German may flirt with recession early next year

Updated 08 December 2012
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German may flirt with recession early next year

FRANKFURT: The German economy, Europe's biggest, will not be able to escape the crisis and may even flirt briefly with recession early next year, but is well placed to rebound strongly, the Bundesbank said yesterday.
The German central bank, in its latest updated twice-yearly forecasts, said there were "indications that economic activity may actually fall in the final quarter of 2012 and the first quarter of 2013."
Recession is technically defined as two consecutive quarters of negative growth and many of Germany's euro zone neighbors have been pushed into recession, in some cases deep, by the region's long-running debt crisis.
Although Germany has managed to hold up to the crisis fairly well, growth has slowed here as well since the beginning of the year.
After expanding by 0.5 percent in the first quarter of 2012, gross domestic product (GDP) grew by just 0.3 percent in the second quarter and a mere 0.2 percent in the third quarter.
"The cyclical outlook for the German economy has dimmed," the Bundesbank wrote in its December monthly report.
"However, there are sound reasons to believe that Germany will soon return to a growth path. The sound underlying health of the German economy suggests that it will overcome the temporary lull without major damage to the labor market, in particular," it said.
Government spokesman Steffen Seibert, quizzed about the Bundesbank forecasts at a regular news briefing in Berlin, said "it is no secret that we're in a phase of economic cooling.
"But we have no doubt that the economy is still in growth mode," he added.
"There are a whole range of indicators which in no way point to recession. The government remains cautiously optimistic."
Taking this year and next year as a whole, GDP would expand by 0.7 percent in 2012 and then by just 0.4 percent in 2013, the Bundesbank predicted.
That represents a marked downward revision from the central bank's previous forecasts in June, when it had been penciling in growth of 1.0 percent for 2012 and 1.6 percent for 2013.
It also gave its first estimation for growth in 2014, when the economy is forecast to expand by 1.9 percent.

The Bundesbank cautioned that its projections were "characterized by a high degree of uncertainty.
"It is quite conceivable that the euro area will recover sooner and the world economy will accelerate faster than assumed in this projection," it said.
"Downside risks nonetheless predominate," it added.
"Should global economic growth remain below expectations or the sovereign debt crisis escalate further in some countries, it is probable that the German economy may follow a weaker course than the one assumed in the baseline scenario," it said.
The day before, the European Central Bank unveiled its own set of — rather gloomy — economic forecasts for all 17 countries that share the euro.
In its regular quarterly staff economic projections, the ECB forecast that the euro zone economy will contract both this year and next year and only return to growth in 2014.
ECB chief Mario Draghi argued that the central bank's policy of low interest rates — it held them at their historical low of 0.75 percent on Thursday — would help fuel recovery.
The Bundesbank, too, believed the "exceptionally favorable financing conditions" would benefit businesses' investment plans.
Turning to unemployment, the Bundesbank said it expected the labor market to "come through the economic slowdown in good shape."
The jobless rate, projected to reach a low of 6.8 percent this year, would edge up to 7.2 percent in 2013 and then fall back to 7.0 percent in 2014, it said.
Inflation, too, would remain contained, easing from an anticipated 2.1 percent year this to 1.5 percent next year and 1.6 percent in the following year.
The ECB defines price stability as inflation rates just below 2.0 percent.


World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

Updated 22 June 2018
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World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

  • Dubai's “Dolce and Karama” is the emirate's copycat capital
  • Neymar Jr shirts are proving especially popular with local shoppers

DUBAI: Tucked away in an old residential district and far from Dubai’s glitzy air-conditioned malls, the Karama area of the city is doing a roaring trade in selling World Cup football shirts.

But if you’re looking for the genuine article, you may have come to the wrong place.

Karama is Dubai's copycat capital where the knockoff imitations of the world's most famous fashion brands are sold for a fraction of the genuine price.

Known to some locals jokingly by the epithet “Dolce and Karama,” a play on the Dolce & Gabbana Italian fashion house, this is a place where if you have to ask the price, you probably can afford it.

With three weeks to go until football’s new world champions are crowned, the world’s biggest sporting tournament is keeping the tills chiming on the street that has become notorious for selling everything from fake Luis Vuitton bags to knockoff Ray-Ban sunglasses.

However since the tournament kicked off just over a week ago, it’s been football not fashion, that has put a smile on the face of traders.

Retailing for a fraction of their high-street cost, the copycat shirts — especially those bearing the name of Brazilian superstar Neymar — are flying off the stalls less than week into the tournament, as UAE-based fans who want to don the colors of their favorite team or player, look for bargains.

Mohammad Ashraf has been trading in Dubai’s Karama Shopping Complex for 15 years.

At his store, Mina Fashion, Ashraf said the World Cup has brought a booming trade.

When asked how many shirts he would sell prior to the Fifa World Cup, he shrugged.

“Maybe one, two — maximum five a day,” he said.

But the Indian trader has quadrupled his business since last week’s kick-off.

“Now, we have been very busy,” he said. “We sell at least 20 pieces a day — maybe more,” he said.

His football shirts are a fraction of the cost of the genuine article on sale in Dubai malls where retailers are feeling the pressure from the growth of online rivals, the introduction of VAT and the strong dollar to which the UAE dirham is pegged — that is hitting tourist spending hard.

Karama football shirts sell for about 65 dirhams ($18) in adult size and 55 dirhams for children. But the real deal costs three or four times as much a few miles down the road in the Dubai Mall, the city’s biggest tourist draw.

In Karama, the football shirts of the Brazil, Argentina and Germany teams have been among the biggest sellers.

And the most popular player?

Ashraf said shirts bearing the name of Brazilian footballer Neymar da Sila Santos Junior have been flying off the shelves.

Abdulla Javid, runs Nujoom Al Maleb in the Karama shopping district — a shop selling a variety of knock-off sportswear — including World Cup shirts for men, youths and children.

“They are not real, not branded — branded ones are very expensive,” he said.

“We have shirts for Germany, for Argentina, for Portugal, for Sweden, for Brazil and for Belgium,” he said, pointing to racks of multi-colored football shirts.

Mens shirts retail for about 45 dirhams for adult sizes in his shop and 40 dirhams for youths. For young children, he sells shirts and shorts for a combined price of 30 dirhams.

The World Cup has also been a welcome boom for business.

“Before we sell maybe between five to 10 (shirts) a day,” he said. “Now, at least 20 to 30 pieces a day. It has been very busy. This time is a good time for us.”

Also at Karama Shopping Complex is Zico Sports.

Ahmed Jaber, a 53-year-old trader, said there are good deals to be found in at the shop he has worked in since the 1980s.

He sells football shirts that are both “branded” and “non-branded” — in other words the genuine article and cheaper knock-offs.

He said customers have been happy to shell out for the genuine football shirts for the adult sizes — which he sells for 379 dirhams, but for children, shoppers prefer to buy the fake football shirts, which he sells for about 30 dirhams.

The most popular shirts since the start of World Cup have been for Brazil, Argentina and France, he said, but his shops have an abundance of kit for all competing countries.

When he asked how the 2018 World Cup had been for business, he laughed.

“Not bad at all!,” he said.