Economic Outlook no. 1189-1190 |Macroeconomic, Risk and Insolvency Outlook Overview
The worst is not behind us - or ahead of us, for that matter
2012 outcome: mixed results Global growth has slowed for the sec- ond consecutive year in 2012. GDP has lost twice as many percentage points of growth than in 2011, weakening a further 0.6 pp to come in at +2.4% in 2012. Emerging countries have slowed more (-1.3 pp) but continue to drive global growth, with a performance of +4.5% in 2012. GDP in advanced coun- tries posted a more muted slowdown (0.2 pp) and remains only slightly in positive territory (+1.1%), with persist- ent marked disparities: the United States and Canada continue to stand out for their "satisfactory” perform- ances (respectively at +2.2% and +2.0%); the United Kingdom and Japan, early and late in the year, respectively, have both had to face headwinds; and the eurozone has slipped into reces- sion (-0.5%).
Among large advanced countries as of late 2012, only the United States, Canada, Australia and Germany have returned to their pre-crisis peak in production. Australia and Canada have easily surpassed it (+11.3% and +6.1%, respectively), in the back of solid fundamentals and the good resilience of export commodity prices. The United States, despite a difficult year end on the political front (elections, risk of fiscal cliff), has successfully maintained its vigor, with US GDP ris- ing to 3% above its 2008 level. Of the four major eurozone economies, only Germany (+1.6%) has surpassed 2008 production levels: France is lagging somewhat (-1%), while Italy and Spain remain far below their 2008 levels (both at -7.3%). All in all, eurozone pro- duction has declined by -2.8% since 2008, slightly less than Japan (-3.0%) and the United Kingdom (-3.3%).
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2013-2014 outlook: a gradual recovery is underway, but only from the second half of 2013 Global growth is expected to increase by +2.5% in 2013 before accelerating to +3.2% in 2014. Global growth will improve only slightly in 2013, mainly due to prospects for the eurozone, which are too bleak in 2013 but fairer in 2014 thanks to an overall recovery. More than half of global growth will actually be attributable to emerging countries, which will contribute nearly 1.9 pp in 2013 (75% of the total) and 2.1 pp in 2014 (60% of the total). Differences among advanced countries are likely to persist in the short term. The United States will record a slight slowdown, weighed down by a delayed rebound in investment due to the uncertainty linked to the fiscal cliff, which in our scenario we consider as an obstacle that will be resolved in the short term. In the eurozone, the latest decisions regarding Greece (reduction in interest expenditures on the debt held by the private and public sectors) as well as the introduction of mecha- nisms to contain sovereign risk (and banking risk) reflect the political will to resolve the confidence crisis facing European debt and accelerate the reforms towards greater integration in the medium term. In light of the budg- etary consolidation, however, activity is likely to decline by -0.1% in 2013 before picking up again in 2014 (+1.4%).
The latest indicators point to a grad- ual recovery only from mid-2013. Leading indicators point to the possi- bility of a fresh deterioration in the short term, with foreign trade and industrial production data signaling a weakening of activity linked to an under-performance by advanced coun- tries, especially in the eurozone.
Contribution to 2013 GDP growth* ! +
GDP =
Australia Norway Canada USA
Sweden Ireland
Switzerland Germany UK
Finland
Denmark Austria
Belgium Japan
France
Netherlands Italy
Spain
Portugal Greece
2.6% 2.2% 2.1% 1.9% 1.4% 1.4% 1.0% 0.8% 0.8% 0.7% 0.6% 0.5% 0.3% 0.3% 0.2% 0.1%
-0.8% -1.6% -1.7% -3.7%
Domestic Net trade demand contribution 2.6% 3.0% 2.4% 1.9% 0.9%
0.1%
-1.8% 0.8% 0.7% 0.4%
-0.5% 1.0% 0.4% 0.1% 0.8% 0.3%
-0.2% -1.5% -2.6% -3.6% -7.7%
-0.9% -0.2% 0.0% 0.6% 3.2% 0.2% 0.1% 0.5% 1.1%
-0.4% 0.1% 0.2%
-0.5% 0.0% 0.3% 0.7% 1.0% 1.9% 4.0%
Sources: IHS Global Insight, Euler Hermes forecasts ; * yearly average
Inflation* ! UK
Portugal Belgium Finland
Australia Austria USA
Greece Spain
Canada Italy
Euro zone Denmark Sweden
Netherlands Germany France Ireland Norway
Switzerland Japan
2011 4.4%
3.6% 3.5% 3.4% 3.3% 3.3% 3.3% 3.1% 3.1% 2.9% 2.8% 2.7% 2.7% 2.6% 2.4% 2.2% 2.1% 1.2% 1.0% 0.3%
-0.3% Unemployment rate* ! Spain Greece
Portugal Ireland
Euro zone Italy
France USA UK
Denmark Finland Sweden Belgium Canada
Germany
Netherlands Australia Austria Japan
Norway Switzerland >
2011 21.6%
17.7% 12.9% 14.4% 10.2% 8.4% 9.6% 8.9% 8.1% 7.7% 7.8% 7.6% 7.2% 7.5% 6.7% 5.4% 5.1% 4.2% 4.6% 3.3% 3.0%
2012 25.1%
23.8% 15.6% 14.8% 11.4% 10.7% 10.4% 8.1% 8.0% 7.8% 7.8% 7.7% 7.4% 7.3% 6.5% 6.4% 5.3% 4.4% 4.3% 3.1% 2.8%
2013
25.9% 25.5% 16.2% 14.7% 12.0% 11.3% 10.7% 7.7% 7.9% 7.9% 8.2% 8.2% 7.7% 7.2% 6.5% 7.0% 5.3% 4.6% 4.3% 3.0% 3.0%
Sources: IHS Global Insight, Euler Hermes forecasts ; * yearly average
! countries selected and ranked by decreasing value of the indicator used
2012 2.6%
2.7% 2.6% 2.8% 2.2% 2.4% 2.2% 1.1% 2.5% 1.6% 3.0% 2.5% 2.3% 0.9% 2.7% 2.0% 2.0% 2.0% 0.8%
-0.6% 0.1%
2013 2.2%
0.8% 2.1% 2.3% 2.9% 2.0% 2.0% 0.3% 2.0% 2.0% 1.8% 1.9% 1.7% 1.0% 2.1% 1.9% 1.6% 1.6% 1.5% 0.3%
-0.2%
Sources: IHS Global Insight, Euler Hermes forecasts ; * yearly average
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