of foreign investment projects was 7% lower than in 2019. >more

Deutsche Bank Research
2023 HOUSING MARKET OUTLOOK
The boom is over. Five key arguments lead us to expect only a price dip. Negative real interest rates, inflation protection through real estate, rising rental growth and most importantly a high fundamental supply shortage. In addition, real house prices have already fallen very sharply due to the surge in inflation. CO2 emissions from buildings are increasingly coming into focus. Prices have started to diverge between properties with low and high emissions. This divergence is likely to increase. >more

International Monetary Fund
WORLD ECONOMIC OUTLOOK: A ROCKY RECOVERY
The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 percent in 2023 with advanced economy growth falling below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflation’s return to target is unlikely before 2025 in most cases. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: MARCH 2023
Financial markets extended previous gains during the review period. As inflation readings gradually fell and the pace of policy tightening slowed early in the period, financial conditions eased and risky asset valuations generally rose on the back of perceptions of declining risks. Expectations of significant rate cuts in the near term appeared to firm up, despite cautious central bank communication about the policy outlook. The US dollar depreciated further, lending additional support to assets in emerging market economies (EMEs). Towards the end of the period, however, market developments proved sensitive to news that challenged investors' sanguine attitude. Investors' expectations about future policy rate paths stood in contrast to central bank communications. >more

Deutsche Bank Research
DEUTSCHLAND: KONJUNKTUR KURZGEFASST
The IMF has reduced its growth forecast for the global economy by 0.1 pp. to 2.8% (2023) and 3.0% (2024) respectively due to the recent turbulence in the banking sectors of some industrialized countries and persistently high inflation rates, which could make higher interest rates necessary for longer. Global inflation is expected to moderate slightly this year from 8.7% (2022) to 7.0%. In view of weaker growth in the labor force potential, geo-economic fragmentation (Brexit, US-China conflict, Russian invasion of Ukraine) and weakening supply-side reforms, the IMF expects a global growth rate of just 3.0% in 2028. This would slow medium-term growth by almost 2 percentage points within two decades. >more

Deutsche Bank Research
HOUSING MARKET COULD CREATE A CATCH-22 FOR THE ECB
In the boom years, investments in many German cities offered a net rental yield of roughly 3%, which was financed by a mortgage rate of 1%. This offered positive cash flow. Investors could easily leverage it to earn double-digit returns. Now, with mortgage rates clearly above 3%, the tide has turned. Let us assume 4% financing costs. If rents cannot be raised in the short run, prices will have to drop by 25% to raise rental yields back to break-even. Of course, even more substantial price drops will be necessary if investors expect positive cash flow.We already anticipated in spring 2021 that the housing boom in Germany would come to an end, expecting a modest market correction, discussing the risk of an interest rate shock, and often mentioning the advantages of available hedging instruments. Unfortunately, we were still surprised by the steepness of the interest rate hikes that have occurred since December 2021. >more

Bridgewater Associates
THE TIGHTENING CYCLE IS APPROACHING STAGE 3: GUIDEPOSTS WE’RE WATCHING
As economies have progressed through this tightening cycle, they have passed through two primary stages. First, when the markets recognized that MP3 policies had produced an overshoot with respect to spending and inflation, they discounted a coming tightening. Then central banks actually tightened. Second, as the tightening progressed, inflation peaked and then drifted lower. The markets discounted that the end was increasingly near and that within a few months we’d have 2% inflation and moderately positive growth, which would allow short-term interest rates to begin a steady two-year decline. We were in sync with the first stage of this cycle and out of sync with the second stage, mainly because we were looking ahead to the stage after that. Now we are approaching either the soft landing or the beginning of a third stage. Given current conditions and the cause/effect linkages, odds favor that there will be a third stage and that it will mostly likely take the form of an economic downturn. >more

World Bank Group
INTERNATIONAL DEBT REPORT 2022 : UPDATED INTERNATIONAL DEBT STATISTICS
International Debt Report (IDR), formerly International Debt Statistics (IDS), is a longstanding annual publication of the World Bank featuring external debt statistics and analysis for the 121 low- and middle-income countries that report to the World Bank Debtor Reporting System (DRS). The content coverage of IDR 2022 includes: 1) analyses of external debt stock and flows from 2010 to 2021 for these countries, 2) an assessment of the evolution of the creditor composition of external debt over the past decade with particular emphasis on the emergence of non-traditional bilateral creditors and private creditors and how this has impacted the structure of borrowers’ public debt portfolios and debt servicing costs which complicate the debt restructuring process. >more

European Central Bank
FINANCIAL STABILITY REVIEW
The November 2022 Financial Stability Review (FSR) sets out how the deterioration in economic and financial conditions has increased the risks to euro area financial stability. This year has seen notable declines in financial asset prices across many regions and asset classes, an increase in market volatility and, at times, strained market liquidity. Sharp asset price movements have also triggered unexpectedly large margin calls for some market participants, notably non-financial corporations and non-bank financial institutions, testing their liquidity preparedness. These asset price shifts have reflected increasing uncertainty about what will be required of monetary policy to moderate inflation in advanced economies. >more

Vanguard
ECONOMIC AND MARKET OUTLOOK FOR 2023: BEATING BACK INFLATION
In our 2022 economic and market outlook, we outlined how we believed the removal of policy accommodation would shape the economic and financial market landscape. Policy has in fact driven conditions globally in 2022, one of the most rapidly evolving economic and financial market environments in history. But one fact has been made abundantly clear: So long as financial markets function as intended, policymakers are willing to accept asset price volatility and a deterioration in macroeconomic fundamentals as a consequence of fighting inflation. >more

Oliver Wyman
WÄRME- UND MOBILITÄTSWENDE BIS 2037 KOSTET 900 MRD. EURO
The energy transition in the heating and mobility sectors will be a financial tour de force: by 2037, investments totaling 900 billion euros will be needed to achieve complete independence from oil and gas imports. Over the next 15 years, this will require a massive expansion of wind power and photovoltaics as well as a significantly more efficient power grid. This is because the transformation of the energy supply from conventional to renewable coincides with a demand for electricity that is almost twice as high. In addition to the expansion of alternative generation capacities, investments must therefore be made in distribution grids, energy storage and intelligent consumption control. >more

KfW Research
KFW-IFO-FACHKRÄFTEBAROMETER DEZEMBER 2022
According to the new KfW-ifo Skilled Workers Barometer, a shortage of skilled workers hampered the business activities of 46% of companies at the beginning of the 4th quarter. The shortage of skilled workers has worsened compared with the previous year despite the Ukraine crisis. Skilled workers are lacking in all sectors of the economy, most frequently in the service sector, where almost half of companies are hampered by a lack of skilled workers. Open positions are now vacant for an average of 5 months. The time taken to fill vacancies is rising steeply. One reason for this is the weak growth in labor productivity. Labor productivity per employee has almost stagnated in the last 5 years. >more

The Oxford Institute for Energy Studies
WINTER IS COMING: CAN THE GERMAN INDUSTRY OVERCOME THE LOOMING GAS SCARCITY?
Germany has the largest industrial sector in the European Union, and the largest industrial gas consumption in Europe. It is by far the largest European importer of Russian gas, and the interruption of Russian deliveries has forced Germany to review its supply and demand outlook. Given that households and other smaller consumers are protected by European and German regulation, industrial customers are most likely to have to bear the brunt of a looming gas tightness this winter. This paper examines the situation of the German industry at the beginning of winter 2022/23. It discusses the role of gas in Germany’s industrial sector; provides an outlook on the gas supply situation for winter 2022/2023 as well as an overview of the current legal and institutional framework governing the gas emergency plan. >more