Global Investment Updates｜20240426

Macro Economics & Finance Markets?in the Globe

Greece: Greece's economy to grow by 2.1% in 2024, think tank says

Greece's economy will grow by 2.1% this year under a baseline scenario, the country's influential?think tank?IOBE?said on Tuesday, revising down its previous estimate of 2.4% made in January.

It said the downward revision was due to a lower expected contribution from exports and?private consumption.

IOBE's new projection is below the government's estimate for growth of about 2.9% this year. Such a rate would far outpace the?euro zone?average of 0.8%.

Tourism, the main driver of?Greece's economy, which accounts for roughly a fifth of economic output, is expected to fare well this year,?IOBE?said.

Inflation this year was seen at 3% and unemployment at 10.3%, the?think tank?added.

Greece: Greece plans early repayment of eurozone bailout loans this year

Greece?plans an early repayment of up to?5 billion euros?($5.34 billion) of bailout loans to?eurozone countries?this year as it seeks a return to normality after the previous decade's?debt crisis, two government officials told?Reuters?on Tuesday.

The eurozone and the?International Monetary Fund (IMF)?lent?Greece?about 280 billion euros?during the crisis on the condition that?Greece?impose tough?austerity measures.

An official who requested anonymity told?Reuters?the government planned to repay between 2.5 billion and 5 billion euros to?eurozone countries, "probably in the second half of the year".

The official said this would help the country make room for more?bond issues?without increasing its debt, while adding liquidity to a shallow?Greek?bond market. About 70% of the country's debt is held by its official lenders, the eurozone and?the European Central Bank.

Greece?recently regained its?investment grade?after languishing for 13 years in the "junk" category, which helped it attract strong demand from?foreign investors?in its?bond issues.

Hungary: Policymakers Cut Central Bank Base Rate by 50 bp to 7.75%

The Monetary Council of the National Bank of Hungary (MNB) decided to cut the central bank base rate by 50 bp to 7.75% at a monthly policy meeting on Tuesday, according to a report by state news wire MTI.

The Hungarian Monetary Council reduced the symmetric interest rate corridor, lowering the overnight deposit rate to 6.75% and the collateralized loan rate to 8.75%. Despite the inflation outlook supporting a slower pace of rate cuts, the council emphasized cautious and patient monetary policy amid ongoing volatile risk conditions. Decisions will be data-driven, with attention to financial market stability and international sentiment, while considering limited room for further rate cuts in the second half of the year. The unanimous decision reflects a commitment to a prudent and balanced approach, with policymakers emphasizing the need for patience and flexibility in the face of evolving economic conditions.

Hungary: Moody's Affirms Budapest's 'Baa3' Rating

Moody's Ratings affirmed Budapest's "Baa3" long-term issuer ratings with a stable outlook. The city plays a significant role in Hungary's economy, boasting manageable debt levels and effective budget management despite challenges.

Budapest contributes around 37% of Hungary's GDP, with a diverse economy that consistently outperforms the national average. Its high-value service-based economic structure and GDP per capita exceeding 200% of the national average are noteworthy.

Moody's predicts Hungary's GDP to grow by 3% in 2024, which will boost business tax revenue, a primary income source for Budapest, and enhance the city's operational performance.

Despite its strengths, Budapest's rating is constrained by its challenging liquidity position, which has worsened due to pandemic effects, increased solidarity tax, and transportation system pressures over the past three years.

The stable outlook reflects Budapest's commitment to fiscal consolidation measures and debt containment, along with Hungary's positive economic outlook.

SOURECE: REUTERS,?Daily News, Daily Sanah

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Global Real Estate?& Tourism?

Portugal: Portugal commercial real estate investment trends(CBRE)

Investments in commercial real estate in Portugal are following an upward trend for its main subsectors and the last quarter of 2023 was the strongest, with a total investment volume of 1.6 billion euros, according to a report by CBRE.

However, despite having registered the largest investment volume in a quarter, Q4 2023 still showed a YoY decrease of -60% when compared to Q3.? ?The slowdown of the investment activity in Portugal has not been driven by the operational performance of the assets, which is quite positive across all economic sectors, but it is mostly motivated by an overly cautious investor approach.

The investment trends in Portugal’s main commercial real estate subsectors for 2024 show that the total investment volume will increase a little above 15%, going from 1.6 billion euros in 2023 to 1.8 billion euros in 2024.

Portugal: Lisbon office market recovers

Following “more moderate dynamics” in 2023, the beginning of the year showed that the Lisbon office market is resilient and attractive, concludes Worx.

During the first quarter of the year there was significant growth in space absorption in the Lisbon office market, which amounted to 76,131 square meters (m2).? “Seeing the market recovering again and returning to pre-pandemic values makes us confident about the rest of 2024”, says Bernardo Zammit eVasconcelos, Head of Agency at Worx Real Estate Consultants in a statement.

According to the real estate consultancy, after “a more moderate dynamic” in 2023, the beginning of the year showed that the office market is resilient and attractive, having shown “signs of strong recovery in the volume of operations, which almost tripled compared to the same period last year [ first quarter of last year]”.

Between January and March, the area with the greatest demand was Parque das Na??es (zone 5), which accounted for 41% of total absorption, and it was there that the biggest transaction of the quarter took place: the placement of Caixa Geral de Depósitos (CGD ) in the WELLBE building.

Prime CBD (zone 1) registered the highest number of operations, “evidenced a greater appetite for demand for spaces in central and prestigious locations, even with smaller areas”, concludes Worx.

SOURECE: Google News, GTP, Greek City Times, PORTUGAL NEWS, Daily News, Daily Sabah

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Market Performance & Institution Views

U.S. Economy: GDP growth slowed to a 1.6% rate in the first quarter, well below expectations

U.S. economic growth was much weaker than expected to start the year, and prices rose at a faster pace, the Commerce Department reported Thursday.

Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.

Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate while consumer spending contributed 1.68 percentage points.

The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year and up from 1.8% in the fourth quarter. Excluding food and energy, core PCE prices rose at a 3.7% rate, both well above the Fed’s 2% target. Central bank officials tend to focus on core inflation as a stronger indicator of long-term trends.

Markets?slumped following the news, with futures tied to the Dow Jones Industrial Average off more than 400 points. Treasury yields moved higher, with the benchmark 10-year note most recently at 4.69%.

A buoyant labor market has helped underpin the economy. The Labor Department reported Thursday that initial jobless claims totaled 207,000 for the week of April 20, down 5,000 and below the 215,000 estimate.

In a possible positive sign for the housing market, residential investment surged 13.9%, its largest increase since the fourth quarter of 2020.

SOURECE: HNR, CRE HERALD, Hospitality Investor