Source: Freepik Author: Redaction According to the 2023 Monetary Emission Report published by Banco de Portugal (BdP), 265.8 million €20 banknotes were produced last year through the printing company Valora. In the information disclosed in the report, presented on Monday, the activities of the central bank with regard to the issuance of banknotes and coins are described , and it is possible to determine that the total of the banknotes produced arepart of banknotes allocated to the BdP for production under the agreement with the central banks of Austria and Belgium. Still, t here was a negative issuance of the monetary production of the banknotes in Portugal, of -24.7 million euros, which represents a decrease of 17.8% compared to the end of 2022. Thus, 6,372.7 million euros in banknotes came out of the BdP and 10,113.6 million euros came in. The justification behind this variation lies in the positive development of tourism, which has brought in banknotes that are not absorbed by demand, but also by the rise in interest rates of the European Central Bank (ECB), which has discouraged banknote holdings. On the other hand, the net issuance of coins increased again, setting itself at 791.6 million euros at the end of 2023. On a global scale, the number of banknotes and the number of euro coins circulated reached historic highs at the end of last year , setting and 29.8 billion banknotes and 148.2 billion coins. In this sense, the BdP indicates that the growth of net monetary issuance confirms that cash remains the most used means of payment by euro area citizens even though the value of banknotes in circulation has decreased for the first time since the introduction of the euro currency, set at 1.6 trillion euro. This fall represents -0.3% compared to the end of 2022, reflecting the growth of the ECB’s interest rates. Regarding counterfeits , the Monetary Issuance Report indicates that 16,723 counterfeits of banknotes and 3,197 counterfeits of coins were withdrawn from circulation in Portugal, corresponding to tiny percentages of the number of genuine banknotes and coins in circulation . Continue reading: Bank unduly charged more than 8 million euros in 2023
Source: Freepik Author: Redaction Eurostat confirmed on Wednesday, April 17, the slowdown in the annual inflation rate of the Eurozone in March, which stood at 2.4%. In February, this rate had been 2.6%, which represents a drop of 0.2 percentage points. In the European Union (EU) the scenario was also one of fall, with the annual inflation rate going from 2.8% to 2.6%. According to the official European statistics office, annual inflation fell in 13 EU Member States compared to February , showing stability in four and rising in ten. For Portugal, the annual change in the harmonised consumer price index in March stood at 2.6%, similar to the EU average , and above the euro area average. Compared to February, this is also an increase. On the other hand , the lowest inflation rates in March were in Lithuania, with 0.4%, in Finland, with 0.6%, and in Denmark, with 0.8%. Romania, Croatia, Estonia and Austria had the highest inflation rates, with 6.7%, 4.9% and 4.1% in both countries, respectively. Read more: BdP reveals that bad loans are at a minimum , Insolvencies increased 19.5% in the 1st quarter of the year and Households in the Eurozone are saving more compared to 2022
Source: Freepik Author: Redaction It was in its latest Global Financial Stability Report that the International Monetary Fund (IMF) warned of interest rate cuts in the first chapter, advising central banks to remain on alert until the disinflation process was overcome. This is a piece of advice that contradicts the optimistic outlook of financial markets, which anticipate the end of inflation and a possible easing of restrictive monetary policy. Nevertheless, the IMF technicians act with caution , considering that the various challenges that still remain, namely geopolitical tensions and pressures on the real estate market, may increase risk for some lenders, especially with the ongoing problems in China’s real estate market, the report notes. Thus, although inflation slowed rapidly on a global scale, the trend began to diverge in countries such as the US, the UK, South Africa, Italy, Germany and France, inflation expectations for the coming years began to show signs of rising. Kristalina Georgieva, president of the IMF, makes it clear that this phenomenon may jeopardize the expectation of a continuous disinflation, with projections indicating that future inflation in large economies may not slow down quickly, remaining above central bank targets . This is a message that goes against what the President of the European Central Bank (ECB), Christine Lagarde, and the President of the US Federal Reserve, Jerome Powell, had already advocated after the meeting of the Monetary Policy Councils. The discrepancy between the instability in asset prices and the political and economic uncertainty felt are also another of the warnings left by the IMF , which considers that it can anticipate increases in volatility due to negative and unforeseen shocks in inflation, with potential to shake the forecasts of falling interest rates. All of this could result in a correlated sale of assets, tightening global financial conditions and especially affecting emerging markets, which face disproportionately high refinancing rates, the IMF technicians said. The indication left by the IMF is therefore that the banks should wait, avoiding premature easing of the monetary policies in force so that they do not have to move backwards afterwards: instead, they should combat investors overly optimistic expectations of easing monetary policy, in order to be able to ensure a stable transition to a less restrictive monetary policy, they conclude. Keep abreast: Portugal is the country most impacted by the ECB’s monetary policy
Source: Freepik Author: Redaction The European Central Bank (ECB) is preparing to lower interest rates for the first time since 2019 and the conditions for easing restrictive monetary policy are in place . Inflation is gradually approaching 2%, a target set by the central bank, and economic activity remains fragile, which also implies greater confidence in the control of these factors, preventing side effects caused by the development of wages and commodity prices. Still, the cut should be coming soon, with a strong consensus on the part of the bank , with everything pointing to the first interest cut in the Eurozone being made in June. The last intervention to proceed to the interest cut was in September 2019, when the deposit rate was set at -0.5% . Consecutively, interest reached all-time lows until July 2022, and then a series of 10 consecutive increases, driving interest rates up by 450 basis points. According to the ECB, we will know a little more in April, but we will know much more in June , and, according to the available data, inflation fell to 2.4% in March, reaching a low since July 2021, and may continue to fall in the coming months. On the other hand, economic activity remains stagnant, although signs of improvement were shown in March. The GDP of the Eurozone countries will only be known until 6 June, together with inflation figures for April and May , as well as wage developments, representing the moment when the ECB can confidently decide on a possible rate slowdown. Continue reading: Banks anticipate resumption of demand for housing loans , Households in the Eurozone are saving more than 2022
Source: Freepik Author: Redaction Christine Lagarde, President of the European Central Bank (ECB) on Thursday, March 21, expressed some concerns about banking’s exposure to commercial real estate and the volume of bad loans, speaking of the resilience of Eurozone banking in 2023. According to her, in the ECB’s annual report , there is a feeling that European banks have continued to navigate in last year’s challenging environment: although higher interest rates have affected the net interest margins of euro area banks, leading to an average return on equity of 10% in the third quarter of 2023, deposit rates and non- depositsPerforming loans [NPL/bad loans] are increasing . In this sense, Lagarde indicated that supervisors will continue to closely monitor risks, namely the exposure of banks to vulnerable sectors such as commercial real estate, addressing concerns about bank governance and internal risk control frameworks . The head of the ECB also argues that resilience and adaptability will be crucial to address the structural challenges posed by climate change and digitalization , pointing out that already this year, it is expected that banks meet the ECB’s supervisory expectations on climate and environmental risks and integrate these risks into their risk management strategies and processes . He concludes: as the use of artificial intelligence becomes more widespread, supervisors will continue to scrutinize bank digitization strategies and their resilience to cyber attacks. Read on Remittances of emigrants: value increased compared to last year
Source: Freepik Author: Redaction The President of the European Central Bank (ECB), Christine Lagarde, admits that there may be a decrease in interest rates in favor of the May and June data , if they reveal a strong response to the implemented monetary policy. Still, there is no commitment to further cuts afterwards. This statement was made during an event organised by the Institute for Monetary and Financial Stability in Germany, where Largarde admitted that, if these data reveal a sufficient degree of alignment between the trajectory of underlying inflation and the ECB’s projections, assuming that transmission remains strong, there may be a revision of the monetary policy cycle and easing the restrictive stance, he said. After this assessment, however, it is not certain that there is a new relief in interest rates: even after the first rate cut, we will not be able to commit ourselves in advance to a specific trajectory of rates , he stressed, being necessary continue to confirm that the new data support the ECB’s forecasts of the inflation trend. In the coming months, we will receive more data, which will help us assess whether we can be sufficiently confident about the way forward as we move into the next phase of our monetary policy cycle, said the ECB President. The next decisions will thus be shaped by companies profit margins, wage growth and productivity growth , but until all the relevant information is gathered, there should be no consensus for monetary policy adjustment. On economy, also follow: Portugal was the seventh largest beneficiary of the EIB in 2023 , Annual inflation rate of the Eurozone declined in February and Trend: fewer companies are born and more close in Portugal
Source: Freepik Author: Redaction Much has been said about the easing of interest rates and the timing chosen by the European Central Bank (ECB) for this reduction , but there are still no signs of certainty about the application of an easing of monetary policies. However, on Friday, February 23, ECB President Christine Lagarde argued that the Governing Council has to be more confident that inflation will slow down in order to cut interest rates, regardless of the encouraging figures known about the evolution of wages . On this subject, the banks president said: The wage figures for the fourth quarter are obviously encouraging. But, as we said in our monetary policy statement, the Governing Council needs to be more confident that the process of slowing inflation that we are seeing will be sustainable and will lead us to the 2% medium-term objective that we have. There are many sectors and workers that are covered by negotiations that will be concluded in the course of the first quarter of 2024 and I think that these figures, especially if they continue to be encouraging, will be important for us to assess going forward in order to achieve confidence. So, to make sure they act at the right time, the ECB and the whole euro system depend on data , with Christine Lagarde stressing that they will use and analyze it, in all aspects other than wages, such as profit units, expectations, the results of telephone surveys of companies, the servicing of bank loans and many others which, she says: are important to us . Related topics to keep an eye on in SUPERCASA News : ECB warns of possible economic worsening , Finance Minister believes GDP can grow this year or Inflation in Portugal is below the Eurozone and EU average
Source: Freepik Author: Redaction Fernando Medina, Minister of Finance, is more optimistic about the evolution of the Gross Domestic Product (GDP) than the European Commission, believing in growth of 1.5% this year and contradicting Brussels pessimistic forecasts . For the executive, this is an achievable figure. Its too early in the year to make any changes to the governments forecast on this matter. I believe that the data we have from the last quarter, due to their knock-on effect for the year 2024, reinforces the call that the figure of 1.5% is an achievable figure for the year 2024, said Medina. On the evolution of employment , and questioned on arrival at the informal meeting of the finance ministers of the European Unions eurozone, which took place in Ghent, Belgium, the executive said: Any increase in unemployment is obviously worrying news and is not to the liking of any finance minister. Now we have to understand the situation were living in, a very exceptional situation [...] in which the capacity to create jobs often doesnt follow exactly the same rhythm as the arrival of people on the job market and thats why were having this paradox: employment is also increasing. He added: Im worried about the unemployment situation, [but] Id be more worried if the economy was at a point of destroying jobs compared to what we have and not growing jobs. Brussels is more pessimistic in its forecasts In its latest winter forecasts, released this February, the European Commission predicted Portuguese GDP growth of 1.2% in 2024 and 1.8% in 2025, a downward revision of one tenth for this year , but above the average for the eurozone and the European Union. Portugal was thus considered one of the single currency countries with the second biggest slowdown in growth between this year and last, to 1.2% this year and 1.8% next year, with the winter projections estimating growth of 1.3% for this year. As a result, the European Commission points out that growth in Portugal should remain moderate at the beginning of 2024 , impacted by weak demand from the main trading partners. Read also: Brussels considers Portugal to have fallen short of RRP targets
Source: Freepik Author: Redaction Eurostat confirmed this Thursday, February 22, that there was a general drop in inflation, which slowed in January to 2.8% in the Eurozone and 3.1% in the European Union . In the Eurozone, this is a drop of 0.8 percentage points compared to December, with the same trend occurring in the European Union rate compared to the same month. For Portugal, the change in the Harmonized Index of Consumer Prices in January was 2.5% , which, despite having accelerated in December, puts our country below the average for both the Euro Zone and the European Union (EU). Compared to December, the year-on-year inflation rate fell in 15 member states, remained stable in only 1 and increased in 11 , at a time when there is still no consensus in the European Central Bank about the timetable for a possible cut in key interest rates. Eurostat points out: In January, the largest contribution to the euro areas annual inflation rate came from services (+1.73 percentage points, pp), followed by food, alcohol and tobacco (+1.13 pp) and non-energy industrial goods (+.053 pp) . Energy products were left out, with a negative contribution of -0.62 percentage points. As for adjacent inflation , from which volatile products such as energy and food are excluded, according to Eurostat data, there was a decrease from 3.4% in December to 3.3% in January. SUPERCASA Notícias suggests you also read: Wages in the Eurozone slow down , Interest on home loans reaches highest level in 15 years and More families opt for mixed rates on home loans
Source: Freepik Author: Redaction There is a slowdown in wages in the Eurozone , according to data released this Tuesday, February 20, by the European Central Bank (ECB). According to the analysis, year-on-year wage growth was 4.5% in the last quarter of 2023, compared to the 4.7% increase in the previous quarter. This is the first slowdown since 2022 and the second highest since the ECBs series began in September 2005. Although it is still premature to assume a trend, in the view of analysts, this slowdown of 20 basis points in the year-on-year rate of the wage agreement index may represent a stagnation in the rise of Eurozone wages , mainly due to the impact of inflation. On the other hand, in the opinion of one of ING Groups senior economists, its too small a drop to open the door to an ECB rate cut in March , since the ECB is waiting on wage growth to lower its key interest rates or not, in line with inflation. In Bert Colijns view, with wage growth expected to show a careful downward trend from now on, we expect modest cuts from the ECB from June. Related topics: Wages could reach peak growth in the first half of the year , ECB warns of possible economic worsening
Source: Freepik Author: Redaction A new forecasting tool developed by the European Central Bank (ECB) projects wage growth in the first half of 2024 , believing that they could reach their peak. Despite the outlook, the trajectory is still uncertain , and wages are, in the regulators view, the most important variable in determining whether or not interest rates can begin to be cut to put a pause in the growth of inflation. At the root of the projection are the dynamics created by the significant collective agreements in the single currency, which could allow for a cut in interest rates. There is still a lot of uncertainty as to the real evolution , considering the current scenario of the global and European economy. However, the ECB is trying, together with the national central banks, to get a clear and rapid picture of the labor market in the single currency. For Mário Centeno, Governor of the Bank of Portugal, being dependent on data is not being dependent on wage data , he points out. We dont need Mays wage figures to understand the trajectory of inflation. The authors of the study, on the other hand, point out: The negotiations in the first quarter of 2024 are likely to be decisive for the evolution of wage pressures in 2024. Also read: Real monthly pay growth has been 8.1% since 2015 , Portugal could reach 13th place in the EU for standard of living
Source: Freepik Author: Redaction In January, the implicit interest rate on all housing loan contracts stood at 4.657%, reaching the highest value in 15 years, since the beginning of the National Statistics Institute (INE) series. For the eighth month running, increases in the implicit interest rate have been progressively less intense, notes INE. This trend reflects the prospects of a reversal in the tightening of the European Central Banks (ECB) monetary policy in the face of signs of a slowdown in inflation. It seems that the ECB will adjust the key rates in the summer , which has led to a drop in interest rates on the most recently concluded contracts, which is reflected in the loans concluded in the last three months. In January, the implicit interest rate fell for the third month in a row, reaching 4.315% - the lowest since July, according to the Portuguese statistics office. As for contracts signed in the last six months, the rate fell for the second month to 4.296%. Read also: ECB to keep key interest rates unchanged until March,
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