Weak Ger­man in­fla­tion may lead to ECB money sup­ply

The Myanmar Times - - International Business -

GER­MANY saw flat in­fla­tion in Au­gust and this could feed into a Euro­pean Cen­tral Bank (ECB) de­ci­sion to de­ploy more mon­e­tary stim­u­lus as soon as next week.

Pre­lim­i­nary fig­ures from Ger­many’s fed­eral sta­tis­tics of­fice Des­tatis showed that in­fla­tion re­mained steady at 0.4 per­cent last month, the same as in July, as mea­sured us­ing the con­sumer price in­dex pre­ferred by the Ger­man gov­ern­ment.

The re­sult was just be­low the 0.5pc pre­dicted by an­a­lysts sur­veyed by Fact­set, and re­mains far off the ECB tar­get of just un­der 2pc.

Us­ing the Har­monised In­dex of Con­sumer Prices (HICP) barom­e­ter pre­ferred by the Euro­pean Cen­tral Bank, in­fla­tion stood at 0.3pc in Au­gust, slightly lower than July’s 0.4pc.

“While in­fla­tion should pick up in the com­ing months, we do not think that it is on track to reach the ECB’s near-2.0 per­cent tar­get on a sus­tained ba­sis,” Jack Allen of Cap­i­tal Eco­nomics wrote.

Mixed ex­pec­ta­tions for eco­nomic growth vis­i­ble in re­cent sur­veys of Ger­man busi­nesses and in­vestors and low in­fla­tion ex­pec­ta­tions among con­sumers all point to price growth peak­ing in the com­ing months be­fore fall­ing back, he added.

Mean­while, in­fla­tion is “far weaker else­where” in the eu­ro­zone, Mr Allen noted, point­ing es­pe­cially at Spain, which re­leased data show­ing head­line in­fla­tion re­mains neg­a­tive.

ECB gov­er­nors are set to meet on Septem­ber 8 for the sec­ond time since Bri­tain voted to quit the EU in late June. The bank’s board will have more hard eco­nomic data and their own staff pro­jec­tions to work from in Septem­ber.

The in­fla­tion data was a pre­lim­i­nary flash es­ti­mate based on con­sumer price data for six of Ger­many’s 16 re­gional states. – SWEDISH fur­ni­ture flat­pack gi­ant Ikea warned it could de­lay planned in­vest­ment in Rus­sia af­ter a court or­dered it to pay more than US$7.8 mil­lion in dam­ages in a long-run­ning le­gal dis­pute.

Ikea said it had plans to in­vest more than 100 bil­lion rubles (US$1.54 bil­lion) in Rus­sia but “re­cent ac­tiv­i­ties re­lated to old le­gal cases could slow down th­ese in­vest­ment plans”.

Ikea stressed it did not plan to cut its in­vest­ment in Rus­sia but said its le­gal prob­lems “could slow down” its plans.

It is­sued the state­ment af­ter a court in the west­ern Rus­sian city of Smolensk or­dered Ikea to pay more than 507 mil­lion rubles to Rus­sian busi­ness­man Kon­stantin Pono­maryov as part of a decade­long wran­gle over sup­ply­ing power to stores in the sec­ond city of Saint Peters­burg.

The case is one of nu­mer­ous cases launched in Rus­sia against Ikea in­clud­ing over the own­er­ship of the land where its na­tional head­quar­ters is based on the edge of Moscow.

The fur­ni­ture chain, which has 14 stores in Rus­sia, said it wants to work in a “fair and trans­par­ent busi­ness cli­mate” and ac­cused its op­po­nents of at­tempt­ing “to use il­le­gal meth­ods to ex­tract fur­ther money from the com­pany”.

IKEA, which has been work­ing in Rus­sia since 2000, has said it has paid more than 60 bil­lion rubles in taxes in five years and has cre­ated more than 12,000 jobs.

The group is also mired in a dis­pute over the le­gal­ity of its pur­chase of land on the edge of Moscow where it built a shop­ping cen­tre. Its of­fices have been searched nu­mer­ous times.

Ac­cord­ing to a re­cent in­ves­ti­ga­tion by Rus­sia’s Dengi mag­a­zine, Ikea is in­volved in 500 le­gal cases – more than any other com­pany in the coun­try. –

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.