China firms order dozens of ships for EV, exports surge. Chinese firms have ordered 47 ships, including car carriers, to cut export costs. Meanwhile, idle car factories are being shut amid huge industry changes; only two local carmakers out of about 100 are now said to be profitable. (Asia Financial)

The European Central Bank might beat the Fed to interest rate cuts. The ECB added an intriguing sentence to its policy statement that all but confirms it's on track to cut rates soon. (Axios)

As US inflation ticks back up, it could impact the presidential election. The fight against inflation is far from over and could reduce the chances of interest rate cuts for this year. (Al Jazeera)

Average long-term US mortgage rate edges closer to 7%, rising to highest level since early March. The average long-term U.S. mortgage rate rose to its highest level in five weeks, a setback for prospective homebuyers during what’s traditionally the busiest time of the year for home sales. (AP)

Thai prime minister unveils details of a $13.7 billion digital money handout plan. Thailand’s Prime Minister Srettha Thavisin on Wednesday revealed details of his government’s plan to stimulate the economy by giving digital cash handouts of 10,000 baht ($275) to an estimated 50 million Thais for spending at their local businesses. (AP)

Red Sea modal shifts, e-commerce push March air volumes up 11% YoY. Shippers are negotiating shorter-term contracts to keep their options open amid disruptions and an incoming summer capacity boost. (Supply Chain Dive)

French growth may have accelerated, Bank of France survey shows. The French economy probably notched up slightly faster growth in the first quarter after half a year of barely expanding, according to a survey by the country’s central bank. (Bloomberg)

France’s Attal says EU-Canada trade deal Is a ‘win-win’ for all. French Prime Minister Gabriel Attal defended the European Union’s trade deal with Canada during a visit to Ottawa, saying he had faith it would move forward in his country despite a setback in the Senate. (Bloomberg)

Morgan Stanley ups China growth forecast after strong exports boost country’s GDP. Morgan Stanley said it now expects China’s economy will grow faster than it previously forecast in 2024 after the country posted better-than-expected growth in the first quarter on the back of stronger-than-forecast exports and a Beijing-led investment push. (Market Watch)

Switzerland lays out new 'too big to fail' rules in wake of Credit Suisse banking turmoil last year. The Swiss government Wednesday announced steps to bolster its “too big to fail” rules aimed at avoiding potentially disastrous fallout from banking sector turmoil after woes last year at Credit Suisse before it was taken over by rival UBS. (U.S. News)

What you need to know about the labor market. It happened again. The monthly jobs report number for March surpassed even the wildest expectations, coming in at 303,000 compared to estimates that had been around 200,000. (U.S. News)

Consumer price growth accelerated in March, adding to cloudy picture for US economy. Since the start of the pandemic, Americans have seen average prices increase more than 20% overall. Despite this, economic growth in the U.S. rolls on. (NBC)

Oil falls near $85 as swelling stockpiles overshadow Iran risk. Oil gave up the previous day’s gains as swelling U.S. stockpiles overshadowed the possibility of an attack on Israel by Iran or its proxies. (Bloomberg)

Germany's 2024 GDP growth forecast plummets

Kendall Payton, editorial associate

Germany’s GDP growth expectations for 2024 are expected to grow only 0.1%, down from a previous estimate of 1.3% as the country is stuck in “tricky waters,” according to German Economy Minister Robert Habeck.

Though the country dodged a technical recession in the second half of 2023, the fall of energy costs and inflation along with an increase in consumer spending power have not helped the overall economic crisis. Fiscal policymakers adopted a federal budget for the beginning of 2024, tightening its restrictive course—meaning companies and households will be impacted the most as government spending is cut.

The following indicators can hinder economic turnaround for the first half of 2024:

• Deteriorating order situation in all economic sectors
• Low order backlogs
• Ongoing strikes

The inflation rate is expected to continue to fall from 5.9% in 2023 to 2.3% this year and 1.6% in 2025—with gas and electricity prices expected to decrease for consumers. Inflation in labor-intensive service providers will fall slowly due to rising wage costs keeping up the pressure on prices. "Consumer restraint, high interest rates and price increases, the government's austerity measures and the weak global economy are currently dampening the economy in Germany and leading to another winter recession,” said Ifo's head of forecasts Timo Wollmershaeuser.

Yes, but: With the gradual easing of interest rates and inflation, economic output should accelerate towards the middle of the year, Wollmershaeuser added. Despite the economic downturn, Ifo’s forecast says the number of people in employment would rise to 46.1 million this year from 45.9 million in 2023, and reach a record 46.2 million in 2025. “Although a recovery is likely to set in from the spring, the overall momentum will not be too strong," said Stefan Kooths, head of economic research at the Kiel Institute for the World Economy (IfW). Economic output remains at similar levels to those before the pandemic, as productivity in Germany has remained stagnant since then. One flaw of the German economic model is the dependence on foreign demand for an outsize share of its growth, per Fitch Ratings. Greater domestic investment and honing more savings domestically would both reduce the reliance on global demand and increase productivity.

By the numbers: Customers in Germany have averaged 16 days beyond terms, with 57% of credit professionals saying payment delays have stayed the same, per the FCIB Credit and Collections Survey. The most common causes for payment delays are customer payment policy (50%), billing disputes (38%) and cash flow issues (38%).

What FCIB Credit and Collections Survey respondents are saying:

• “Be knowledgeable about VAT and local laws related to factoring.”
• “The information provided varies in terms of average days late. There are some customers that are tied to Russia and that is why we are seeing delays.”
• “Follow up with the customer’s procurement and finance department as many times as necessary.”
• “Obtain financial statements on your customers and backstop sales with credit insurance.” 

 

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate