German 2013 Growth Outlook Lowered, UK Output Falls

Arthi Gupta
07 Dec, 2012
New York City

The European indexes traded sideways. The Bundesbank lowered German growth outlook for 2013. The Greek economy contracted in the third quarter and the UK output fell in October. GDF reduces stake in IP Maestrale.

[R]12:30 PM Frankfurt – The European indexes traded sideways. The Bundesbank lowered German growth outlook for 2013. The Greek economy contracted in the third quarter and the UK output fell in October. GDF reduces stake in IP Maestrale.[/R]

The European indexes traded sideways ahead of the U.S. jobs data. German growth outlook for 2013 was lowered and the Greek economy shrunk in the third quarter.

Bundesbank Lowers German Growth Outlook

The Bundesbank lowered Germany''s growth projections for the next year, citing recessions in several euro-area countries and the global economic slowdown.

The Bundesbank estimated that real gross domestic product will grow 0.4% next year and 1.9% in 2014, following a rise of 0.7% in the current year if the euro-area banking and sovereign debt crisis does not escalate further.

The unemployment rate could edge up to 7.2% in 2013 before falling back to 7.0% in 2014, the German central bank estimates.

In Paris trading, the CAC-40 Index fell 1.44 or 0.04% to 3,600.21 and in Frankfurt the DAX Index edged lower 5.23 or 0.1% to 7,529.51.

For the week, the CAC-40 Index rose 1.2% and the DAX Index gained 1.7%.

The yields on Spain’s benchmark rose climbed 0.09 percentage points to 5.53%. Italian 10-year yields climbed 0.08 percentage points to 4.63%.

German Labor Costs Rise

German labor costs per hour were up a seasonally and calendar adjusted 0.7% in the third quarter compared with the second quarter, data from the Federal Statistics Office showed Friday.

The agency also reports that the costs of gross earnings increased 0.4% and non-wage costs 1.8%. Compared with the third quarter of 2011, labor costs were up a calendar adjusted 3.3% in the third quarter.

Separately, German corporate insolvencies declined 17% from a year earlier in September, data from the Federal Statistics Office showed.

In the January-September period, business insolvencies fell 4.6% annually to 21,803. The number of consumer insolvencies for the same period declined 5.2% to 74,504 cases from a year earlier.

Greek Economy Contracts

The Greek economy contracted in the third quarter, latest data showed.

Gross domestic product, on an unadjusted basis and at constant prices, fell 6.9% annually in the third quarter, slower than the 7.2% fall estimated earlier, the Hellenic Statistics Authority said. In the second quarter, the economy contracted 6.3% from a year earlier.

Exports decreased 4.5% and imports decreased 20.9% in comparison with the third quarter of 2011.

UK Output Declines

The UK industrial production fell more than estimated in October, data from the Office for National Statistics showed today.

The seasonally adjusted index of production fell 3% and manufacturing fell 2.1% in October compared with October 2011.

Production fell 0.8% between September and October, with mining & quarrying falling by 3.9%, and a fall of 1.3% in manufacturing.

French Deficit Narrows

France''s trade deficit narrowed to €4.685 billion in October from €4.997 billion in September, according to data released by the Customs Office released today.

Exports rose to €37.78 billion in October from €37.54 billion in the previous month. Imports decreased to €42.47 billion in October from €42.54 billion in September.

GDF Reduces Stake in IP Maestrale

GDF SUEZ announces the disposal of a majority stake in IP Maestrale, its Italian wind energy subsidiary, to ERG SpA, an Italian energy group for an enterprise value of €0.9 billion.

As part of the transaction, GDF SUEZ will remain a minority shareholder of the company with a 20% stake.

This transaction will allow GDF to reduce its net debt level by €0.8 billion.