Turkey’s inflation hits 20-year high; Spain’s jobs market improves — Macro Snapshot

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RIYADH: Turkey’s annual consumer inflation leapt to a 20-year high of 61.14 percent in March, data showed on Monday, fueled by rising energy and commodity prices as the fallout of the Russia-Ukraine conflict compounds the impact of the lira’s plunge last year.

Inflation has surged since last autumn, when the lira slumped after the central bank launched a 500 basis-point easing cycle sought by President Tayyip Erdogan.

Month-on-month consumer prices rose 5.46 percent, the Statistical Institute said, just below a Reuters poll forecast of 5.7 percent. The annual consumer price inflation forecast was 61.5 percent.

Spain’s jobs market improves

Spain’s labor market withstood soaring inflation and a crippling truckers’ strike in March to see a drop in unemployment, data showed on Monday, helped in part by reforms aimed at cutting the use of temporary contracts.

The number of people registering as jobless in Spain slipped 0.09 percent in March from February, or by 2,921 people, leaving 3.11 million people out of work, Labour Ministry data showed.

Spain added 23,998 net jobs during the month, a 0.12 percent rise from February.

Consumer prices spiked 9.8 percent in March in Spain, pushed up by energy and fresh food, after the country suffered two weeks of transport workers’ strikes that brought factories to a halt and emptied supermarket shelves.

Inflation soars in Poland

The National Bank of Poland  is likely to raise its main interest rate by 50 basis points to 4.00 percent on Wednesday, a Reuters poll showed, but with inflation surging into double-digits economists say a bigger hike is possible.

Consumer price inflation in the largest economy in the EU’s eastern wing hit 10.9 percent in March, statistics office data showed on Friday, as the war in Ukraine drove a surge in fuel and food prices. 

 At its March sitting, the Polish central bank’s Monetary Policy Council responded with a bigger-than-expected 75 basis point hike, but with the zloty having firmed by more than 7 percent from the lows hit in the early days of the war, most economists believe rate-setters will opt for a smaller increase this time.

“We see 50 basis points, with upside risk,” said Rafal Benecki, chief economist at ING in Poland.

Germany and Russian oil, gas

Germany will face a steep recession if there is a stop to imports or delivery of Russian gas and oil, a top German bank lobby warned on Monday.

Europe’s largest economy is heavily dependent upon Russia for energy, and nations’ banks echoed concerns over possible energy disruption expressed by big names in industry in recent days. Read full story

Christian Sewing, the CEO of Deutsche Bank, said in his role as president of Germany’s BDB bank lobby that banks expected sharply slower growth this year of around 2 percent due to the war in Ukraine.

BOJ urged to hike interest rates

Japan’s central bank should hike interest rates to ensure the country will not fall out of lockstep with the rest of the world in its monetary policy, an associate of Prime Minister Fumio Kishida whose ideas likely inspired the premier’s economic policy framework said.

Kishida’s government should unleash as much as $400 billion in public spending over the next five years to boost medical and anti-disaster investment, businessman George Hara also told Reuters in an interview..

The vision of Hara, who heads an organization that aims to reduce poverty around the world, likely served as a backbone of Kishida’s “new capitalism” agenda through which the premier is pushing for greater wealth distribution.

Philippine peso gains, Malaysian ringgit slips

The Philippine peso rose to a five-week high on Monday, buoyed by improved manufacturing data and the central bank’s recent hawkish tone on gradually normalizing liquidity pressures, while the Malaysian ringgit led losses among emerging Asia currencies.

The peso advanced 0.3 percent, hitting its highest since March 1, while the Malaysian ringgit eased 0.3 percent despite a rise in oil prices, as investors kept a watchful eye on the International Energy Agency’s plan to follow the United States in releasing oil reserves.

Bangko Sentral ng Pilipinas in a meeting late last month left key interest rates unchanged, but highlighted its readiness to temper increased pricing pressures as it raised inflation forecasts. The currency has gained 1.8 percent since the announcement.

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