Economy
Lagarde: Stagnation is not possible in the eurozone
Christine Lagarde, president of the European Central Bank, said that although war in Ukraine had slowed growth and accelerated inflation, stagnation in the eurozone was not an economic consequence.
Lagarde said in a statement yesterday, “Currently the stagnation is not a fundamental situation. The exceptionally large uncertainty will cause a recession in economic growth with high inflation, and the current situation will not be comparable to its era. The seventies of the last century.”
Central banks face conflicting forces. The Russian war raises prices, weakening trust between businesses and families. European Central Bank officials are keen to continue to put pressure on the normalization of monetary policy, with many anticipating the possibility of a first rate hike in July.
He reiterated that based on the available data, net asset purchases are expected to end “at the beginning of the third quarter”. When asked about interest rates, the ECB chairman said officials would gradually “open up all options” and move forward.
In turn, Frank Elderson, a member of the European Central Bank’s board of directors, said yesterday that the current weak economic data did not indicate that the Russian war against Ukraine had plunged the eurozone into recession.
“Upcoming weak economic data have not yet indicated that we have entered a recession and we expect inflation to fall,” Elderson said on Twitter.
“It all depends on how the war develops and the impact of the sanctions imposed on Russia. We will decide the next stage of implementing our monetary policy next June,” he added.
Elderson noted that the war has severely affected economic activity, but that it raises inflation, mainly as a result of higher energy prices, and that the European Central Bank must ensure that inflation does not affect consumer expectations.
“We are already using a wide range of tools to deal with the situation, including potential flexibility as part of the reinvestment of the emergency bond purchase plan to meet the consequences of the epidemic,” he said.
Economic data shows that inflation in the euro area rose to 7.5 percent in April from 7.4 percent in March.
The European Statistics Institute (Eurostat) points out that the rise in consumer prices is due to an increase in energy costs, which was 38 percent in April compared to the same month last year.
Energy prices are expected to rise as tensions between European countries and Russia over the Ukraine war and the EU’s desire to reduce Russia’s dependence on oil and gas.
Food, beverage and tobacco prices rose 6.4 percent in April, compared to 5 percent in March, according to Eurostat.
And “Eurostat” added that the price of non-energy industrial goods rose 3.8 percent in March, compared with a rise of 3.4 percent.
Earlier this month, Louis de Kintos, vice president of the European Central Bank, said the bank’s rate hike in July was possible, but not possible.
“There is no reason why there should not be an end to net property purchases in July,” he explained in a press conference. “After that interest rates will rise, which could happen in a few months, weeks or days. Maybe in July, but that doesn’t mean it’s possible,” he added.
Amid high inflation recorded in the euro zone, policymakers are pushing the central bank to raise interest rates for the first time in more than a decade, according to Bloomberg News. Kindos added, “Any results will depend on new data and macroeconomic forecasts to be released in June.” Although he did not make progress beyond expectations, he acknowledged that a “significant decline in growth” was already noticeable.
Commenting on medium-term inflation expectations, he said, “So far, we have not seen a wage increase that could affect the central bank’s inflation target of 2 per cent in the medium term.”
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Bitcoin rallied strongly this week as the world’s number one cryptocurrency hit its all-time high, with a recovery in financial assets benefiting from the dollar’s decline.
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The prospect of an end to the Federal Reserve’s continuing monetary tightening cycle for more than a year and a half has contributed to a recovery in all financial assets, including major indices in global stock markets. Gold hit an all-time high after breaking above $2,100 an ounce, while Bitcoin rose to its highest level in 2023. This year has been one of the windiest years for the cryptocurrency as it ranks ninth. The largest assets by market value rose 166 percent to reach $860 billion.
Other reports, expectations of an end to the monetary tightening cycle, and expectations of an earlier-than-expected shift in monetary policy contributed to bitcoin’s gains. The latest expectations indicate the possibility of a rate cut in the US after the end of the first quarter of 2024, compared to previous expectations, which indicates the possibility of a rate cut at the beginning of the third quarter of the year. The most important factors fueling Bitcoin’s rise are reports of the imminent approval of Bitcoin exchange-traded funds (ETFs) submitted to major investment firms and related US bodies.
On the other hand, this year has not been without negative news for cryptocurrencies, especially the sanctions faced by one of the world’s largest cryptocurrency exchanges, Finans, which admitted early last month that it had lied in some of the allegations against it. US and private authorities were fined approximately $4.3 billion for anti-money laundering crimes, while the exchange’s founder, Changpeng Zhao, pleaded guilty and announced his resignation as CEO. Financial transfer.
Bitcoin rose 9.97% to register around $43,801 during this week’s trading. Meanwhile, Ethereum price rose 6.56% to reach $2,345.
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One of the golden rules in the business world is respect for the customer. This principle served Elon Musk when it came to Tesla and SpaceX. The message is if you want to drive or introduce an amazing car. Satellite to space, then Elon is what you are looking for. .
But the world’s richest man is testing the opposite side of the equation with his social media game, X, after several big companies, including Disney, Apple and IBM, have decided. Withdraw their ads from his platform. As a result of his endorsement of an anti-Semitic tweet, the world’s richest man delivered a clear message: “Go to hell.”
Advertisers seem to be taking Musk’s message seriously, and it would be easy to move to Google, TikTok or Facebook.
Platform X, formerly known as Twitter, represents a small slice of the vast digital advertising market. Media agency GroupM expects that digital advertising requires rare talent to turn a profit outside of the money fountain, but the success of “X” in this field is quite shocking.
GroupM expects the digital advertising market to grow 9.2% to $617 billion this year. The five largest global ad vendors, Google, Meta, and ByteDance, which operate TikTok, Alibaba, and Amazon, are expected to grow ad revenue by 25.4% on a combined annual basis between 2016 and 2022.
But some advertisers question how well other digital advertising platforms take care of their customers. A recent report by ad analytics service Adalytics found that ads for some major international brands and US and European government agencies continue to appear on pornographic sites and on companies in other banned countries.
After analyzing 7.2 million websites on the Internet, Adaltics found numerous examples of ads for companies including Apple, BMW, Walmart and the US Treasury appearing on questionable sites without the advertisers’ knowledge. the way It allows third-party developers to embed search engines on their own sites, presumably through Google’s search partner network.
Showing ads this way not only puts advertisers’ reputations at risk, but also performs poorly, according to Analytics. Google announced investigations into Adalytics’ allegations, but found no evidence that ad revenue was shared with recognized companies.
However, the widespread adoption of machine learning systems is allowing marketers and digital advertising platforms to deliver and deliver more targeted and personalized ads than ever before.
“It allows us to send the right message to the right customer at the right time,” says Mark Reid, CEO of WPP advertising agency. So, for example, the agency used artificial intelligence and geolocation tools in 2021. 130,000 video ads for 2,000 local stores in India, all with Bollywood star Shah Rukh Khan’s “personal” endorsement.
Ads were viewed 4 million times on YouTube and Facebook, but Reid added that advertisers expect more transparency from digital platforms and third-party verification of where and when their ads are shown.
Reed said these platforms, which are interested in gaining market share, must encourage such transparency.
Some lawmakers are calling for tougher regulatory interventions to address the problem, and U.S. Senator Mark Warner called on the Federal Trade Commission and Justice Department to investigate “digital ad brokers operating in a concentrated, fraudulent ecosystem.”
Arid Research senior analyst Richard Cramer says marketers have shown “sad negligence” by not paying enough attention while spending billions of dollars annually.
Kramer compared the digital advertising market to a vast, opaque stock market, where billions of trades are conducted daily and are subject to verification and settlement, while other trades often take place in “dark rooms.”
Kramer said Google may stop showing ads through its search and video partner networks, but the company wants to stay small, even if it’s better. He added: “None of these companies want transparency. “For big tech companies, transparency seems like a dirty word.” So, it’s time for advertisers to enforce such transparency, even if lawmakers don’t.
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Dubai: “The Gulf”
Performance of stocks in GCC countries varied during the week; Dubai Financial Market Index alone lost 0.91% to 3951.52 points and Abu Dhabi Market Index lost 1.45% to 9400.75 points in 4 sessions.
In Saudi Arabia, the main market index TASI increased the week’s trade by 0.43% to close at 11,225 points, compared to 11,177 points at the end of the previous week.
In Kuwait, the general market index rose 0.33% for the week to close at 6654.64 points, compared to 6632.47 points at the end of the previous week.
In Bahrain, the Bahrain General Index rose 0.13% on the week to close at 1942.35 points, compared to last week’s 1939.77 points.
In Qatar, the Qatar Stock Exchange Index fell 1.93% in 5 sessions to close at 9,848.15 points, compared to 10,062.64 points at the end of last week.
In the Sultanate of Oman, the Muscat Stock Exchange Index fell 1.37% during the 5-session session to close at 4594.41 points, compared to 4658.17 points at the end of the previous week.
Outside the Gulf region, the Egyptian stock market index “EGX 30” increased the week’s trade by 0.46% to end at 24,686.16 points, compared to last week’s close of 24,571.98 points.
Weekly performance:
Egypt +0.46%
Saudi Arabia +0.43%
Kuwait +0.33%
Bahrain +0.13%
Dubai 0.91% –
Oman 1.37% –
Abu Dhabi 1.45% –
Qatar 1.93% –
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