French Finance Minister Bruno Le Maire said he expects his country’s economy will avoid a contraction this year, underscoring the messages of resilience from the global elite in Davos.
(Bloomberg) — French Finance Minister Bruno Le Maire said he expects his country’s economy will avoid a contraction this year, underscoring the messages of resilience from the global elite in Davos.
“I don’t believe in a recession in France,” Le Maire said in a Bloomberg TV interview on Friday. “I think we have taken the right decisions to fight inflation.”
On the final day of the World Economic Forum, stay tuned to Bloomberg TV for interviews with Carlyle Group Co-founder David Rubenstein, United Arab Emirates Trade Minister Thani bin Ahmed Al-Zeyoudi, among others. European Central Bank President Christine Lagarde and Bank of Japan Governor Haruhiko Kuroda also take part in panels.
Key Developments
- Davos Has It All Again, Except World’s Most Powerful Person
- Wall Street Spreads New Year Cheer With Upbeat Outlook at Davos
- US Trade Chief Working With EU to Address EV Subsidy Concerns
- Labour Hailed by Business as Starmer Successfully Courts Davos
- Nigeria Snubs Global Tax Deal in Sign It Won’t Work for All
(All times CET)
Summers Urges Central Banks to Stick to Data (9:25 a.m.)
Larry Summers told central banks to avoid “excessive forecasting” of their policy trajectory or risk putting “their credibility at risk.” Instead, they should respond to the data.
The former US Treasury secretary also warned that spending is becoming “less sensitive to interest rates” as companies increasingly invest in intangible assets. That dynamic raises the question of whether “fiscal policy should be used more actively in stabilization policy.”
Revising central bank inflation targets above 2% “would be a costly error that would have adverse effects for real economies and working people everywhere,” Summers said.
Algebris Sees ‘Sense of Relief’ on Inflation (9:20 a.m.)
Algebris Chief Executive Officer Davide Serra said that inflation has peaked and China’s reopening will be crucial for the world economy.
“In a world with so much debt, some inflation might be useful. But the pace of inflation is decelerating fast,” Serra said in a Bloomberg TV interview.
Given the slowdown in global banking, the biggest lenders are able to easily retain talent. “There is nothing to worry about” on staffing, Serra said.
SNB’s Jordan Says Monetary Policy Got Too Loose (9:15 a.m.)
Swiss National Bank President Thomas Jordan said that with hindsight, global central banks kept policy too loose before last year’s consumer-price shock.
“We probably all underestimated inflationary pressures in 2021,” Jordan said on a panel on Friday. “Monetary policy was all in all a bit too expansionary.”
France Wants US Concessions on Climate Law (7:45 a.m.)
France’s Le Maire said the US must offer concessions to mitigate the impact of subsidies for American businesses in the Inflation Reduction Act, even as the European Union develops its own version of the legislation.
Read more: Le Maire Says US Wants to Oppose China, EU Wants to Engage It
Speaking to Bloomberg TV, he said Europe has a “two-track approach” in its response to the climate legislation, which he has in the past called a threat to fair competition.
“We are expecting some concessions from our American friends, but there is also another way which is to put in place a kind of European Inflation Reduction Act,” he said, adding that Europe needs to invest more in strategic sectors including electric car batteries, hydrogen and solar panels.
Congo Demands More From China Deal (6:40 a.m.)
Democratic Republic of Congo President Felix Tshisekedi criticized a $6.2 billion minerals-for-infrastructure contract with China, saying the world’s largest producer of a key battery metal hasn’t benefited from the deal.
Read more: Congo President Demands More From $6.2 Billion China Deal
“The Chinese, they’ve made a lot of money and made a lot of profit from this contract,” he said in an interview. “Now our need is simply to re-balance things in a way that it becomes win-win.” Most of Congo’s minerals end up in China, which signed a landmark deal with Tshisekedi’s predecessor in 2008 to trade roads and buildings for the two metals.
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