Meldungsübersicht

Russia: How resilient is the economy to financial sanctions?

  • While the recovery has been weak, we have been arguing that Russia gained in macroeconomic stability in recent years.
  • Financial shock-absorbing factors include low inflation and the transition to a new monetary policy framework, rebuilt FX reserves, a prudent fiscal rule and a consumption-driven recovery.

CEE and the global economy: The big picture

  • The global economic expansion is in full swing and accompanied by intensifying world trade.
  • The growth outlook for the United States has brightened, also due to the tax reform, and the Euro Area is continuing its recovery.
  • CEE remains Europe’s growth engine with GDP growth of 4.4 % in 2017 (y/y, excluding Russia).
  • Monetary policy continues to be accommodative despite of a gradual normalization.
USA: The US central bank Fed hiked the key interest rate last week, as expected
  • Taylor rules seem overall in line with the rate hiking cycle.
  • The natural rate of interest and term premia shed some light on understanding the Fed projections.
  • The market implied risk-neutral 10Y treasury yield is at 3.2 %. The term premium remains negative.
  • Hourly nominal wages and salaries rose by 2.3 % in 2017.
  • However, wages and salaries have remained flat since 2016, when adjusted for inflation.
  • Hourly labor productivity, on the other hand, has picked up with average growth close to 5 %.
  • Nevertheless, since the financial crisis Austrian real hourly wage growth has been among the fastest in Europe.
UNIQA Capital Markets Weekly
  • The macroeconomic situation improved considerably since a perfect storm hit the economy in 2015.
  • Long-run development depends critically on technological catch-up.
  • Financial stability increased but remains dependent on international financial support.

The structure of subdued Euro Area inflation

  • Euro Area inflation has remained broadly unchanged in February with core inflation at 1 %.
  • The historical average of core inflation is 1.4 % (1999-) and 1.6 % during the pre-crisis period.
  • Lower than average inflation in services is the underlying factor of subdued inflation post 2017.
  • Additional support from non-core components is needed for the ECB to fulfil its inflation target.
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Top Meldungen

UNIQA Capital Markets Weekly
      

Russia: How resilient is the economy to financial sanctions?

  • While the recovery has been weak, we have been arguing that Russia gained in macroeconomic stability in recent years.
  • Financial shock-absorbing factors include low inflation and the transition to a new monetary policy framework, rebuilt FX reserves, a prudent fiscal rule and a consumption-driven recovery.

UNIQA Capital Markets Weekly
      

CEE and the global economy: The big picture

  • The global economic expansion is in full swing and accompanied by intensifying world trade.
  • The growth outlook for the United States has brightened, also due to the tax reform, and the Euro Area is continuing its recovery.
  • CEE remains Europe’s growth engine with GDP growth of 4.4 % in 2017 (y/y, excluding Russia).
  • Monetary policy continues to be accommodative despite of a gradual normalization.

UNIQA Capital Markets Weekly
      
  • Taylor rules seem overall in line with the rate hiking cycle.
  • The natural rate of interest and term premia shed some light on understanding the Fed projections.
  • The market implied risk-neutral 10Y treasury yield is at 3.2 %. The term premium remains negative.