The future of the global economy – Morning Brief Plus

Today I am reporting from Handelsblatt headquarters in Düsseldorf, in the middle of final preparations for my trip to the World Economic Forum in Davos.

It is a delicate moment for the global economy: As state leaders, NGO representatives and CEOs gather in the Swiss mountain resort, growth rates in China are collapsing, the United States is on the brink of recession, and companies around the world are experiencing supply bottlenecks – and many countries are experiencing inflation rates not seen in decades. .

All these threats are no longer abstract. When chief financial officers from European companies gathered this week at the Handelsblatt “CFO Congress”, precisely that uncertainty was at stake. The disturbing question: What is in store for us?

Because of this uncertainty, companies keep cash, try to be more efficient, and hoard their warehouses. “In the past few months, the worst case scenario we designed has always happened,” said Astrid Hermann, chief financial officer of Beiersdorf, who visited us in the editorial office after the conference.

Beiersdorf chief financial officer Astrid Hermann fears the German economy will slip into a technical recession in the second half of the year.

(Photo: Marc-Andre Hergenroeder)

American economist Kenneth Rogoff argued in Handelsblatt that the world economy is experiencing the “perfect storm”. Clemens Fuest, president of the Munich Ifo Institute, at least sees supply chain disruptions as “a crisis that goes beyond all that is known so far”.

Businesses not only have to adapt to these new times, but also to economic policy. Politicians are accustomed to solving their problems with packages of seemingly inexhaustible aid. With more and more billions in aid, they have fueled demand. This economic policy is now reaching its limits in times of high interest rates.

It is entirely possible that the German economy will soon find itself in a difficult phase similar to the one at the beginning of this century: stuck between inflation, war, energy shortages, industrial decarbonization, supply bottlenecks and a shortage of skilled labour. So Germany needs not only a security policy, but also a turning point in economic policy focused on growth again.

What else kept us busy this week:

1. These are turbulent weeks in the markets. In the United States and Europe, prices are collapsing. The S&P 500 is about to enter a bear market. The Handelsblatt Markets team from Frankfurt analyzes what’s behind it and what the outlook looks like.

How are investors going through this difficult time? What does a crisis-resistant warehouse look like? This is not just a recurring topic at our conferences. The big analysis this weekend by my colleagues Christian Rekens and Ulf Sommer also addresses these questions.

2. The results of the FDP elections in North Rhine-Westphalia came as a shock to the party. “In this five-month-long traffic-light alliance, the FDP simply does not deliver what it promised its electorate,” said Thomas Sigmund, Handelsblatt’s political head. This illustrates the complex situation in which FDP leader Christian Lindner lives. Martin Grieve and Jan Hildebrand describe how the Federal Chancellor of the Exchequer does and does business differently from his predecessors in an easily readable picture.

3. Europe flees to renewable energies, To become independent of Russian power supplies. But with the Great Green Turn, Europe is in danger of falling from one trap to another: from opening up to blackmailing authoritarian Russia to relying on authoritarian China, writes Moritz Koch, Head of Brussels Handelsblatt office.

4. For weeks, articles on geopolitical changes have been among the most read texts on Handelsblatt. This week I noted the interview of my colleague Theresa Staines with security expert Claudia Major of Stiftung Wissenschaft und Politik, who fears the “Verdun scenario” in Ukraine: “Militarily, I fear a war of attrition or situation, where the parties make few substantial gains.”

Security expert Claudia Major

(Photo: IMAGO / Jürgen Heinrich)

5. Anyone interested in mobility and the future of the automotive industry He still had to read this text by Martin Buchenau and Roman Tiborsky: because a fierce distribution battle broke out in the automobile industry. Suppliers groan about rising costs and want to pass them on to car manufacturers. But the walls. The conflict has long become a matter of existence for some suppliers.

6. Ralph Domermouth is definitely one of the country’s most prominent entrepreneurs. It has stirred up the telecommunications industry like no other. Now begins “the last big challenge of entrepreneurship,” he said in the long interview with Felipe Alvarez de Souza Soares. It is about starting the hot phase of building his new mobile network, in which he is investing billions. He promised that this fourth mobile network would be “the newest in Germany”. And of course the businessman had some swipes in Telekom’s direction.

1 & 1 President Ralph Domermuth: “Our network will be the most modern in Europe.”

(Photo: Michael Englert for Handelsblatt)

7. If you are currently looking for a house or property renovation (As I have been for a year and a half), then do not be jealous: not only are the prices of materials rising, some of them are simply not available. The situation is now so tragic that experts predict the construction boom will come to an abrupt end – real estate developers are threatened by a situation that threatens their very existence.

8. One of my favorite columns on Handelsblatt is Russian journalist Konstantin Goldenzweig. The 39-year-old reporter had to flee Moscow and has been working in Georgia ever since. He lost his homeland – but not lost contacts that reached deep into the Russian power apparatus. This is what makes his writing worth reading. This week he wrote of the yearning of many Russians for the Soviet empire.

Column by Konstantin Goldensweig: Russian journalist Konstantin Goldensweig writes the weekly “Russian Impressions” column for Handelsblatt.

(Photo: Klawe Rzezcy)

9. I’ve been looking forward to this text by our reporter Christian Wermke for months – and it starts like this: “Complex research in journalism often starts out simply. This started earlier this year with a one-sentence mission: “Create an NFT, try to sell it, and write about your experiences.” When I thought about NFT, I had to think Immediately into these digital collector’s auction cards at absurdly high prices. But that’s all I knew. I’ve never been in a digital place.” If you want to understand the biggest buzz in the financial industry in years, read here. It takes about 15 minutes. But I promise you, you won’t regret it.

I wish you a comfortable weekend.

He greets you warmly
Yours sincerely, Sebastian Matisse

Editor-in-chief of Handelsblatt

You can get the additional morning feed for free as part of your digital subscription to Handelsblatt or subscribe separately here.

Leave a Comment