Indonesia’s Economy Grows 5.11% in 2025, Missing Target but Gaining Momentum Annual Performance OverviewIndonesia's economy expanded by 5.11 percent throughout 2025, according to official data released by the Central Statistics Agency...

Indonesia’s Economy Grows 5.11% in 2025, Missing Target but Gaining Momentum #Indonesia #DataIntegrity #FiscalStimulus

Japanse economie krimpt voor het eerst sinds begin 2024 Key takeaways De Japanse economie is in het derde kwartaal van het jaar met 1,8 procent gekrompen ten opzichte van dezelfde periode vorig jaar. Dit is de eerste kwartaaldaling sinds het begin van 2024 en een daling van 0,4 procent ten opzichte van het vorige kwartaal. Factoren die bijdroegen aan de vertraging waren onder andere […]

Japanse economie krimpt voor het eerst sinds begin 2024 #JapanseEconomie #Economie #FiscalStimulus #SanaeTakaichi #AziatischeMarkten

Will German fiscal stimulus boost inflation much? Investing.com -- Germany’s upcoming fiscal stimulus is expected to have only a modest effect on inflation, according to Capital Economics. Despite the government’s budget deficit forecast to widen from 2.8% of GDP in 2024 to around 4% in 2026 and 2027, the stimulus will likely push core inflation only slightly above 2% in the coming years. Capital Economics notes that most of the additional spending is directed toward defense and infrastructure, areas that do not directly feed into the Harmonized Index of Consumer Prices (HICP), the key measure of consumer inflation. As a result, the direct impact on consumer prices will be minimal. Although prices for materials like metals, used in both defense and consumer sectors, could increase, global market conditions largely determine these prices. Additionally, Germany’s auto sector, a major consumer of metals, is in decline, which may offset some of the demand pressures. Materials and services for home maintenance and repairs make up only 1.3% of the HICP basket. The stimulus is also unlikely to significantly raise household disposable incomes. Most funds are expected to flow to firms producing investment goods rather than to households. While military spending may benefit personnel, the Bundeswehr employs just 260,000 people, or 0.6% of the workforce, and recruitment difficulties limit expansion. Planned tax cuts on overtime and pensioner employment are also expected to have a limited impact. Wage growth may rise moderately, particularly in construction, which accounts for nearly 6% of total employment. Labor shortages in the sector have persisted despite weak activity, suggesting potential for wage increases. However, three key factors are expected to temper any broader wage-driven inflation. First, there is still spare capacity in the labor market. Unemployment has risen to 3.7%, up from a low of 3%, and labor shortages have declined in services and manufacturing. The number of workers on short-time work schemes has also increased, especially in manufacturing. Second, wage-setting mechanisms in Germany typically result in slow and limited wage adjustments. Most wages are negotiated through multi-year collective agreements, and unions have shown restraint in recent years. Recent wage hikes were primarily driven by efforts to recoup previous real income losses, not by rising labor demand. Third, low headline inflation is expected to keep wage demands contained. Falling oil and gas prices, along with government plans to reduce electricity taxes and VAT on restaurant services, are expected to weigh on inflation. The Bundesbank has already observed that union wage demands have eased as inflation subsides. Capital Economics projects core inflation in Germany will decline from 2.8% in 2025 to 2.3% in both 2026 and 2027. Headline inflation is forecast to fall to 2% in 2026 and 1.8% in 2027. While the stimulus may offer some support to wage growth, the report concludes that its overall inflationary impact will be limited and remain consistent with the European Central Bank’s 2% target.

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Can fiscal stimulus really fix Germany’s economy? Investing.com -- Germany’s recent pivot to looser fiscal policy marks a change in its economic strategy, but analysts at Capital Economics argue that this stimulus is unlikely to resolve the deeper structural issues dragging down the country’s long-term growth prospects. After years of economic stagnation following the pandemic, the government has moved to increase public spending, with plans to ramp up investment in defense and infrastructure. The shift, including subsidies for electric vehicles and incentives for machinery investments, is expected to give a modest boost to growth over the next two years. Capital Economics forecasts GDP growth of 1.0% in both 2026 and 2027. This improvement will be largely driven by the planned increase in public spending, which could add about 0.7% to GDP annually during that period. However, that momentum is expected to be short-lived. Beyond 2027, Capital Economics projects growth will fall to just 0.5% per year, well below the pre-pandemic average of nearly 2%. The brokerage underscores that much of the additional spending will not lift productivity. Defense outlays, for instance, are earmarked mainly for equipment and personnel rather than research and development. Meanwhile, infrastructure funds are set to be directed at maintenance projects rather than new ventures, limiting any potential gains in productivity. Moreover, long-term demographic challenges are expected to weigh heavily on the labor market. Germany’s working-age population is projected to decline steeply through the rest of the decade. While the government plans to encourage higher labor force participation and facilitate skilled immigration, these efforts are unlikely to fully offset the demographic drag. Even with immigration of around 270,000 annually, aligned with European Commission forecasts, the labor force is still expected to contract. Germany’s productivity growth is also expected to remain subdued. The country’s digitalization and green transition efforts, while acknowledged as priorities, continue to lag. Analysts at Capital Economics note that these areas remain secondary to more traditional sectors under the current government. Despite the creation of a digitalization ministry, reforms to reduce bureaucracy or strengthen support for start-ups have yet to materialize. At the same time, Germany’s industrial base, the traditional backbone of its economy, is in decline. Since 2017, industrial production has fallen, with the auto and energy-intensive sectors among the hardest hit. Structural challenges such as weaker European and Chinese demand, U.S. tariffs, and higher domestic energy and labor costs are expected to persist. Capital Economics warns that the auto industry alone may see output drop by as much as 20% over the next decade. These trends suggest that Germany will remain a wealthy nation, but with a diminishing number of secure, high-paying industrial jobs. As living standards stagnate and economic growth slows, the political landscape may shift further. The far-right Alternative für Deutschland (AfD) party, which performs strongly in regions facing deindustrialization, could gain more traction. While not expected to enter government under current conditions, a continued rise in AfD support could complicate coalition-building after the next federal election in 2029. On the European stage, Germany’s influence is unlikely to wane substantially despite its economic challenges. It remains the EU’s largest economy and primary financial contributor. Still, slow growth in Germany could limit the bloc’s global clout.

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China’s Economy Fights Back: Manufacturing Surges Amid Trade War - WIOBS China’s manufacturing hits a one-year high in March 2025, defying U.S. tariffs as fiscal stimulus and exports bolster...

China’s Economy Fights Back: Manufacturing Surges Amid Trade War
wiobs.com/chinas-econo...
#ChinaEconomy #TradeWar #USTariffs #ManufacturingBoom #FiscalStimulus #XiJinping #DonaldTrump #GlobalTrade #EconomicResilience #PMIData

Growth expectations among UK firms take ‘decisive turn for worse’, says CBI | Confederation of British Industry (CBI) | The Guardian Expectations negative for first time in 2024 as business confidence plummets since Rachel Reeves’s budget

#RachelReeves
#Budget2024
#FiscalStimulus
#NotAusterity
'private sector activity declined again in the 3 months to Nov (CBI) All 3 major sectors services, manufacturing, wholesale & retail reported falling activity. Further falls expected in the next 3 months'
amp.theguardian.com/business/202...

One way to consider massive #fiscalstimulus would be to set up a govt backed restructuring fund & distribute shares in such fund to every #American. We’ve got to ensure this crisis doesn’t set up to exacerbate #inequality. @ewarren @MittRomney @AOC @CliffordAsness #coronavirus

'Big companies could be well within their rights to argue that the government could be doing more heavy lifting on economic growth by providing #fiscalstimulus in order to get consumers spending and by lifting its own investment in #infrastructure'