Headlines

The Bank of Greece warned Monday that the country is likely to miss its 2019 growth target due to mounting international uncertainty and doubts over the government's commitment to reforms, the International New York Times reported on an Associated Press story. Central bank governor Yannis Stournaras, presenting the bank's annual report, said the Greek economy was likely to grow by 1.9 percent this year. That's below the European Commission's forecast of 2.2 percent and Greece's official budget estimate of 2.5 percent.

AIB said on Monday that it has agreed to sell a €1 billion portfolio of non-performing loans, consisting of mostly buy-to-let properties, to US private equity group Cerberus. The portfolio, which consists of 2,200 customer loans, is being sold to Everyday Finance as part of a consortium arrangement with Everyday and affiliates of Cerberus Capital Management, The Irish Times reported. The portfolio is predominantly made up of investment properties, with limited agriculture exposure, with an average balance of €500,000 across 5,000 assets.

In a related story, The Wall Street Journal reported that ineffective monetary policy is hindering Beijing’s efforts to pep up growth, with little of the extra cash it has pumped into the financial system filtering into the real economy. China’s government is taking other measures to stimulate economic expansion, including tax cuts and selective spending on infrastructure. Yet this stimulus is likely to be less effective than before, given a much larger economy and years of rapid debt growth—making central bank action more important.

Financial markets are in danger of jumping to the wrong conclusion in their euphoric reaction to China’s record level of lending in January and February. They seem to be assuming that history is repeating itself, with the economy set to enjoy the same impact from stimulus spending in 2019 as it did in 2009 and 2016. But the available evidence suggests a very different conclusion, and one not so positive for financial assets, the Financial Times reported in a commentary. On the surface, this year’s jump in China’s total social financing (TSF) seems to support the bullish argument.

Core inflation in the eurozone has hit its lowest level for two years, amid mounting signs that the single currency area’s economy is losing momentum, the Financial Times reported. Eurostat, the bloc’s statistics agency, said the core measure, which strips out more volatile price changes for energy and food products and is seen as a better measure of underlying price pressures, fell from 1 per cent to 0.8 per cent in the year to March. The headline measure also fell slightly, from 1.5 per cent in the year to February to 1.4 per cent last month.

India's Serious Fraud Investigation Office (SFIO) has arrested the former chairman of debt-laden Infrastructure Leasing and Financial Services (IL&FS) in connection with an ongoing investigation into the lender, a government official said on Monday, the International New York Times reported on a Reuters story. Hari Sankaran, the former chairman and managing director of IL&FS, was arrested for "abusing his powers in IL&FS Financial Services Ltd through his fraudulent conduct" and will be in SFIO's custody until April 4, the official told Reuters on condition of anonymity.

Germany’s factory sector shrunk at an even quicker clip than initially reported in March, according to a closely watched survey of industry executives. The IHS Markit purchasing managers’ index was revised to 44.1 in March — the lowest since the eurozone debt crisis in February 2012 — from a ‘flash’ estimate of 44.7, the Financial Times reported. It had registered 47.6 the previous month, slipping at that time just below the 50 line that separates expansion from contraction.

The OECD forecast Italy’s public finances to worsen as fiscal measures are not boosting economic growth. In its latest economic survey, the OECD projects that Italy’s deficit will rise to 2.5 per cent this year and to 3 per cent in 2020, both higher than government forecasts. Italy’s public debt will reverse its declining trend and it is expected to start to rise again, the Financial Times reported. This is in contrast with the government’s expectations of a downward trend in public debt despite higher spending because of projected stronger growth.

The European Central Bank’s second-in-command has warned that markets are not properly pricing in the risk of a no deal Brexit — an outcome the vice-president, Luis de Guindos, warned could lead to a further slowdown in growth across the single currency area, the Financial Times reported. Mr de Guindos, the ECB vice-president, told lawmakers at a European Parliamentary hearing: “Markets have not priced in the possibility of a no deal scenario.” He added: “We are living in a moment of slowdown of the global and the European economy.

The UK tax authority has reported the suicide of an individual facing a new “loan charge” to its complaints body for the first time, as the minister responsible for the policy rejected criticism it could lead to mass bankruptcies, the Financial Times reported. From Friday 5 April, at least 50,000 contractors who avoided national insurance and income tax by using schemes that paid them mostly in loans will face the charge. It will tax outstanding loans, which HM Revenue & Customs describes as disguised remuneration, from up to 20 years ago in a single financial year.