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Global Insolvencies: We'll be back

The withdrawal of support measures for companies sets the stage for a gradual normalization of business insolvencies. Our Global Insolvency Index is likely to post a +15% y/y rebound in 2022, after two consecutive years of decline (-6% forecast in 2021 and -12% in 2020). However, even in 2022, business insolvencies would remain below pre-Covid-19 levels in most countries (by -4% on average).

Money supply, saving & hoarding: What you see is not what you get

The discussion about excess saving could (and should) better distinguish the two components of what it is usually called saving, namely saving proper – money that is spent, but not on consumption -, and hoarding  - money that is not spent at all.

Eurozone: Reflation is not stagflation

When the world’s top central bankers virtually convene at this year’s ECB Annual Forum, the scale and duration of the current surge of inflation will invariably be high on the agenda. But we continue to believe that the current cyclical price pressures are unlikely to morph into a long-lasting trend. 

How to future-proof the German Wirtschaftswunder

Political change is upon Germany, but no major policy overhaul is in the cards. After the elections on 26 September 2021, Chancellor Angela Merkel will be re-placed after 16 years in power. The transition takes place in a highly fragmented political context, which will likely see the first three-party coalition emerge at the federal level and complicate the government-formation process. 

Climate policy: Time for a "blood, toil, tears and sweat" speech

Climate change is the dominant challenge of the 21^st century but combatting it will require more than just huge investments: far-reaching individual behavioral changes are also essential. 

Global economy: A cautious back-to-school

Global growth remains strong but increasingly uneven amid evolving virus dynamics and the gradual removal of policy support. Growth momentum softened over the summer despite a positive impulse from trade. The delta-related uncertainty and soft stops will cost (only) -0.2 to -0.5pp of GDP growth in advanced economies in 2021. 

European food retailers: The bitter digital aftertaste of the Covid-19 legacy

The Covid-19 crisis has fast-forwarded Europe’s e-commerce transition by four to five years, especially in food retail: In the top five markets, e-commerce penetration now ranges from between 3% to 11% of grocery sales. But we estimate that every percentage of grocery sales moving online threatens EUR13.6bn in sales and up to EUR1.9bn in profits (4% of total). 

Life after death: The phoenix-like rising of Japan´s life industry

Japan’s life industry as a whole has weathered the long yield winter remarkable well, staying profitable in an environment where interest rates and growth basically disappeared. Yet, we find that there is still some room for improvement within the local market, namely consolidation, even as life insurers start to hunt for growth overseas, mainly in Asia and China, arguably the biggest opportunity in the sector.

Export performance in Europe: a sink or swim game

European exporters, and France in particular, have lost significant market share over the past two decades as China emerged as a global exporter for manufactured goods. China’s remarkable export expansion has coincided with the dramatic decline of France’s export shares since 2001: -1.7pp, compared to -1.3pp in Germany and -1.1pp in Italy. 

ECB: Roaring reflation no reason to flinch

Despite the roaring return of inflation in H2 2021, the ECB should not flinch at next week’s policy meeting. In particular, it should refrain from taking an unneccesary bet on how the pandemic, the economy and yields (and in turn US monetary policy) will develop over the next quarter by pre-committing to a lower PEPP purchase pace.