Transcript eiu-feb-2013-presentationx

Global forecasting service
Economic forecast summary – March 2013
Master Template
1
www.gfs.eiu.com
Post-election, the political scene
continues to suffer from sharp ideological
differences between the parties.
Following a mini-deal on raising taxes at
end-2012, further confrontations loom
over federal spending and the federal
debt ceiling.
Loose monetary policy and a recovering
housing market will partly offset
contractionary fiscal policy.
We maintain our GDP growth forecast for
2013 at 2.1%, down slightly from an
estimated 2.2% in 2012. We forecast
average growth of 2.3% in 2014-17.
The existence of the ECB’s OMT bondbuying programme (as yet unactivated)
continues to foster a period of financial
calm, easing Spain and Italy’s funding
pressures.
The real economy remains weak
although it should emerge from
recession by mid-year: euro area
unemployment reached a record highs
in late 2012.
The ECB’s move buys time. Structural
issues of competitiveness and solvency
still need to be addressed.
Fiscal consolidation will remain a
constraint on growth in the medium
term.
We forecast 0.9% growth for 2013, rising
to 2% in 2014. Demand will be boosted
by the expansionary monetary and fiscal
policies of Shinzo Abe.
The consumption tax rate is forecast to
rise from 5% at present to 8% in April
2014 and then to 10% in October 2015.
We forecast average annual inflation of
around 1.3% between 2014 and 2017.
A weaker yen will provide some relief to
Japan’s exporters.
Over the long term the ageing of the
population, combined with disorderly
public finances, will make it difficult for
policymakers to engineer a selfsustaining recovery in domestic demand.
Growth in 2012 was constrained by
sluggish OECD demand and a policyinduced slowdown in China designed
to deflate a housing bubble.
Chinese data started to strengthen in
the final quarter of 2012. Stimulus
measures and an increase in bank
lending support our view that the
economy will strengthen in 2013 and
grow by 8.5%.
Growth in Brazil is expected to
improve in 2013, but remain relatively
modest at 3.5%.
We estimate that India’s growth will
pick up in 2013 to 6.5%, after growth
of just 5.4% in 2012.
Oil consumption growth will pick up
slightly in 2013 as China returns to
stronger economic growth and US
consumption turns slightly positive.
Overall, consumption growth will
average around 1.7% a year in 201317, led by the developing world.
Geopolitical risks continue to weigh
on the supply picture, particularly the
tensions between the West and Iran.
Still weak demand growth and ample
supply will constrain prices in 2013,
assuming no unforeseen disruptions
to supply or heightened political risk.
Demand will remain relatively subdued
in 2013, constrained by weak OECD
growth, but will pick up supported by a
pick up in China’s consumption
Rising emerging market incomes and
urbanisation will underpin mediumterm demand growth.
Years of underinvestment, particularly
in agriculture, will support prices.
Nominal prices will remain historically
high in 2013-17, but prices will ease
back in real terms.
The Fed’s current monetary stimulus,
a third round of QE, worth US$85bn
in monthly bond purchases, is openended and will last until at least 2014.
The ECB has said it will buy shortterm bonds of euro zone
governments without limit, subject to
strict conditions.
Given indications that the eurozone
will exit recession in mid-2013 we no
longer expect the ECB to cut interest
rates this year.
Emerging market central banks are
adopting an easier monetary stance.
Europe’s debt crisis and a protracted
recession will remain potential sources
of pressure on the euro.
All the same, the dollar has little
fundamental support, given the
combination of loose monetary policy,
fiscal tightening and a large external
funding requirement. We forecast an
average euro:dollar rate of 1.34 in
2013.
EM currencies will be sensitive to
changes in global risk appetite. They
should be supported over the medium
term by positive growth and interest
rate differentials with OECD economies.
- One or more countries leave the euro zone
20
- Tensions over currency manipulation lead to protectionism
16
- The global economy falls into recession
15
+ A sustained decline in oil prices provides a global economic fillip
12
- Tensions over disputed islands rupture Sino-Japanese ties
12
- Social and political disorder undermine stability in China
10
- US economy stumbles in the wake of a wave of fiscal tightening
10
- Economic upheaval leads to widespread social and political unrest
9
- An attack on Iran results in an oil price shock
8
+ Co-ordinated monetary stimulus kick-starts a global recovery
8
Access analysis on over 200 countries worldwide with the Economist Intelligence
The analysis and content in our reports is derived from our extensive economic, financial, political and business risk
analysis of over 203 countries worldwide.
You may gain access to this information by signing up, free of charge, at www.eiu.com
Click on the country name to go straight to the latest analysis of that country:
Further reports are available from Economist Intelligence Unit and can be downloaded at www.eiu.com
G8 Countries
*
Canada
* France
* Germany
* Italy
* Japan
* Russia
* United Kingdom
* United States of
America
* Russia
* India
* China
* Vietnam
* Egypt
* Turkey
* South Africa
BRIC Countries
* Brazil
CIVETS Countries
* Colombia
* Indonesia
Or view the list of all the countries.
Should you wish to speak to a sales representative please telephone us:
Americas: +1 212 698 9717
Asia: +852 2585 3888
Europe, Middle East & Africa: +44 (0)20 7576 8181
Master Template
13
www.gfs.eiu.com
Access analysis and forecasting of major industries with the Economist Intelligen
In addition to the extensive country coverage the Economist Intelligence Unit provides each month industry and
commodities information is also available.
The key industry sectors we cover are listed below with links to more information on each of them.
Automotive
Analysis and five-year forecast for the automotive industry throughout the world providing detail on a country by country
basis
Commodities
This service offers analysis for 25 leading commodities. It delivers price forecasts for the next two years with forecasts of
factors influencing prices such as production, consumption and stock levels. Analysis and forecasts are split by the two main
commodity types: “Industrial raw materials” and “Food, feedstuffs and beverages”.
Consumer goods
Analysis and five-year forecast for the consumer goods and retail industry throughout the world providing detail on a country
by country basis
Energy
Analysis and five-year forecast for the energy industries throughout the world providing detail on a country by country basis
Financial services
Analysis and five-year forecast for the financial services industry throughout the world providing detail on a country by
country basis
Healthcare
Analysis and five-year forecast for the healthcare industry throughout the world providing detail on a country by country
basis
Technology
Master
Template
Analysis and five-year forecast for the technology industry
throughout
the world providing detail on a country bywww.gfs.eiu.com
country 14
basis
Media Enquiries for the Economist Intelligence Unit
Europe, Middle East & Africa
Asia
Grayling PR
Jennifer Cole
Tel: + 44 (0)20 7592 7933
Sophie Kriefman
Tel: +44 (0)20 7592 7924
Ravi Sunnak
Tel : +44 (0)207 592 7927
Mobile: + 44 (0)7515 974 786
Email: [email protected]
The Consultancy
Tom Engel
+852 3114 6337 / +852 9577 7106
[email protected]
Ian Fok
+852 3114 6335 / +852 9348 4484
[email protected]
Rhonda Taylor
+852 3114 6335
[email protected]
Americas
Australia and New Zealand
Grayling New York
Ivette Almeida
Tel: +(1) 917-302-9946
[email protected]
Katarina Wenk-Bodenmiller
Tel: +(1) 646-284-9417
[email protected]
Cape Public Relations
Telephone: (02) 8218 2190
Sara Crowe
M: 0437 161916
[email protected]
Luke Roberts
M: 0422 855 930
[email protected]
Master Template
15
www.gfs.eiu.com