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ECONOMY

German carmakers predict strong sales

Global economic woes have failed to dampen the hopes of Germany's luxury car companies, with Audi and Mercedes expecting surging sales. BMW also reported a record month in August, with sales up a whopping seven percent.

Published: 4 September 2011 16:04 CEST
German carmakers predict strong sales
Photo: DPA

BMW’s CFO Friedrich Eichiner told Germany’s Frankfurter Allgemeine Sonntagszeitung that the carmaker sold over 100,000 cars last month.

Despite turmoil on the financial markets sparked by fears of a looming recession, the company is planning to stick to its sales targets.

“We see no reason to lower expectations, and we are confident about reaching our goals,” Eichiner said. “We want to sell more than 1.6 million cars in 2011, and after the first half of the year, we’re completely on track.”

Audi AG, part of the Volkswagen Group, also raised its annual sales forecast at the weekend.

“We will clear the bar of 1.2 million sales cleanly,” Audi CEO Rupert Stadler told Automotive News Europe.

Stadler said Audi was trying to grow the company in hopes of reaching a 2-million-car sales target in the year 2020. The carmaker is looking to sell 1.5 million cars in 2015, a goal that the Audi CEO said it would probably reach by 2014.

“We have nothing against it happening earlier,” Stadler said.

Audi’s competitor Daimler is also feeling confident about its 2011 sales results, with CEO Dieter Zetsche telling the magazine that the company expects to sell more than 1.35 million vehicles.

Daimler sold nearly 1.2 million cars in 2010.

DAPD/The Local/arp

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

Published: 30 May 2023 15:46 CEST
How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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