Macro Snapshot — South Korea inflation hits over 13-yr high; German unemployment sinks as pandemic measures ease

RIYADH: While Fitch cut China’s 2022 gross domestic product forecast to 4.3 percent from 4.8 percent, South Korea’s April consumer price index, a gauge to measure inflation, has exceeded expectations, hitting a 13-year high. 

Elevated employment levels in Ireland have kept the manufacturing growth booming, while German unemployment levels have fallen.

Australia’s central bank raised its main cash rate by 25 basis points to 0.35 percent, its first hike in more than a decade. 

S.Korea April CPI growth hits over 13-year high, tops expectations 

South Korea’s consumer prices rose much faster than expected in April, and at their fastest pace in more than 13 years, government data showed on Tuesday.

Statistics Korea showed the country’s CPI increased 4.8 percent in April from a year before, up from a 4.1 percent rise in the previous month.

It was the fastest annual growth since October 2008 and stood above the central bank’s 2 percent target for a 13th consecutive month.

Employment boost keeps Irish manufacturing growth booming — PMI

Rapid Irish manufacturing growth continued at a similar level in April to the previous month as the strongest boost to employment in almost a year mostly offset a slight slowdown in new orders and output growth, a survey showed on Tuesday.

The AIB S&P Global manufacturing Purchasing Managers’ Index fell slightly to 59.1 from 59.4 in March. That was still among the highest marks set in nearly 24 years of data collection.

“The Irish data for April paint a very similar picture to March, with strong growth in orders, output and employment, but less confidence on the outlook for business activity and continuing very elevated inflationary pressures,” AIB chief economist Oliver Mangan said.

Australia’s central bank hikes rates 25 bps to 0.35 percent

Australia’s central bank on Tuesday raised its main cash rate by a surprisingly large 25 basis points to 0.35 percent, its first hike in more than a decade, and flagged further tightening to come as it runs down the curtain on pandemic stimulus.

Wrapping up its May policy meeting, the Reserve Bank of Australia said now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the economy during the pandemic.

A majority of analysts in a Reuters poll had expected a rise to 0.25 percent given inflation had shocked by surging to 20-year highs in the March quarter. 

German unemployment sinks in April as pandemic measures ease

German unemployment fell in April, Labour Office figures showed on Tuesday, though the continued recovery prompted by the easing of coronavirus pandemic measures was slowed by the war in Ukraine.

The Federal Labour Office said the number of people out of work fell by 13,000 in seasonally adjusted terms to 2.287 million.

Analysts polled by Reuters had on average expected a decrease of 15,000.

The seasonally adjusted jobless rate remained stable at 5.0 percent.

China’s 2022 GDP forecast cut to 4.3 percent from 4.8 percent on COVID hit

Fitch said on Tuesday it has cut China’s GDP growth forecast for 2022 to 4.3 percent from 4.8 percent, saying pandemic-related disruptions have had an impact on the country’s economy in the first two quarters of the year.

The rating agency said it still expects a quarter-over-quarter GDP contraction in the second quarter, before the economy starts to recover.

Fitch raised its 2023 growth forecast for the country slightly higher to 5.2 percent from 5.1 percent.