An increase in the cost of energy will cost the German economy nearly 110 billion euros, or 3% of GDP, during the period from 2021 to 2023, writes MarketWatch citing, assessing the Munich Institute for Economic Research Ifo.
The increase in energy prices was more sensitive to the German economy only during the 1979-81 crisis, when it took 4 percent of the country’s GDP, said Timo Vollmerhäuser, head of Ifo’s forecasting department.
The main damage of 64 billion euros will occur in 2022, economists believe. In 2021, the damage was 35 billion euros, and in 2023 it is expected to be 9 billion euros, according to Ifo estimates.
Why are energy prices going up? The impact of the energy crisis on Germany’s real income will be felt for several years as Russia’s exclusion from the supply chain translates into high energy prices in the long term, Wallmerhäuser noted.
German GDP grew 0.3% in the third quarter of 2022 compared to the previous three months and 1.2% year-on year, preliminary data from Germany’s Federal Statistical Office (Destatis) showed.
The German economy will grow by 1.4 percent this year, and shrink by 0.4 percent next year, the country’s economy ministry forecast. In 2024 it is expected to grow by 2.3%.
Earlier we reported that the dollar is getting weaker before data on possible increases in unemployment in the U.S.
Gold price today shows moderate growth, reacting to U.S. Federal Reserve meeting minutes
Gold prices today are rising, trading data show. Markets are processing the minutes of the November meeting of the U.S. Federal Reserve (Fed).
Forex gold price on the New York Comex rose $8.35, or 0.48%, to $1,753.95 a troy ounce. December silver futures rose 0.44% to $21.46 an ounce.
Investors pay attention to the minutes of the Federal Reserve meeting published this week. The document indicated that the regulator considers it expedient to slow down the rate of interest rate increases soon. According to the CME Group, 71.1% of analysts forecast a new 50 basis point hike in December after a 75-point increase in November.
The monetary policy easing is having a negative impact on the dollar. The dollar index (the exchange rate against a basket of currencies of six U.S. trading partners) is down nearly 1% for the week. The cheaper the U.S. currency, the more expensive gold becomes as it becomes more available for purchase in other currencies. The yellow metal has been showing a rise of about 1% since Monday.
Earlier we reported that the U.S. dollar is stable against the euro and yen and rising against the pound.
The US dollar rate is stable against the euro and the yen and goes up against the pound
In today’s trading the US dollar rate is stable against the euro and the yen and is strengthening against the pound. A day earlier, the dollar weakened against the world’s major currencies following the release of the Federal Reserve’s (Fed) November meeting minutes, which showed that the overwhelming majority of U.S. central bankers see the need to slow down the pace of rate hikes soon.
The ICE index that shows the dollar’s movement against six currencies (euro, Swiss franc, yen, Canadian dollar, pound and Swedish krona) lost 0.17% on Friday, while the broader WSJ Dollar Index was stable.
Current dollar rate
The euro/dollar pair was trading at $1.0411, up from $1.0410 at the close of the previous session. The dollar was trading at 138.61 yen against the Japanese yen at the same time, compared to 138.54 yen the previous day. The pound exchange rate fell to $1.2103, compared to $1.2113. Yesterday the dollar was 0.2% cheaper against the euro, 0.7% cheaper against the yen, and 0.5% cheaper against the pound.
“Some of the Fed leaders observed that monetary policy had reached a state in which it was sufficiently restrictive to meet FOMC goals and it would be appropriate to slow rate hikes. The vast majority of meeting participants felt that slowing the pace of the hike would probably be appropriate in the near term,” noted the minutes of the Nov. 1-2 Fed meeting.
Some of the U.S. central bank leaders, meanwhile, believed that the Fed would have to raise the rate higher than previously planned to meet its goal of easing inflation.
They indicated that the rate “would have to reach a somewhat higher level than previously expected,” given the lack of enough signals of easing in U.S. inflation at the moment, as well as the continuing imbalance of supply and demand in the economy.
Earlier we reported that Italian Enel plans to sell assets for 21 billion euros to reduce debt.
Enel green power Italy plans to sell assets worth 21 billion euros to reduce debt
Enel green power Italy (BIT:ENEI) plans to sell assets totaling about 21 billion euros to reduce debt and finance investments, according to the company’s new strategic plan.
In particular, Enel plans to sell its assets in Romania and withdraw from Peru and Argentina. It is expected that a significant part of these assets will be sold by the end of next year.
As a result, the company intends to focus on six key markets – Italy, Spain, the USA, Brazil, Chile and Colombia.
The key strategic focus will be on electrification, and by 2025 Enel expects to sell about 80% of its electricity under long-term fixed-price contracts. By that time, the company plans to increase its electricity generation capacity from renewable sources by about 21 gigawatts, after which renewable energy will account for about 75% of all electricity produced.
The company plans to invest about 37 billion euros between 2023 and 2025.
Enel Green Power Italy’s management has set medium-term targets for adjusted profit and adjusted EBITDA for 2025 at €7-7.2 billion and €22.2-22.8 billion, respectively. By comparison, the company expects to record adjusted profit of 5-5.3 billion euros and adjusted EBITDA of 19-19.6 billion euros in 2022.
The company expects to keep its dividend at 43 euro cents per share in 2023-25 versus 40 euro cents in 2022.
Since the beginning of the year, the price of Enel Italy stock decreased and its capitalization fell by 27.5% to 51.67 billion euros.
Earlier we reported that Uniper had agreed on an additional €25 billion in financial aid.
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