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Criat's latest analysis shows an increase in aggregated credit risk for the Nordics region following the bankruptcy of Swedish battery manufacturer - Northvolt. A number of companies and/or subsidiaries including Goldman Sachs, Volkswagen Group, Voltavision GmbH, BMW Group have reported taking a hit in excess of $2bn USD. Using Criat's Deep Credit Analytics can help credit and investment risk managers obtain actionable early warning signals and anticipate/better prepare for such instances.

It’s everywhere – the buzz about China’s latest stimulus package. As the world watches closely, China is taking bold steps to revitalise its economy after the long impact of COVID-19. The government has announced a massive $1 trillion package to stimulate growth, focusing on infrastructure, technology, and property markets. Major sectors like manufacturing and exports are targeted, with around $140 billion earmarked for tech advancements, and nearly $500 billion allocated to infrastructure projects aimed at modernising transportation and energy networks. What does this mean for global markets? China’s recovery could ease supply chain pressures, potentially boosting industries like electronics, raw materials, and energy worldwide. In fact, China’s increased demand for commodities may benefit countries heavily dependent on exports to China, like Australia and Brazil. However, the package has raised concerns too. Despite the bold measures, some economists worry about rising debt levels, as local governments are allowed to issue more bonds, pushing China's total debt over 300% of GDP. Moreover, China’s property sector, which accounts for roughly 30% of its economy, still faces severe risks. While the stimulus offers a temporary boost, the question remains – can it create sustainable growth or simply paper over deeper structural issues? What are your thoughts on China’s economic strategy?

Credit to Gareth NicholsonGareth Nicholson May 14, 2024 The Li Keqiang Index is an informal economic indicator named after Li Keqiang, the former Premier of China. He reportedly told a U.S. diplomat that official GDP numbers released by the Chinese government were "man-made" and therefore unreliable. Instead, he suggested focusing on three alternative indicators to gauge the real economic activity: https://lnkd.in/gREprqqD Li Keqiang suggested focusing on three alternative indicators to gauge the real economic activity: 1. Electricity Consumption – This measures the total amount of electricity used by businesses and households. It's a direct indicator of industrial and commercial activity since more production or service provision generally requires more power. 2. Rail Freight Volume – This tracks the total amount of goods transported via rail. It's a useful indicator of economic health because higher volumes of goods shipped indicate more robust production and consumption. 3. Loan Disbursements by Banks – This measures the amount of money lent by banks. Increasing loan disbursements suggest businesses and consumers are confident enough to borrow money, implying healthy economic activity. These three indicators, according to Li, were more reliable for assessing the speed and direction of economic growth in China, especially as they reflect the raw inputs and outputs of economic activity more directly than the more polished GDP figures. The Li Keqiang Index therefore provides a more unvarnished look at the undercurrents of the Chinese economy. Investors and analysts sometimes use this index as an alternative measure of Chinese economic health, particularly when there are doubts about the accuracy or completeness of official data. It's a practical example of using alternative or proxy data sets to understand a complex and often opaque economic landscape.

Our Chief Economist Beata Javorcik spoke with Raphael Minder of the Financial Times about our new regional growth forecast #EBRDrep, highlighting that inward #FDI from China to the EBRD regions picked up sharply in 2023. Last year the 36 countries in which the European Bank of Reconstruction and Development operates — ranging from Poland to Mongolia in the east and from Morocco to Turkey in the south — received just under 39 per cent of their combined greenfield investments from China, up from 5.1 per cent in 2022 and only 0.6 per cent 20 years ago, the international lender reported on Wednesday.  This surge in part shows how “China has tried to diversify production locations in terms of potential trade barriers”, Javorcik said. For instance, China is spearheading investments in Morocco, which has a free trade agreement with the US and can export raw materials for electric vehicles without being subject to punitive tariffs and instead be eligible for US renewable energy subsidies.  The EBRD expects GDP across its regions to average 3 per cent this year and 3.6 per cent in 2025, up from 2.5 per cent in 2023. The countries it operates in struggled to bring down inflation which surged in the Covid-19 pandemic and after Russia’s full-scale invasion of Ukraine in 2022. While the pace of disinflation has been “somewhat quicker than expected a year ago”, inflation is still about two percentage points above pre-pandemic levels, the EBRD said. The bank lowered its GDP forecast by 0.2 percentage points from its previous report in September in part because of weakening growth in central Europe and the Baltic states, which are suffering from the impact of the war in Ukraine and Germany’s economy slowing down. “Half a percentage growth in Germany is something that will be felt,” Javorcik said. The EBRD’s chief economist, who is Polish, also noted countries in her own region continue to be hampered by a rise in their borrowing costs over the past two years, in contrast with other EBRD regions where the risk premium has fallen back to the levels before Russia’s invasion. “It’s yet another way in which you can see the long shadow of the war on the region,” she said. Thank you, Raphael Minder, for an insightful story. Read the full story here: https://lnkd.in/e-2xiaXd

Komerční banka’s new quarterly Czech Economic Outlook entitled ‘Economy Reluctant to Take Off' has been published. Full report in EN: https://lnkd.in/d_A65-8D Full report in CZ: https://lnkd.in/dDGm-4jR   Key points: Two years of weak growth for Czech economy 🐌 After last year’s stagnation, we expect GDP to grow by 0.8% this year and 1.5% next year, a weaker outlook than our previous forecast. Growth should be driven mainly by rising domestic demand 🛒 but is likely to be held back by a slow recovery in household purchasing power 💵 and subdued industrial activity.   Inflation should fall below 2% 🎯 in 2025 However, we expect it to remain in the upper half of the CNB’s tolerance band until the end of the year, averaging 2.5% in 2024. Next year, we forecast a decline to 1.8% on the back of still-weak consumer demand and lower energy and fuel prices. Core inflation should remain slightly above 2% in 2025, reflecting accelerating house 🏘️ price growth.   CNB 🏦 to cut repo rate to 3% We expect the central bank to continue cutting interest rates by 25bp at each meeting until May 2025. The weaker potential economic growth, in particular, should push in the direction of lower terminal rates. However, the CNB board’s communication remains hawkish, making higher rates a risk.   Market rates on the way to stabilisation ➡️ Compared to our previous forecast, the lower outlook for CZK market interest rates reflects faster monetary policy easing by the ECB and Fed and a lower CNB terminal rate. However, we do not see much room for CZK IRS to fall further despite the ongoing monetary policy rate-cut cycle.   Koruna could do well next year 💪🏻 Increased uncertainty and the slow economic recovery are likely to prevent the koruna from strengthening significantly this year. In 2025, however, the Czech currency should appreciate below EURCZK 25, supported by both developments in global 🌍 FX markets and a gradual improvement of GDP growth.

IMF Chief Kristalina Georgieva Sounds Alarm on Global Economy: Can the German Model Offer a Solution? Really interesting perspective here from Jörg Luyken on an economic policy tool used by Sweden, Denmark, Switzerland, Austria, and others to provide resilience to their countries. Amidst a global economic landscape characterized by rising debt, slowing growth, and increasing interest rates, Germany's fiscal discipline stands out as a beacon of stability. The country's "debt brake" policy, a constitutional rule limiting government borrowing, has proven to be a valuable tool in maintaining a healthy financial position. Could the German model offer a blueprint for other countries struggling with economic challenges? By adopting similar fiscal discipline measures, could nations like the United States, the United Kingdom, or France improve their long-term economic prospects and reduce their vulnerability to financial crises? While the German model has its critics, who argue that it can hinder investment and economic growth, it has undoubtedly provided the country with significant financial resilience. As the world grapples with the complexities of the modern economy, it's worth considering whether the German approach could offer valuable lessons for policymakers around the globe. What are your thoughts on the this model and its potential applicability to other countries? #globaleconomy #IMF #Germany #fiscalpolicy #debt #economics #macroeconomics #risk #debtbrake

Beyond the hyperventilating “imminent collapse” or “doom” narratives about China’s economy, what we have is an economic structure that is picking up pace amidst a major restructuring process. This short article from Professor Yan Jiang is a solid summary and overview of the dynamics and key trends. The headline is growth overall of 5.2%, underpinned by private investment expansion in manufacturing and other sectors, offsetting the restrained residential property sector.

France and Germany's economies are the worst-performing in Europe, while the UK is seen as doing moderately well. On the up side, Spain and Italy are seeing distinctly more positive signs. The latest April 2024 Weil European Distress Index, surveying 3,750 European listed companies takes into account 16 indicators, across liquidity, profitability, risk, valuation, investment and financial markets to measure distress levels across corporates. It looks at five markets, namely Total Europe, UK, Germany, France and Spain-Italy.  Read more. #EU #Economy #Investment #Financialmarket https://lnkd.in/dc5_847f

https://lnkd.in/d-EDEeAg According to the information published by the International Monetary Fund, Georgia was among the top three in the world, second in the world and first in the Eastern Hemisphere in three directions of the decadal (ten-year) growth forecast. These are: real GDP growth per capita; $GDP per capita growth rate according to purchasing power parity; Growth rate of $GDP per capita at constant prices according to purchasing power parity. "According to the IMF's estimates, this year (in 2024) Georgia will take the second place in the world with 5-year real economic growth per capita According to the ten-year rate of growth of real GDP per capita, in 2029 it will occupy the top three places in the world, it is in the second place in the world, and it is the absolute leader of growth in the Eastern Hemisphere of the world (Europe, Asia, Africa, Australia and Oceania). In 2024, per capita, the real economy of Georgia will grow by 7.5% annually, thus taking the undisputed lead among the states of Europe and Asia and taking the first place. According to purchasing power parity per capita (GDP per capita PPP), according to the ten-year forecast growth rate of the nominal economy in 2029, Georgia is in the top three in the world, in second place in the world, and is the absolute leader in growth in the Eastern Hemisphere (Europe, Asia, Africa, Australia and Oceania). it is the undisputed leader in Europe and among the top three in Eurasia. During this period, the economy of Georgia grows by 164% per person according to purchasing power parity. According to the fund's estimate, the economy of Georgia according to the purchasing power parity (GDP PPP, current prices) will become a 12-digit value in 2024, will exceed 102 billion 245 million dollars and for the first time in history will overtake Luxembourg, whose economy this year will be equal to 101 billion 876 million dollars. In 2024, Georgia will have a larger economy in terms of purchasing power parity than 6 EU member states - Luxembourg, Latvia, Estonia, Cyprus, Malta and Iceland.

Lots of takes recently on the state of China's economy, markets and the extent of the government's response. This—from Carlos Diez, a keen and well traveled China observer since before building MarketGrader.com's benchmark-busting, global smart beta index offering—gets to the heart of the matter: "what’s most significant about (monetary stimulus coupled w/ real estate sector and stock market support) is the government’s tacit acknowledgement that a Japan-style deflationary spiral, triggered by excessive leverage in its real estate sector and a collapse in consumer confidence, is a real possibility for the country. Most importantly, the government seems to be acknowledging that it needs to lead the effort to mop up the country’s unsold real estate inventory and that, contrary to what Xi Jinping has stated recently, the stock market does matter and that functioning capital markets are essential for the operation of a market economy."