Quarterly Bulletin Q3 2013

More documents

Recommendations

Info

58 Developments in the International Quarterly Bulletin 03 / July 13 and Euro Area Economy Chart 6: Euro Area Inflation Chart 7: Oil Prices – Brent Crude % Year-on-Year Change €/$ per barrel 5 130 120 4 110 3 100 90 2 80 1 70 60 0 50 -1 40 Jan Mar May July Sep Nov Jan Mar May July Sep Nov Jan Mar May July Sep Nov Jan Mar May July Sep Nov Jan Mar May July Sep Nov Jan Mar May Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2008 2009 2010 2011 2012 2013 2010 2011 2012 2013 HICP Headline Rate HICP Excluding Energy Oil Prices in Euro Oil Prices in US Dollars Source: Thomson Reuters Datastream. Source: Thomson Reuters Datastream. stood at 44.1 in June, considerably below the 50 mark that separates falling from rising prices. Manufacturing output prices have been below that threshold since June 2012. Finally, domestic price pressures also remain subdued, as rising unemployment continues to weigh on labour costs. Total hourly labour costs increased by 1.6 per cent year-on-year in the first quarter, following 1.3 per cent in the final quarter of 2012. Meanwhile, unit labour costs increased by 1.9 per cent in the first quarter, up from 1.6 per cent in the previous quarter, reflecting a slight increase in compensation per employee and higher productivity. moving within a narrow range since July 2012, according to the United Nations FAO price index. Inflation – Outlook Euro area inflation is expected to remain contained in both 2013 and 2014. According to the June 2012 Eurosystem Broad Macroeconomic Projections Exercise, euro area annual HICP inflation is expected to average 1.4 per cent in 2013 and 1.3 per cent in 2014. Oil and Other Commodity Prices Brent crude oil prices declined sharply from mid-February to mid-April this year, reflecting weak demand and favourable supply conditions due to record seasonal maintenance at refineries. Following a yearto-date trough of €96 per barrel, Brent crude oil increased slightly, while trading in a narrow range, to average $103 in May. Meanwhile, global food prices have remained steady,
Developments in the International and Euro Area Economy Quarterly Bulletin 03 / July 13 59 Box A: Correction of current account imbalances: how are the periphery economies progressing? By Bernard Kennedy and Mary Ryan 1 The years leading up to the Great Recession were marked by pronounced external imbalances in the euro area’s periphery countries with the exception of Italy. Since then, a notable decline in current account deficits has been achieved in the periphery countries (see Chart 1). This box reviews the progress made with regard to structural and cyclical factors and considers the sustainability of recent improvements. While the periphery countries have clearly improved their current account deficits, the composition of the improvement will determine its sustainability. Gains in a current account position can generally be achieved through a combination of higher exports, lower imports, greater net interest income and an increase in current transfers 2 . The sustainability of current account improvements tend to be rooted in structural factors, in particular increased exports contributions. In contrast, falling imports reflecting dampened domestic demand are more indicative of a cyclical correction to the current account, which may be subject to reversal once recovery is underway. The relative contributions of exports and imports to the narrowing of current account deficits differ considerably across the periphery countries, reflecting a varying balance of structural and cyclical factors (see Chart 2). Portugal, in particular, has experienced an improvement in its current account deficit which is primarily driven by exports. Regarding Spain, just over half of the improvement in the current account is accounted for by increased exports of both goods and services, supplemented by falling imports of goods. About 30 per cent of the moderation in the current account in Greece is exports-related, with higher goods exports offsetting a fall in services exports. Lower imports of goods and services account for almost 45 per cent of the improvement in the current account, constituting a significant cyclical adjustment. Ireland stands out in contrast, with a large upswing in exports accompanied by a significant increase in imports, reflecting the high import content of Irish exports. Gains in exports reflect the increased importance of services in the current account, while higher imports of services have been offset somewhat by declining imports of goods in line with dampened domestic demand. Also, the negative impact of income net outflows on the current account balance is particularly significant to Ireland and is closely related to the operations of multinational companies, as noted by the ECB 3 (2013). At the same time, income net outflows would be even larger but for the activities of re-domiciled companies which add to income flows but have little broader impact on economic activity (see Everett 2012 and FitzGerald 2013 4 ). 1 Monetary Policy Division. 2 Current Transfers have remained relatively stable for the peripheral economies over the last 5 years and are not examined further. 3 ECB Monthly Bulletin, Box 3. January 2013. 4 Everett, Mary (2012) “Box 3: The Statistical Implications of Multinational Companies’ Corporate Structures”, Financing Developments in the Irish Economy Chapter, Central Bank Quarterly Bulletin, Q2 2012. FitzGerald, John (2013) “The Effect of Redomiciled PLCs on GNP and the Irish Balance of Payments”, ESRI Quarterly Economic Commentary Spring 2013.
Page 1:
JULY 13 Q3 Central Bank Quarterly B
Page 5 and 6:
Contents Section 1 Forecast Summary
Page 7 and 8:
Section 1 Quarterly Bulletin 03 / J
Page 9 and 10: 7 Comment Annual National Accounts
Page 11 and 12: 9 The Domestic Economy Overview n A
Page 13 and 14: The Domestic Economy Quarterly Bull
Page 33 and 34: 31 An Timpeallacht Gheilleagrach Le
Page 35 and 36: 33 Financing Developments in the Ir
Page 37 and 38: Financing Developments in the Irish
Page 55 and 56: 53 Developments in the Internationa
Page 57 and 58: Developments in the International a
Page 59: Developments in the International a
Page 73 and 74: 71 EU-IMF Financial Assistance Prog
Page 75 and 76: EU-IMF Financial Assistance Program
Page 77 and 78: EU-IMF Financial Assistance Program
Page 79 and 80: 77 Developments in EU Financial Ser
Page 81 and 82: Developments in EU Financial Servic
Page 83 and 84: Developments in EU Financial Servic
Page 85 and 86: Section 2 Quarterly Bulletin 03 / J
Page 87 and 88: Analysis of Recent Monetary Operati
Page 105 and 106: Section 3 Quarterly Bulletin 03 / J
Page 107 and 108: Statistical Appendix Quarterly Bull
Page 109 and 110: Statistical Appendix Quarterly Bull
Page 111 and 112:
Statistical Appendix Quarterly Bull
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163:
show all

Quarterly Bulletin Q3 2013

Create successful ePaper yourself

Delete template?

Save as template?