Germany’s import price inflation has accelerated sharply in March to its highest level since the oil crisis of 1974, highlighting that inflationary pressures are intense.
The cost of imported goods surged by a jaw-dropping 31.2% in March, compared with a year ago, and by 5.7% in March alone.
The surge in costs shows the impact of the war in Ukraine, says statistis body Destatis.
Energy import prices soared 160.5% per year annually in March, with gas prices quadrupling (+304.3%) and crude up 81.3%.
The index of export prices was 15.9%, showing that firms have lifted their own prices in response.
OOPS! #Inflation pressure intensifies in #Germany. Import Price jumps to 31.2% in March, highest since Sep1974 during the first #oil crisis. The current data are beginning to reflect the impact of the war in #ukraine. pic.twitter.com/Y8DXGbGOfZ
— Holger Zschaepitz (@Schuldensuehner) April 29, 2022
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French Q1 GDP misses forecasts. Flat vs +0.3% consensus vs +0.7% prior . Slowdown driven by drop in household expenditure.
– Daniel Lacalle (@dlacalle_IA) April 29, 2022
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French Q1 GDP misses forecasts. Flat vs +0.3% consensus vs +0.7% prior . Slowdown driven by drop in household expenditure.
– Daniel Lacalle (@dlacalle_IA) April 29, 2022
France’s statistics body INSEE says that weak domestic demand hits the economy:
GDP stagnated in Q1 2022 (0.0% quarter on quarter after +0.8%) in connection with the weakness of the domestic demand: Households’ consumption expenditure sharply decreased (-1.3% after +0.6%) while gross fixed capital formation (GFCF ) slightly decelerated (+0.2% after +0.3%). Finally, internal demand excluding inventory changes contributed to -0.6 points to GDP growth, after +0.5 points in the previous quarter.
Foreign trade, although slowing down, continued to progress. The increase was more marked on the export side (+1.5% after +3.5%) than on the import side (+1.1% after +3.2%). Thereby, the contribution of foreign trade to GDP growth was slightly positive this quarter: +0.1 points after +0.0 in the previous quarter.
At last, the contribution of inventory changes to GDP growth was positive again this quarter (+0.4 points after +0.3 points in Q4 2021).
🇫🇷 GDP stagnated in Q1 2022 (0.0% qoq after +0.8%) due to a sharp decline in consumer spending and slower investment.
Contributions to GDP growth:
Domestic demand ex inventory changes: -0.5
Foreign trade: +0.1
Inventory changes: +0.4https://t.co/udvZwxgz9u pic.twitter.com/fIBGOOcTob
— Nadia Gharbi (@nghrbi) April 29, 2022
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🇫🇷 GDP stagnated in Q1 2022 (0.0% qoq after +0.8%) due to a sharp decline in consumer spending and slower investment.
Contributions to GDP growth:
Domestic demand ex inventory changes: -0.5
Foreign trade: +0.1
Inventory changes: +0.4https://t.co/udvZwxgz9u pic.twitter.com/fIBGOOcTob— Nadia Gharbi (@nghrbi) April 29, 2022
French slowdown fuels stagflation fears
French sharp slowdown raises the specter of stagflation in the eurozone, warns the FT:
The main drag on French growth was a fall in household spending, indicating that higher food and energy prices and the fallout from the Ukraine war are taking their toll on retail spending and consumer confidence.
Bloomberg says France unexpectedly stagnated as the Ukraine war took its toll:
France’s economy unexpectedly stagnated at the start of the year, sounding an early warning of the damage to Europe from soaring energy costs and worsening supply snarls following Russia’s invasion of Ukraine.
Europe’s near-term outlook is exceptionally uncertain. Another round of sanctions — including a possible ban on Russian oil imports — risks hammering industry, while record inflation and plummeting confidence are jeopardizing consumer demand.
🇫🇷 #France Unexpectedly Stagnates as War Takes Toll: GDP Update – Bloomberg
*Link: https://t.co/y6ytBUXLB5 pic.twitter.com/NGc7tryXky
— Christophe Barraud🛢🐳 (@C_Barraud) April 29, 2022
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Introduction: French economy grinds to a halt in Q1
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
France’s economy has unexpectedly ground to a halt as the energy crisis, inflation and supply chain problems exacerbated by the Ukraine war hit growth.
French GDP was unchanged in the first quarter of this year, weaker than the 0.3% growth expected by economists, official data released this morning shows.
#France‘s economy did not grow in Q1.#GDP growth = ZERO. pic.twitter.com/JNQE0vVbsk
— jeroen blokland (@jsblokland) April 29, 2022
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After growing 0.8% in October-December, France’s growth fizzled out in January-March, statistics body INSEE reports.
It’s a sign of the economic damage being caused by soaring energy and commodity prices, and supply chain disruption from the Ukraine war.
Household spending contracted by 1.3%, a signal that the surge in inflation is hitting domestic budgets and confidence, despite France’s €25bn package of support for energy bills.
*FRENCH ECONOMY STAGNATED IN FIRST QUARTER; ITS T. 0.3% GROWTH
*FRANCE GDP GREW 5.3% IN 1Q Y/Y; ITS T. +5.5%
— Nour Eldeen Al-Hammoury (@NourHammoury) April 29, 2022
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*FRENCH ECONOMY STAGNATED IN FIRST QUARTER; ITS T. 0.3% GROWTH
*FRANCE GDP GREW 5.3% IN 1Q Y/Y; ITS T. +5.5%
— Nour Eldeen Al-Hammoury (@NourHammoury) April 29, 2022
We find out at 10am how the wider eurozone fared in the first quarter, with growth figures from Germany, Spain and Italy all expected this morning too.
Belgian and French GDP came in below Consensus, markedly so in the case of France as consumption contracted. Up next, Spain in an hour and a bit. pic.twitter.com/3Z5mOzIZcV
— Oliver Rakau (@OliverRakau) April 29, 2022
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Belgian and French GDP came in below Consensus, markedly so in the case of France as consumption contracted. Up next, Spain in an hour and a bit. pic.twitter.com/3Z5mOzIZcV
— Oliver Rakau (@OliverRakau) April 29, 2022
France’s slowdown will increase concerns about the health of the world economy.
Yesterday we learned America’s economy shrank unexpectedly in the first quarter of the year, contracting by -0.4% in the first quarter, or -1.4% on an annualized basis.
That was the US’s weakest quarter since the early days of the pandemic, as the widening US trade deficit pulled down GDP.
Supply chain problems, and ongoing pandemic disruption, is continuing to hit the companies. last-night, Manzana warned that chip shortages and factory shutdowns in China could cost it up to $8bn of revenue this quarter.
🇫🇷 #France Unexpectedly Stagnates as War Takes Toll: GDP Update – Bloomberg
*Link: https://t.co/y6ytBUXLB5 pic.twitter.com/NGc7tryXky
— Christophe Barraud🛢🐳 (@C_Barraud) April 29, 2022
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It’s another sign that the world economy is slowing down. America’s economy shrank unexpectedly in the first quarter of the year, contracting by -0.4% in the first quarter, or -1.4% on an annualized basis.
That was the US’s weakest quarter since the early days of the pandemic, as the widening US trade deficit pulled down GDP.
Supply chain problems, and ongoing pandemic disruption, is continuing to hit the companies. Last night, Apple warned that chip shortages and factory shutdowns in China could cost it up to $8bn of revenue this quarter.
We get the full eurozone growth report at 10am, along with new inflation figures.
Elsewhere, Russia’s central bank may cut interest rates today, possibly from 17% to 15%, as it continues to wind back February’s emergency doubling of borrowing costs (to 20%) to prop up the ruble after the Ukraine invasion.
agenda
- 10am BST: Eurozone growth report for Q1 2022
- 10am BST: Eurozone inflation report for April
- 11.30am BST: Bank of Russia sets interest rates
- 1pm BST: Bank of Russia press conference
- 1.30pm BST: US Personal Consumption Expenditures measure of inflation
www.theguardian.com
George is Digismak’s reported cum editor with 13 years of experience in Journalism