As the dust settles on the Czech election results, our pre-election analysis still stands. Negotiations are just starting and we still expect ANO to form a coalition government with ODS or STAN (centre-right parties of the outgoing government).
1/9

oxfordeconomics.com/resource/coali… We expect this would temper the loose fiscal pledges in ANO’s economic manifesto (which we calculate at around CZK90bn or 1.2% annually). But any further fiscal consolidation is unlikely, and the coalition is likely to be fractious and tense.
2/9

Naše předvolební analýza obstála dobře. Náš základní scénář, tedy vládu ANO s ODS/STAN stále vnímám jako nejpravděpodobnější. To by mělo tlumit ty největší fiskální excesy v hospodářské strategii ANO - zároveň to bude zřejmě velmi napjatá koalice.
1/4
oxfordeconomics.com/resource/coali… Možnost vlády s krajními populistickými stranami - a velká ekonomická rizika s ní spojená - nicméně stále přetrvávají. Stejně tak varianta menšinové vláda ANO s podporou těchto stran. Koaliční vyjednávání jsou stále klíčem k ekonomickému výhledu Česka.
2/4
seznamzpravy.cz/clanek/volby-d…

Špatná data z trhu práce, díl osmý.
Sezónně očištěná míra nezaměstnanosti v srpnu opět stoupla a těsně dosáhla na 4,6%, což je nejvyšší hodnota od března 2017. Nárůst nezaměstnanosti tak stále pokračuje v poměrně rychlém tempu.
1/8 Podobně jako většina měsíců v letošním roce, i srpen byl nebývale špatný. Nárůst počtu nezaměstnaných byl - s výjimkou pandemického roku 2020 - druhý nejhorší za posledních 20 let po roce 2009, kdy probíhala finanční krize.
2/8

Is the impact of @ecb policy tightening well targeted across sectors? Perhaps not - we estimate that the brunt of monetary tightening is at best partially concentrated in sectors driving underlying inflation. This could require more hikes to bring inflation down.
Short 🧵
1/7 We find that monetary policy has a very different impact across sectors. In an ideal world, the ECB would be able to target its policy to sectors that are driving underlying inflation. But with a relatively blunt tool in the policy interest rate, this isn't possible.
2/7

Eurozone unemployment rate at 6.5% in April, 0.1pp down from March and a new all-time low. This is despite fledgling activity in the eurozone and poses an intriguing question - how come the labour market is so strong with growth so weak? I analyse this in my latest research.
1/9

https://twitter.com/EU_Eurostat/status/1664195084336652288

First thing to note is that employment really did outpace its historical relationship with GDP by some margin, particularly the upside Q1 surprise. Employment rebounded quickly after the pandemic and has been going from strength to strength since.
2/9

January retail sales data for the eurozone were not good. 0.3% m/m growth in the headline series was nowhere near enough to offset the 1.7% m/m plunge in December. The same applies to both food and non-food goods sales in the breakdown.
1/4 Retail sales remain barely above the pre-pandemic levels and way below pre-pandemic trend.
It's also one of the first hard data points we have for Q1 and it's not great. Even if the January growth is match in Feb/Mar, weak carryover means this would result in 0.3% q/q fall.
2/4

December retail sales in the eurozone were pretty dismal, no matter how you slice it.
Headline series -2.7% m/m, falling quite close to pre-pandemic *level* (not trend - it's way below that). This signals very weak momentum for consumer spending at the end of Q4. 🧵
1/9 But it's the uniform weakness across essentially all breakdowns that's worrying. For the eurozone aggregate, food & beverages and non-food goods posted a large monthly decline. Only fuel sales - a small part of the headline - picked up, helped by easing fuel prices.
2/9

Is the eurozone in a recession? Easy question that's surprisingly difficult to answer & also the topic of my latest @OxfordEconomics research note.
Long story short: we think technical recession will be avoided - but the distinction is ultimately pointless.
1/8 In Autumn, most forecasts moved to expect recession over the winter. But recent positive data prompted upwards revisions. Flash Q4 GDP gave little clarity – ex. Ireland, it showed output stagnant & overall likely flattered by trade prices, while domestic demand weakened.
2/8

Why lifting lockdown quickly is an absolutely moronic and counterproductive policy. (THREAD)

I'm not the first to post this but given the amount of senseless & foolish columns in The Telegraph, it needs to be repeated many times over. Lifting lockdowns quickly is idiotic.

1/ Why? Not because it won't achieve anything - it will make things even worse. Below is a simple SEIR model for COVID-19. It requires a number of assumptions (such as homogenous mixing) but where possible, I err on the side of being conservative.

2/