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Ekonomiska Utsikter, Nordea Bank, september 2012

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    Ekonomiska Utsikter, Nordea Bank, september 2012 Ekonomiska Utsikter, Nordea Bank, september 2012 Document Transcript

    • ■ Innehåll EKONOMISKA UTSIKTER SEPTEMBER 2012 Världsekonomi på lågvarv Sakta framåt ■ Euroområdet står återigen på randen av en recession. USA och övriga världsekonomin tappade fart under sommaren. Men sakta och på knagglig väg rör sig världsekonomin framåt. Gung i säkra hamnar ■ Medan Norge går från klarhet till klarhet syns svaghetstecken i Sverige och Finland. Danmark är nära recession. Det gungar till i de nordiska hamnarna. ÖVERSIKT 04 VÄRLDSEKONOMI PÅ LÅGVARV SVERIGE 08 HUSHÅLLEN RÄDDAR TILLVÄXTEN USA 16 MOVING SLOWLY FORWARD EURO AREA 18 RESTORE CONFIDENCE TO END THE RECESSION RUSSIA 24 INFLATION DÉJÀ VU CHINA 29 STABILITY, STABILITY AND … STABILITY OIL AND COMMODITIES 33 OIL PRICES STAY HIGH SPECIAL THEME 35 TWO ALTERNATIVE SCENARIOS2 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ InnehållTabellsamling ÖVERSIKT Världsekonomi på lågvarv ............................................................................. 4Nyckeltal ................................. 6Räntor och valutor ............... 7 NordenExchange rates ..................... 7 SVERIGE Hushållen räddar tillväxten ........................................................................... 8Redaktör NORWAY Risk of overheating may be the biggest challenge ........................................ 10Annika WinsthChefekonom DENMARKAnnika.winsth@nordea.com Languishing economic growth ..................................................................... 12Tel +46 8 614 8608 FINLAND Finnish economy has cooled down across the board .................................... 14Gått till tryck Större industriländer30 August 2012 USA Moving slowly forward ................................................................................. 16 EURO AREA Restore confidence to end the recession ...................................................... 18Besök oss på: UKwww.nordeamarkets.com UK growth stalling – awaiting outside help ................................................... 20 JAPAN The challenges remain in the long term ........................................................ 21Källor:Reuters EcoWin och officiell nat- Övriga länderionell statistik om inget annatanges. POLAND Slowdown under control .............................................................................. 22 RUSSIA Inflation déjà vu ........................................................................................... 24 ESTONIA Economy remains in a soft patch ................................................................. 26 LATVIA Economy keeps delivering positive surprises ............................................... 27 LITHUANIA Showing resilience ...................................................................................... 28 CHINA Stability, stability and … stability.................................................................. 29 INDIA A drought of growth..................................................................................... 31 BRAZIL Slow BRIC healing ....................................................................................... 32 Råvaror OIL Oil prices stay high but spare capacity buffer should build ........................... 33 METALS Metal prices scratching the bottom for now .................................................. 34 SPECIAL THEME Alternative scenario 1: Back on track ........................................................... 35 Alternative scenario 2: That sinking feeling .................................................. 363 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ ÖversiktVärldsekonomi på lågvarv ECB tar en mer aktiv roll kommer överens om att åtminstone delvis förlänga skat- telättnader och behålla ersättningsnivåer. Därför kommer Ljusare utsikter i USA stärker global riskvilja också partierna att nå en överenskommelse. Finanspoliti- Sverige rider ut stormen ken blir åtstramande trots det, men effekten stannar vid 0,5 procent av BNP 2013.Trots fortsatt oro på finansmarknaderna och stora utma- Europa – två steg fram och ett tillbakaningar inte minst i Europa ser vi en aning mer optimist- Tillväxten blir svag i euroområdet. Skillnaderna länderiskt på framtiden. ECB-chefen Mario Draghis starka utta- emellan är fortsatt stora och kommer att så förbli. Menlanden om att euron är här för att stanna sätter tonen. Det även de mest utsatta länderna väntas vända till tillväxtska mycket till för att beslutsfattare och politiker ska låta under prognosperioden om än från mycket låga nivåer.euron haverera. Vägen framåt är långt ifrån enkel, men Ledande indikatorer bottnar nu, medan makrodata kandet går sakta åt rätt håll. Den ekonomiska utvecklingen fortsätta att försämras i närtid. I Grekland och Portugal,blir svag i Europa, men det är tillväxt från och med nästa som tidigt kom i fokus och där stämningsläget rasat tillår. historiskt låga nivåer, har förväntningarna börjat gå åt rätt håll. Medan indikatorer för Tyskland, som påverkatsÄven i USA och Kina sätter den politiska agendan prä- senare av svag efterfrågan, indikerar sämre tider.geln. I USA krävs politiska överenskommelser för attinte finanspolitiken ska bli mycket åtstramande. Kina by- Tyska hushåll och företag möter emellertid låga räntorter politisk ledning, troligen i höst. Den nuvarande led- och har goda finaniseringsmöjligheter, vilket bör få ef-ningen har också bytt fot och börjat stimulera ekonomin fekt i takt med att förtroendet sakta återvänder. För euro-igen. Politiska beslut och utspel blir därmed ett centralt området som helhet är en expansiv penningpolitik och eninslag i stora delar av världen under prognosperioden. svag euro skäl till att återhämningen trots allt kommer redan under prognosperioden. Finanspolitiken är fortsattBNP, procentuell förändring årstakt mycket stram, men mildras något redan nästa år. Tillväx- 2011 2012 2013 2014 ten inom euroområdet blir -0,4 procent i år och 0,6 re-Världen 3,8 3,1 3,5 3,8USA 1,8 2,2 2,0 2,2 spektive 1,7 procent 2013 och 2014.Euroområdet 1,5 -0,4 0,6 1,7Kina 10,5 8,0 8,3 8,5Japan -0,7 2,5 1,6 1,1 Flera av de mest krisdrabbade länderna så som Irland, Spanien och Portugal har vidtagit omfattande åtgärder förUSA - politiken i fokus att komma tillrätta med skuldkrisen. Arbetskraftskostna-Inkommande statistik indikerar återhämtning om än trög. derna har till exempel fallit i dessa länder och konkur-Såväl bostads- som arbetsmarknaden tycks sakta gå åt renskraften ökar därmed, vilket är mycket centralt. Det ärrätt håll. Mycket expansiv penningpolitik börjar slå ige- nödvändigt att detta arbete fortsätter. Men så länge för-nom och bankutlåningen ökar till företag och industri. troendet saknas för euron räcker inte enskilda länders an-Hushållens disponibla inkomster stiger snabbare och det strängningar. ECB behöver stiga in och ta en mer aktivöppnar för en något starkare efterfrågan framöver. roll, det vill säga stötta ekonomier som uppfyller kraven som ställs, via stödköp och stabilitetsfonder.Federal Reserve, Fed, väntas föra en expansiv penning-politik länge än. Något ljusare utsikter gör dock att det Spanien förväntas be om hjälp med köp av statsobligat-inte är aktuellt med ytterligare kvantitativa lättnader nu. ioner i höst. Italien följer möjligen efter i slutet av året.Fed funds rate väntas dock ligga kvar på nuvarande nivå För att få tillgång till stöd ställer ECB och EU-en bra bit in i 2014. Fed vill på alla sätt undvika att kommissionen krav på åtgärder och dessa krav skullebromsa ekonomin för tidigt och avvaktar därför med att kunna bidra till budgetdisciplin i Italien inför valet nästainleda räntehöjningscykeln. Men då jämviktsarbetslös- vår. Den teknokratiska regeringen i Italien har vidtagitheten har gått upp och andelen långtidsarbetslösa är hög strukturella åtgärder, men mycket återstår att göra ochantas inflationen stiga snabbare än vad som ligger i Feds arbetet måste fortgå efter valet.beräkningar. Räntehöjningarna inleds därmed någrakvartal tidigare än vad Fed själva indikerar idag. Räntan Även Kina står inför politiska utmaningar, med en nyhöjs också tidigare än i euroområdet och dollarn fortsät- ledning på väg in. Den tidigare ambitionen att bromsater att stärkas under prognosperioden. ekonomin för att undvika överhettning slår nu igenom på tillväxten. BNP utfallet för andra kvartalet, 7,6 procent iValutgången är förstås central och huvudscenariot är att årstakt, var det svagaste sedan första kvartalet 2009.inget parti får majoritet i både Vita huset och i båda kam- Åtstramning kom att ske samtidigt som Europa och USArarna. För att inte den finanspolitiska åtstramningen ska tappade fart och effekten tycks ha blivit väl stor. Den ki-bli för stor är det nödvändigt att de politiska partierna nesiska ledningen har därmed bytt fot och börjat stimu-4 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Översiktlera ekonomin igen. Både finans- och penningpolitiken talet. Ekonomin växte då med 1,4 procent jämfört medhar använts och det kommer mer åtgärder. Räntan för- kvartalet före. Trots stora likheter med finländsk närings-väntas sänkas ytterligare under hösten och de offentliga livsstruktur tycks därmed BNP-utvecklingen i de bådainvesteringarna ökar igen. Tillväxten bottnar därmed i år länderna nu gå åt helt olika håll.på 8 procent och Kina undviker en hårdlanding. Bo-stadsmarknaden är på många håll fortsatt het. Centralt är Vi räknar emellertid med att svensk BNP-data för andraemellertid att bankerna är statligt ägda och de riskerar kvartalet kommer att revideras ned. Ser man över ett an-därmed inte att gå omkull. tal kvartal är inte heller tillväxten så stark. I synnerhet varuexporten och delar av industrin signalerar en trög ut-En dämpad efterfrågan, inte minst ifrån Kina, har fått me- veckling.tallpriserna att falla. Aluminiumproducenterna är till ex-empel under hård press. I takt med en något starkare glo- Förutsättningarna för hushållssektorn ser däremot relativtbal efterfrågan och ökade infrastruktursatsningar i Kina goda ut. Disponibelinkomsterna stiger med runt 2 pro-stiger metallpriserna. Priset på Brentolja pendlar mellan cent om året realt. Bostadsmarknaden väntas vara stabil100 och 115 dollar per fat under kommande år. På kort under prognosperioden och hittills i år har börsen stigitsikt kan en gynnsam utbudssituation bidra till något lägre med 5 procent. Regeringens överraskande stora reformut-priser. Under senare delen av prognosperioden väntas rymme skickar också en starkt positiv signal till hushål-dock oljepriset stiga i takt med att den globala konjunktu- len, även om utgiftsökningarna inte i någon större ut-ren förbättras och efterfrågan stärks. sträckning tillfaller hushållen. En relativt ljus bild av så- väl den egna ekonomin som av svensk ekonomi får hus-BNP, procentuell förändring årstakt hållen att lätta på plånboken. Den privata konsumtionen 2011 2012 2013 2014Danmark 0,8 0,7 1,9 2,1 ökar med runt 2 procent om året i prognosen medan spa-Norge, fastland 2,4 3,7 3,0 2,8 randet ligger still. Bidraget till BNP-tillväxten blir där-Finland 2,7 0,8 1,2 2,8 med cirka en procentenhet per år.Sverige 3,9 1,2 1,8 2,3 Sysselsättningen har utvecklats starkt, men antalet arbe-Norden fortsätter att sticka ut tade timmar har varit i stort oförändrade en längre tid.De nordiska länderna har påverkats av den globala turbu- Tidiga indikatorer för arbetsmarknaden börjar påvisalensen, men länderna är fortsatt mycket stabila jämfört svaghetstecken och arbetslösheten stiger något i höst.med hur det ser ut på många andra håll. Danmark, Norge Framför allt går arbetslösheten upp inom industrin däroch Sverige har fungerat som säkra hamnar. Inflödet av produktionen har fallit tillbaka.kapital har varit stort. Norska och svenska kronan harstärkts. Den danska centralbanken har tvingats köpa stora En svag arbetsmarknad och en stark krona dämpar inflat-belopp i utländsk valuta för att hålla emot pressen på den ionsimpulserna. Den underliggande inflationen förblirdanska kronan. låg under prognosperioden och Riksbanken sänker därför räntan mot slutet av året. I prognosen ligger två ränte-I Danmark är bostadsmarknaden nu nära att bottna. Små- sänkningar om 0,25 procentenheter i år.huspriserna har fallit med mer än 20 procent under fyraår och är tillbaka på en mer långsiktig jämviktsnivå. Det, Under eurokrisen har kronan blivit en tillflyktsvaluta ochtillsammans med stigande sysselsättning, stimulerar eko- den har stärkts mot bland annat euron. Röster har därmednomin i slutet av prognosperioden. höjts för att Riksbanken bör sänka räntan för att minska ränteskillnaderna mot omvärlden och därmed styrkan iNorsk ekonomi visar få svaghetstecken. Tillverkningsin- kronan. Den reala kronförstärkningen är dock inte likadustrin går bra, oljeinvesteringarna ökar och framför allt stor som den nominella. Frågan är också om den starkabidrar hushållens konsumtion till tillväxten. Samtidigt kronan är här för att stanna eller om det är av mer tillfäl-håller en stark arbetsmarknad uppe huspriserna. Trots lig karaktär. Ju starkare kronan blir och ju längre det hål-stigande löner, huspriser och god fart i ekonomin tycks ler i sig, desto större är sannolikheten att Riksbanken tarinte heller inflationen ta fart. Norges bank väntas därmed hänsyn till effekten i räntesättningen. Vår bedömning äravvakta med räntehöjningar länge än. att kronan ligger klart under 9 kronor mot euron hela prognosperioden, men att den försvagas mot dagens nivå.Finland har tydligt känt av den internationella inbroms-ningen via exporten, men även hushållen och investe- Sammantaget bottnar tillväxten i svensk ekonomi underringarna har bromsat in. Finländsk tillväxt hamnade i tredje kvartalet. Arbetslösheten stiger i höst och i vinter,bottenligan inom euroområdet under andra kvartalet. men global återhämning gör att Riksbanken höjer räntanBNP föll tillbaka med 1 procent jämfört med kvartalet redan i slutet av nästa år. Sverige rider därmed ut denföre. Det är inte uteslutet att BNP faller tillbaka även un- globala stormen väl.der tredje kvartalet.Svensk ekonomi överraskade å andra sidan starkt positivt Annika Winsth annika.winsth@nordea.com +46 8 614 8608under första halvåret, men framför allt under andra kvar-5 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ ÖversiktGrowth, % Inflation, % 2010 2011 2012E 2013E 2014E 2010 2011 2012E 2013E 2014EWorld1) 4.6 3.8 3.1 3.5 3.8 World1) 2.8 4.1 2.9 2.9 2.9USA 2.4 1.8 2.2 2.0 2.2 USA 1.6 3.1 2.1 2.2 2.2Euro area 1.9 1.5 -0.4 0.6 1.7 Euro area 1.6 2.7 2.2 1.6 1.6China 9.2 10.5 8.0 8.3 8.5 China 3.3 5.4 3.1 4.0 3.8Japan 4.6 -0.7 2.5 1.6 1.1 Japan -0.7 -0.3 0.2 -0.1 -0.1Denmark 1.3 0.8 0.7 1.9 2.1 Denmark 2.3 2.8 2.4 2.0 2.2Norw ay 1.9 2.4 3.7 3.0 2.8 Norw ay 2.5 1.2 0.8 1.8 2.1Sw eden 6.2 3.9 1.2 1.8 2.3 Sw eden 1.2 3.0 1.2 1.2 2.0UK 1.8 0.8 -0.4 1.0 1.7 UK 3.3 4.5 3.0 2.2 1.4Sw itzerland 2.7 2.1 1.5 1.9 2.4 Sw itzerland 0.7 0.2 -0.7 0.6 1.6Germany 4.0 3.1 0.9 1.4 2.1 Germany 0.2 1.2 1.9 1.7 2.1France 1.6 1.7 0.1 0.8 1.7 France 0.1 1.7 2.1 1.8 1.9Italy 1.8 0.5 -2.3 -0.5 1.0 Italy 1.6 2.9 3.1 2.1 1.5Spain -0.3 0.4 -1.2 -0.9 1.1 Spain 2.0 3.1 2.4 2.2 0.5Netherlands 1.6 1.1 -0.2 1.2 1.7 Netherlands 0.9 2.5 2.4 1.7 1.8Austria 2.3 2.7 0.9 0.8 1.7 Austria 1.7 3.6 2.2 1.8 1.9Belgium 2.4 1.8 -0.4 0.6 1.8 Belgium 2.3 3.5 2.2 1.5 1.7Portugal 1.4 -1.6 -2.7 0.0 1.2 Portugal 1.4 3.6 2.9 1.5 1.3Greece -3.5 -6.9 -6.6 -0.9 1.2 Greece 4.7 3.1 0.5 -0.5 0.0Finland 3.3 2.7 0.8 1.2 2.8 Finland 1.2 3.4 3.0 2.5 2.3Ireland -0.8 1.4 -0.2 1.5 2.1 Ireland -1.6 1.2 1.8 1.5 1.5Estonia 2.3 7.6 2.3 3.5 3.8 Estonia 3.0 5.0 3.7 3.0 2.9Poland 3.9 4.3 2.8 2.3 3.1 Poland 2.6 4.3 3.9 2.7 2.2Russia 4.0 4.4 4.2 4.8 5.0 Russia 6.9 8.5 6.3 6.8 7.0Latvia -0.3 5.5 4.2 2.5 3.9 Latvia -1.1 4.4 2.3 2.5 2.8Lithuania 1.4 5.9 2.7 3.3 3.5 Lithuania 1.3 4.1 3.0 2.8 3.0India 9.6 6.9 6.0 6.7 7.2 India 9.6 9.5 7.5 6.8 7.0Brazil 7.6 2.8 2.6 4.6 4.8 Brazil 5.0 6.4 5.2 5.4 5.8Public finances, % of GDP Current account, % of GDP 2010 2011 2012E 2013E 2014E 2010 2011 2012E 2013E 2014EUSA -8.9 -8.6 -7.0 -5.5 -4.1 USA -3.0 -3.1 -3.0 -3.5 -3.0Euro area -6.2 -4.1 -3.7 -3.0 -2.5 Euro area 0.0 0.0 0.3 0.7 1.0China -1.7 -1.1 -1.5 -2.3 -1.9 China 5.1 2.8 2.5 2.2 1.5Japan -9.0 -9.7 -9.9 -9.6 -9.0 Japan 3.6 2.0 2.1 2.5 2.4Denmark -2.7 -1.9 -3.9 -2.1 -0.5 Denmark 5.5 6.7 5.8 5.1 4.4Norw ay 11.3 13.8 13.7 13.9 13.6 Norw ay 12.4 14.5 14.9 15.4 15.1Sw eden -0.1 0.1 -0.3 -1.0 -0.5 Sw eden 6.8 7.0 7.2 7.6 7.5UK -10.4 -8.3 -7.6 -6.4 -4.7 UK -2.5 -1.9 -2.3 -2.1 -1.3Sw itzerland 0.7 0.8 0.1 0.1 0.2 Sw itzerland 14.3 10.4 9.3 8.7 9.9Germany -4.3 -1.0 -0.8 -0.6 -0.5 Germany 5.8 5.3 4.6 4.4 4.0France -7.1 -5.2 -4.7 -3.9 -3.5 France -2.2 -2.7 -2.4 -2.1 -2.0Italy -4.6 -3.9 -2.0 -1.8 -1.0 Italy -3.5 -3.1 -2.0 -1.0 -0.5Finland -2.5 -0.6 -0.5 -0.1 0.5 Finland 1.6 -1.1 -0.2 0.2 0.6Estonia 0.2 1.0 -1.5 -0.5 -0.3 Estonia 3.8 2.1 -2.3 -1.5 -1.3Poland -7.8 -5.1 -3.3 -3.3 -2.9 Poland -4.7 -4.3 -3.6 -3.0 -3.0Russia -4.0 0.5 0.2 0.5 0.7 Russia 4.8 4.5 4.2 3.0 2.5Latvia -8.2 -3.5 -2.2 -2.0 -2.0 Latvia 3.0 -1.2 -3.2 -3.5 -3.6Lithuania -7.2 -5.5 -2.7 -3.0 -3.0 Lithuania 1.1 -1.6 -2.7 -3.0 -3.0India -3.6 -6.6 -7.0 -7.5 -8.0 India -3.3 -2.8 -4.0 -3.0 -2.2Brazil -2.7 -2.4 -2.0 -2.1 -2.2 Brazil -2.3 -2.1 -2.5 -2.7 -2.81) Weighted average of countries in t his table. Accounts for 76.5%of world GDP. Weights calculat ed using PPP adjust ed GDP levels f or 2008 according to t he IM Fs World Economic Out look6 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ ÖversiktMonetary policy rates Monetary policy rate spreads vs Euro area 30.8.12 3M 30.6.13 31.12.13 31.12.14 30.8.12 3M 30.6.13 31.12.13 31.12.14USA 0.25 0.25 0.25 0.25 2.00 USA -0.50 -0.25 -0.25 -0.25 1.00Japan 0.10 0.10 0.10 0.10 0.10 Japan1) -0.15 -0.15 -0.15 -0.15 -1.90Euroområdet 0.75 0.50 0.50 0.50 1.00 Euroområdet - - - - -Danmark 0.20 0.05 0.15 0.25 1.00 Danmark -0.55 -0.45 -0.35 -0.25 0.00Sverige 1.50 1.25 1.00 1.50 2.00 Sverige 0.75 0.75 0.50 1.00 1.00Norge 1.50 1.50 1.75 2.00 2.75 Norge 0.75 1.00 1.25 1.50 1.75UK 0.50 0.50 0.50 0.50 1.00 UK -0.25 0.00 0.00 0.00 0.00Schw eiz 0.00 0.00 0.00 0.50 1.00 Schw eiz -0.75 -0.50 -0.50 0.00 0.00Polen 4.75 4.50 4.00 4.00 4.50 Polen 4.00 4.00 3.50 3.50 3.50Rusland 8.00 8.00 8.25 8.25 8.25 Rusland 7.25 7.50 7.75 7.75 7.25Kina 6.00 5.75 5.75 6.00 6.00 Kina 5.25 5.25 5.25 5.50 5.00Indien 8.00 8.00 7.75 7.75 7.50 Indien 7.25 7.50 7.25 7.25 6.50Brasilien 7.50 7.50 7.50 8.00 10.50 Brasilien 6.75 7.00 7.00 7.50 9.50 1) Against the US3-month rates 3-month spreads vs Euro area 30.8.12 3M 30.6.13 31.12.13 31.12.14 30.8.12 3M 30.6.13 31.12.13 31.12.14USA 0.42 0.45 0.50 0.60 2.50 USA 0.13 0.20 0.25 0.10 1.30Euroområdet 0.29 0.25 0.25 0.50 1.20 Euroområdet - - - - -Danmark 0.31 0.35 0.40 0.70 1.45 Danmark 0.03 0.10 0.15 0.20 0.25Sverige 1.95 1.55 1.50 2.00 2.50 Sverige 1.66 1.30 1.25 1.50 1.30Norge 2.05 2.02 2.27 2.43 3.16 Norge 1.76 1.77 2.02 1.93 1.96UK 0.68 0.60 0.60 0.60 1.25 UK 0.40 0.35 0.35 0.10 0.05Polen 5.04 4.85 4.35 4.30 4.80 Polen 4.75 4.60 4.10 3.80 3.60Rusland 7.17 7.40 7.50 7.50 8.00 Rusland 6.88 7.15 7.25 7.00 6.80Estland 0.00 0.00 0.00 0.00 0.00 Estland -0.29 -0.25 -0.25 -0.50 -1.20Letland 0.61 0.55 0.50 0.50 1.20 Letland 0.32 0.30 0.25 0.00 0.00Litauen 0.89 0.75 0.80 1.10 1.70 Litauen 0.60 0.50 0.55 0.60 0.5010-year government benchmark yields 10-year yield spreads vs Euro area 30.8.12 3M 30.6.13 31.12.13 31.12.14 30.8.12 3M 30.6.13 31.12.13 31.12.14USA 1.64 2.00 2.50 3.00 4.00 USA 0.30 0.25 0.60 0.80 1.35Euroområdet 1.35 1.75 1.90 2.20 2.65 Euroområdet - - - - -Danmark 1.08 1.55 1.75 2.05 2.55 Danmark -0.26 -0.20 -0.15 -0.15 -0.10Sverige 1.38 1.80 2.00 2.60 3.00 Sverige 0.04 0.05 0.10 0.40 0.35Norge 1.97 2.58 2.86 2.96 3.14 Norge 0.62 0.83 0.96 0.76 0.49UK 1.48 1.75 2.00 2.25 2.75 UK 0.14 0.00 0.10 0.05 0.10Polen 4.92 4.80 4.90 5.00 5.50 Polen 3.58 3.05 3.00 2.80 2.85Exchange rates vs EUR Exchange rates vs EUR and USD 30.8.12 3M 30.6.13 31.12.13 31.12.14 30.8.12 3M 30.6.13 31.12.13 31.12.14EUR/SEK 8.363 8.350 8.500 8.600 8.600 EUR/USD 1.26 1.30 1.20 1.15 1.10USD/SEK 6.656 6.423 7.083 7.478 7.818 EUR/JPY 1) 99 104 98 98 99JPY/SEK1 8.465 8.029 8.638 8.798 8.687 EUR/GBP 0.79 0.81 0.78 0.77 0.75DKK/SEK 1.122 1.121 1.140 1.154 1.154 EUR/CHF 1.20 1.20 1.20 1.25 1.30NOK/SEK 1.145 1.113 1.133 1.162 1.147 EUR/SEK 8.36 8.35 8.50 8.60 8.60GBP/SEK 10.54 10.34 10.97 11.24 11.47 EUR/NOK 7.31 7.50 7.50 7.40 7.50CHF/SEK 6.963 6.958 7.083 6.880 6.615 EUR/PLN 4.19 4.00 3.92 3.80 3.70PLN/SEK 1.996 2.088 2.168 2.263 2.324 USD/JPY 78.6 80.0 82.0 85.0 90.0 USD/GBP 1.58 1.61 1.55 1.50 1.47RUB/SEK 0.206 0.207 0.236 0.262 0.270 USD/CHF 0.96 0.92 1.00 1.09 1.18EEK/SEK 0.000 0.000 0.000 0.000 0.000 USD/SEK 6.66 6.42 7.08 7.48 7.82LVL/SEK 12.01 11.93 12.14 12.25 12.23 USD/NOK 5.81 5.77 6.25 6.43 6.82LTL/SEK 2.422 2.418 2.462 2.491 2.491 USD/PLN 3.33 3.08 3.27 3.30 3.36CNY/SEK 1.048 1.010 1.117 1.197 1.282 USD/CNY 6.35 6.36 6.34 6.25 6.101) Per 100 units USD/INR 55.6 55.0 53.0 48.0 45.0 USD/BRL 2.05 1.95 1.85 1.75 1.707 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ SverigeHushållen räddar tillväxten BNP-tillväxten långsamt bättre kommande år… Hushållen på gång Hushållens ekonomiska situation är stabil. Låg inflation …men arbetsmarknaden försvagas i närtid och avtalade löneökningar bidrar till att stärka hushållens Utdragen period med låg inflation köpkraft. De reala disponibla inkomsterna ökar med ca 2 procent per år under åren 2012-2014. Hushållens förbätt- Riksbanken sänker räntan i år och kronan försvagas rade ekonomi återspeglas på bostadsmarknaden. Huspri- serna visar tecken på att stiga igen efter den milda svack-Hygglig tillväxt an under det senaste året. Liksom huspriserna är börskur-Den svenska ekonomin har visat en överraskande mot- sernas utveckling viktig för hushållens konsumtions- ochståndskraft mot turbulensen i vår omvärld. BNP föll vis- sparbeteende, och det kan noteras att Stockholmsbörsenserligen i slutet av 2011 men såväl BNP som sysselsätt- har återhämtat sig något sedan årsskiftet. Förutsättning-ningen ökade igen under första halvåret i år. Den in- arna är således på plats för hushållen och vi räknar medhemska ekonomin var en viktig tillväxtmotor men även en god konsumtionsökning kommande år.utrikeshandeln förbättrades. Tillväxten under första halv-året var förhållandevis god även beaktat att BNP för Investeringarna tappade fart under andra kvartalet i år ef-andra kvartalet troligen revideras ned. ter den kraftiga ökningen under årets inledning. Även om bilden inte är entydig förefaller kapacitetsutnyttjandet haÄven om ekonomin har parerat de globala hindren bättre minskat i flera branscher, vilket minskar investeringsbe-än väntat är tillväxten inte tillräckligt hög för att efterfrå- hovet. Därtill hämmas investeringsviljan av de mörkagan på arbetskraft ska upprätthållas. Vi räknar med att moln som dröjer sig kvar över euroområdet. Bostadsbyg-arbetslösheten stiger till över 8 procent i vinter. gandet faller redan kraftigt och de totala investeringarna utvecklas svagt de kommande kvartalen. Även under enUtsikterna för andra halvåret i år är splittrade och tillväx- stor del av nästa år torde behovet att expandera varaten kommer sannolikt att vara dämpad. Det finns dock måttligt för att sedan tillta under 2014 i takt med en all-förutsättningar för en ökad aktivitet i ekonomin längre mänt bättre konjunktur. Expansiv finanspolitik via ut-fram. Gynnsamt läge för hushållen, en något mer expan- byggd infrastruktur bidrar till att hålla uppe investerings-siv ekonomisk politik och en omvärld som långsamt re- tillväxten under prognosperioden.par sig bidrar till att BNP växer något snabbare kom-mande år. Den svaga omvärldsmiljön gör dock att till- Tuffa tider för exportindustrinväxten inte skjuter fart mer påtagligt och det dröjer till Trots en viss förbättring på senare tid har exporten av va-senare delen av prognosperioden innan arbetslösheten ror stagnerat under det senaste året. Orderingången ärsjunker igen. fortsatt svag och tillväxten i många viktiga handelspart-Sverige: Makroekonomiska nyckeltal (årlig tillväxt i procent om inget annat anges) 2009 (mdkr) 2010 2011 2012E 2013E 2014EPrivat konsumtion 1,533 3.7 2.0 1.7 2.0 2.1Offentlig konsumtion 860 1.9 1.8 0.8 0.5 1.5Fasta bruttoinvesteringar 559 7.7 6.2 2.5 1.0 3.5 - industri 74 1.0 7.9 -2.2 2.2 4.4 - bostadsinvesteringar 92 17.2 15.1 -8.7 -2.2 4.5Lagerinvesteringar* -46 2.1 0.6 -1.1 0.1 0.0Export 1,489 11.7 6.9 1.2 4.2 4.9Import 1,288 12.7 6.3 -0.4 3.8 5.1BNP 3,106 6.2 3.9 1.2 1.8 2.3BNP, kalenderkorrigerad 5.9 3.9 1.5 1.8 2.4Nominell BNP (mdr SEK) 3,106 3,331 3,492 3,580 3,703 3,836Arbetslöshet (% av arbetskraften) 8.4 7.5 7.7 8.0 7.7Sysselsättning 1.0 2.1 0.3 -0.2 0.8Konsumentpriser (årsgenomsnitt KPI) 1.2 3.0 1.2 1.2 2.0Underliggande inflation (årsgenomsnitt KPIF) 2.0 1.4 1.1 1.5 1.5Timlöner (nationalräkenskaper) 0.4 2.9 3.3 3.2 2.8Bytesbalans (mdr SEK) 225 243 259 280 288- % av BNP 6.8 7.0 7.2 7.6 7.5Handelsbalans (% av BNP) 2.6 2.7 2.9 3.0 2.7Offentligt finansiellt sparande (mdr SEK) -2 5 -12 -38 -18- % av BNP -0.1 0.1 -0.3 -1.0 -0.5Offentlig bruttoskuld, % av BNP 39.4 38.4 38.1 39.1 39.6* Bidrag till BNP-utvecklingen, procentenheter8 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Sverigeners är låg. Exporten av varor ser därmed ut att vara fort- Stigande inkomster och konsumtion för hushållensatt dämpad under återstoden av 2012. Exportföretagenbrottas dessutom med en stark valutakurs. Den påverkardock snarare lönsamheten än exportvolymerna. Trycketminskar längre fram då kronan antas försvagas och efter-frågan successivt förbättras.Utrikeshandeln med tjänster, som har ökat kraftigt hittillsi år, är allt viktigare. Från att ha utgjort 6 procent av BNPår 1980 står exporten av tjänster i dag för 15 procent avekonomin. Avsättningsmarknaderna är i stor sett des-amma som för varor där efterfrågan alltså är svag. Det ta-lar för att utvecklingen under första halvåret var tillfälligtstark och att tillväxten försvagas framöver.Låg inflation pressar Riksbanken Svag global utveckling dämpar svensk exportTrots att antalet sysselsatta har ökat något hittills i år kanflera svaghetstecken skönjas på arbetsmarknaden. Tillexempel har efterfrågan på arbetskraft inte varit tillräck-lig för att hålla arbetslösheten i schack. Indikatorerna förarbetsmarknaden är fortfarande på hyggliga nivåer menhar börjat mjukna. Därför räknar vi med att sysselsätt-ningen minskar och att uppgången i arbetslösheten tilltarunder hösten och vintern.En försvagning av arbetsmarknaden följs normalt av enminskad inhemsk inflation. Därtill bidrar kronförstärk-ningen till att kostnaderna hålls nere. Dagens måttliga in-flationstryck sjunker således ytterligare framöver och pe-rioden med en underliggande inflation tydligt under 2- Minskat inflationstryck på hemmaplanprocentsmålet förlängs. Det är ett orosmoment för Riks-banken då det bland annat kan bidra till att trycka ned re-dan fallande inflationsförväntningar ytterligare.Dörren står således öppen för att Riksbanken ska lätta påpenningpolitiken. Låg inflation, en försvagad arbets-marknad, låga styrräntor i omvärlden och risken för enytterligare appreciering av kronan leder till att Riksban-ken sänker räntan i år. Med en bättre konjunktur höjerRiksbanken räntan igen mot slutet av 2013.Paradigmskifte för kronanKronan har i år fått en status av säker hamn på ett stor-migt finansiellt hav. Orsakerna är den svenska ekono-mins begränsade exponering mot ekonomiska oroshärdar, Paradigmskifte för kronansolida offentliga finanser och ett konkurrenskraftigt nä-ringsliv. Det senare manifesteras i en oväntat hög tillväxtoch ökade ränteskillnader. Framöver bedöms kronan för-svagas något mot euron då läget i omvärlden successivtstabiliseras och ränteskillnaderna minskar. Kronan hand-las dock under 9 kronor mot euron hela prognosperioden.Den amerikanska dollarn fortsätter att stärkas mot flerta-let valutor, däribland kronan.Torbjörn Isakssontorbjorn.isaksson@nordea.com +46 614 88599 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ NorwayRisk of overheating may be the biggest challenge Strong domestic demand growth feared. Some export industries are facing difficulties, but for instance strong growth in electricity exports has put a High immigration prevents overheating floor under total export growth. However, while this And Norges Bank may proceed with caution trend is probably only temporary, the strong growth in exports within the engineering industry should continue.The Norwegian economy is showing few signs of weak- It reflects the increasing significance of the oil servicesness and we see no reason to change our optimistic view industry for Norwegian exports. With sustained high oilof the economy going forward. Growth looks set to be prices, prospects are good for this type of exports in thehigh, but with increased labour immigration an overheat- years ahead. Over the forecast period we also see growthing of the economy and sharply rising costs will probably in traditional exports rising, driven by stronger traditionalbe avoided. Wage growth will be much higher than in export market growth.neighbouring countries, but not so high as to push infla-tion above target. However, strong economic growth and The exceptionally strong growth in Norwegian oil in-higher capacity utilisation point to higher interest rates vestment has been vital for the oil services industry.during the next couple of years. But fears of excessive Growth will likely slow in coming years, but it will stillNOK strengthening limit Norges Bank’s room for ma- remain very high. In our view, capacity limitations innoeuvre in monetary policy. many areas will prove the key obstacle to growth in this industry. Pressures in this part of the economy seem to beStrong consumption growth one of main reasons why the wage negotiations, despiteStrong wage and employment growth and very low infla- all the talk of competitiveness and the so-calledtion currently boost consumer purchasing power. It is “frontfagmodell” (meaning that the negotiations start intherefore no surprise that consumption growth in H1 the industries particularly exposed to competition), result2012 was very high after last year’s weaker-than- in pay rises in manufacturing way beyond those in rivalexpected trend. And with an initial high level of savings countries.and a sustained strong labour market we see consumptiongrowth continuing unabated during the remainder of the We also see fairly strong growth in mainland investmentyear and into 2013. In 2013 and 2014 consumption going forward, although the pace is not likely to matchgrowth should slow down as a result of higher interest that of oil investment growth. The propensity to investrates and more moderate employment growth. should be high with strong production gains in large parts of the corporate sector. Higher credit margins and tighterHigher exports, but lower mainland investment bank credit standards could slightly dampen investmentDespite weak growth in export markets, a strong NOK growth, but this effect will likely be largely offset by theand wage growth well above levels in other countries, overall very low interest rate level. A possible sharp es-mainland exports have remained at a higher level than calation of the euro crisis and a new financial crisisNorway: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009(NOKbn) 2010 2011 2012E 2013E 2014EPrivate consumption 1,028 3.7 2.4 3.7 3.5 3.0Government consumption 531 1.7 1.5 2.0 2.5 2.5Fixed investment 516 -5.2 6.4 7.2 4.9 3.7 - gross investment, mainland 349 -2.5 8.0 3.2 3.7 3.7 - gross investment, oil 144 -14.3 9.1 20.0 8.0 4.0Stockbuilding* 14 1.9 0.3 0.0 0.0 0.0Exports 929 1.8 -1.4 1.6 1.1 1.3 - crude oil and natural gas 416 -4.8 -6.2 2.5 0.0 0.0 - other goods 277 2.5 -0.4 0.0 2.0 2.5Imports 660 9.9 3.5 3.0 3.9 3.0GDP 2,357 0.7 1.4 3.4 2.4 2.3GDP, mainland 1,876 1.9 2.4 3.7 3.0 2.8Unemployment rate, % 3.6 3.3 3.0 2.9 2.9Consumer prices, % y/y 2.5 1.2 0.8 1.8 2.1Core inflation, % y/y 1.4 0.9 1.2 1.5 2.1Annual w ages, % y/y 3.6 4.3 4.2 4.3 4.3Current account (NOKbn) 313.6 393.9 437.1 482.9 497.5- % of GDP 12.4 14.5 14.9 15.4 15.1Trade balance, % of GDP 12.4 13.8 14.6 15.1 14.8General govt budget balance (NOKbn) 284.5 375.1 400.0 435.0 450.0- % of GDP 11.3 13.8 13.7 13.9 13.6* Contribution to GDP growth (% points)10 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Norwaycould, however, result in much tighter credit standards, Norwegian manufacturing production risesand this is probably one of the key risks to the Norwe-gian economy.Inflation to edge higherStrong domestic demand growth will contribute to strongproduction growth in the years ahead. However, thanksto high immigration we do not expect labour shortages tobecome a major problem. Nor do we expect major bot-tlenecks in the labour market despite shortages in someskilled areas. Consequently, wage growth should not pickup sharply, but still remain relatively high at just above4% in the years ahead.Wage growth just above 4%, strong domestic demand Higher income growth -> higher consumption growthgrowth and a relatively stable NOK suggest that inflationwill edge higher in coming years. Core inflation may riseto 2% over the forecast period, up from 1% at present,but to drive inflation above the 2½% target, cost growthwould have to be higher.Gradually higher interest ratesAgainst the background of strong growth, a relativelytight labour market, somewhat higher inflation andslightly improved prospects globally, Norges Bank willwant to hike interest rates during the forecast period. Al-so the steady increases in house prices and credit growthfrom high levels suggest higher interest rates. However,with below-target inflation and domestic economicgrowth largely matching capacity growth, Norges Bank Supply and demand growth almost identicalwill not be in a hurry. In the absence of rate hikes inneighbouring countries, an aggressive monetary policyline would only strengthen the NOK to levels that wouldcause inflation to drop further below target.At the time of writing the NOK has strengthened quitesignificantly against the EUR, but measured in terms ofthe trade-weighted exchange rate, the NOK strengtheningis far more modest. We expect Norges Bank to hike itspolicy rate twice next year, but these moves should notresult in a long-lasting period of NOK strengthening. In2014 the pace of monetary tightening may be increasedfurther, but as interest rates in other countries are alsolikely to go up, Norges Bank can hike its policy rateswithout risking excessive NOK strengthening. NOK not so strong in trade-weighted termsThere is a clear risk that the high domestic demandgrowth could result in increased capacity problems, high-er wage growth and consequently gradually higher infla-tion than we project. If so, Norges Bank will act moreaggressively, accepting the effect on the NOK. And theNOK strengthening would contribute to preventing infla-tion from rising above target. If Norges Bank chooses tofocus less on meeting the inflation target and more onpreventing surging house prices and household creditgrowth, the result may be a combination of higher inter-est rates and a stronger NOK. However, judging from thebank’s rhetoric it is not about to change its priorities.Erik Bruceerik.bruce@nordea.com +47 2248 444911 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ DenmarkLanguishing economic growth Rising activity towards 2014 Despite the prospect of a historically high savings ratio our forecast assumes that consumer spending will gradu- Housing market improvement ally increase towards the end of 2014. The accelerating Delayed effect from public money flow consumer spending growth will partly be driven by a pent-up consumption need and partly by generally im- Negative central bank rates work proved sentiment about the Danish economy. Not least the prospect of increasing employment and a pick-up inLow growth and significant uncertainty characterise the the housing market will boost Danish households’ pro-Danish economy; activity has been stuck at largely the pensity to consume over the forecast period.same level since the autumn of 2010. Over coming quar-ters, we expect the Danish economy to gradually return Housing market shows signs of healingto the growth track this year, expanding at a rate of 0.7% Since mid-2008 the ailing housing market has been athis year, accelerating to 1.9% in 2013 and 2.1% in 2014. millstone around the neck of the Danish economy. The contracting housing wealth, slower credit growth and his-On the domestic front the expected reversal of economic torically low activity in the construction sector are sometrends will be driven by households’ large pent-up poten- of the main reasons why consumer spending has stagnat-tial, which will gradually turn into growing consumer ed. However, the latest monthly property price data fromspending. At the same time, growth is underpinned by a Statistics Denmark suggest that housing prices have sta-delayed effect from the public sector, with expected posi- bilised since the start of the year. We believe this devel-tive contributions from consumer spending and invest- opment marks the beginning of a new regime in the Dan-ment. ish housing market where the historically low funding costs and substantial pent-up demand over time will leadConsumers hang on to their money to market consolidation.Although the payout of saved-up early retirement moneyis close to DKK 20bn (already surpassing official fore- But prices will be kept in check by a still large supply ofcasts), the effect on retail sales and consumer spending unsold homes, low turnover and high youth unemploy-has so far not materialised. Instead many have chosen up ment, which limits the number of first-time buyers.save up more; total household bank deposits have Trapped between these two opposing trends, housingswelled to an all-time high. The Danish economy there- prices are likely to remain more or less unchanged duringfore lacks the boost to activity that normally results from the rest of the year. Into 2013 we expect housing pricesconsumer spending. Moreover, the government’s scope to slowly edge higher, surpassing expected inflationfor stimulating economic activity through its tax policy is again in 2014. The moderately rising housing prices willlimited. first and foremost be concentrated in the large cities where demographics suggest growing upward pressure on demand.Denmark: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (DKKbn) 2010 2011 2012E 2013E 2014EPrivate consumption 815 1.9 -0.8 0.6 1.8 1.9Government consumption 497 0.3 -1.3 0.4 0.8 0.8Fixed investment 314 -3.7 0.2 2.8 4.0 4.7 - government investment 33 8.5 5.2 8.5 -12.0 2.5 - residential investment 80 -7.4 8.8 -5.8 4.7 5.0 - business fixed investment 201 -4.4 -3.8 5.0 7.1 4.9Stockbuilding* -20 0.1 0.0 0.0Exports 794 3.2 7.0 2.0 2.9 3.5Imports 731 3.5 5.2 2.6 3.6 3.6GDP 1.3 0.8 0.7 1.9 2.1Nominal GDP (DKKbn) 1,668 1,772 1,783 1,818 1,879 1,949Unemployment rate, % 6.3 6.2 6.3 6.4 6.2Gross unemployment level, 000 persons 164.5 162.1 165.0 168.7 163.2Consumer prices, % y/y 2.3 2.8 2.4 2.0 2.2Hourly earnings, % y/y 2.3 1.8 1.8 1.9 2.1Nominal house prices, one-family, % y/y 2.8 -2.8 -4.3 1.2 1.9Current account (DKKbn) 96.9 119.1 105.0 95.0 85.0- % of GDP 5.5 6.7 5.8 5.1 4.4General govt. budget balance (DKKbn) -47.4 -34.5 -71.0 -40.0 -10.0- % of GDP -2.7 -1.9 -3.9 -2.1 -0.5Gross public debt, % of GDP 42.9 46.6 45.5 44.5 43.0* Contribution to GDP growth (% points)12 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ DenmarkNegative central bank rates a success Stagnant consumptionDuring the debt crisis the Danish central bank has beenforced to pursue a very proactive monetary policy tokeep the DKK stable versus the EUR. As a vital part ofthis defence, the central bank cut its CD rate to -0.20% inearly July. It is the first time in Denmark’s history thatthe CO rate is in negative territory. So far this move hashad the desired effect. The DKK has stabilised at a solidlevel against the EUR without the central bank needingto intervene in the market. This contrasts sharply with thesituation in May and June when more than DKK 36bnwas sold to defend the Danish fixed exchange rate re-gime.Public money flow drying outIn a bid to break the current economic deadlock the gov- The central bank’s CD rate is negativeernment has decided to bring forward public investmentprojects to the tune of DKK 19bn. At the same time pub-lic spending is budgeted to grow by DKK 18bn this yearand an additional DKK 8bn in 2013 – corresponding toreal growth of 1.5% and 0.1%, respectively. Despite the-se intentions public spending decreased by 1.0% in H1,while public investment only increased very modestly.So the Danish economy has so far not received the origi-nally planned boost from fiscal policy. The explanationto this sluggishness should be found in the long imple-mentation period for public investment and in the factthat public-sector spending historically has been very dif-ficult to fine-tune. Against this background, there is alikelihood of a strong ketchup effect in coming quarters, Improved competitivenesswhich will help pull the Danish economy out of the dol-drums provided that the government fulfils its own plans.Improved competitiveness drive exports forwardAfter a brief dip at the beginning of the year, exports aregrowing again – partly driven by sustained growth in keyexport markets, partly by improved competitiveness.This is chiefly a result of a weakening of the trade-weighted DKK, which has made Danish products com-paratively cheaper in international markets.But also the past year’s sharp drop in the pace of wagegrowth combined with productivity gains means that unitlabour costs now increase more slowly than in Den-mark’s key export markets. And although the effect of Decoupling between employment and house pricesthe lower unit labour costs will not feed though untilslightly longer out, it is a vital precondition for maintain-ing the necessary momentum in exports.Helge J. Pedersenhelge.pedersen@nordea.com +45 33333126Jan Størup Nielsenjan.storup.nielsen@nordea.com +45 3333317113 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Finland Finnish economy has cooled down across the board Exports will not recover until 2013 for instance, turned down again in the first half of the year. In our forecast, we assume export volumes to con- Growth in private consumption will slow down tinue declining in the latter part of the year. The decreas- Employment will fall less than previously forecast ing world trade growth will weaken production expecta- tions globally and decrease investment needs. This is bad Public sector deficit will decrease news to the Finnish export industry, as its main products are raw materials, production supplies and investmentAs expected, economic activity has decreased in Finland goods. We expect international demand to strengthenacross the board after the first quarter of this year. Ex- moderately in 2013. Export volumes will increase butports have contracted, investment has continued to de- growth will still remain modest.cline and the growth in private consumption has sloweddown. Imports have decreased more than exports, which Growth in private consumption to slow downis, in particular, a sign of weakening in domestic demand. Private consumption increased at a brisk pace in Q1 thisWhat is positive, is that employment has not yet weak- year compared to Q4 2011. This was a result of the one-ened. However, it is probably only a question of time be- off additional salary items based on collective agree-fore it does. ments, which boosted retail sales, and the car tax hike that entered into force at the beginning of April, whichBased on preliminary data, the economy contracted in Q2 made people purchase new cars earlier than they other-compared to the previous quarter. Our forecast assumes wise would have. The growth in retail sales volumesthat the decline continues in Q3. This means that we be- slowed down markedly in Q2 and in July it stopped alto-lieve the Finnish economy is in recession, just like many gether. Car sales, too, have decreased sharply. Thanks toother European countries. As in our previous forecast, the strong beginning of the year, private consumptionhowever, we believe the recession will not last long and will significantly boost the economic growth this yearthere is no need to change the previous GDP growth despite the recent cooling.forecast of 0.8% for this year. On the other hand, interna-tional trade has cooled down more than expected, which For the remaining part of the year and for 2013, the out-indicates that an export-led recovery from the recession look for private consumption will remain weak. The in-will be much slower than previously estimated. That is crease in salaries and pensions as well as the decrease inwhy we have lowered our forecast for economic growth mortgage interest rates will support households purchas-in Finland in 2013 to 1.2% (previously 1.6%). In 2014, ing power. The growth in purchase power will, however,we expect growth to speed up to 2.8% as especially the be restrained by tax increases and the expected weaken-North-European economies will recover. ing in employment. Taxes will increase as the value add- ed tax will be raised and no inflation adjustments of in-Exports will not recover until 2013 come limits will be made in the income tax brackets. InFinnish goods exports have varied widely over the past addition, the rather rapid growth in consumer prices willyear – and the variation has taken place around a decreas- continue and erode purchasing power. Consumer pricesing trend. New orders received by the industrial sector, are expected to rise by 2.5% next year. The householdFinland: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (EURbn) 2010 2011 2012E 2013E 2014EPrivate consumption 94 3.3 2.5 2.2 1.3 2.0Government consumption 43 -0.3 0.4 0.3 0.5 0.5Fixed investment 34 1.9 6.8 -3.2 0.6 3.8Stockbuilding* -2 0.5 1.1 -0.3 0.3 0.1Exports 64 7.5 2.6 -1.7 2.6 7.1Imports 62 6.9 5.7 -3.0 2.9 6.2GDP 3.3 2.7 0.8 1.2 2.8Nominal GDP (EURbn) 172.3 178.8 189.4 196.0 201.6 210.1Unemployment rate, % 8.4 7.8 7.7 8.0 7.9Industrial production, % y/y 8.3 0.9 -3.0 2.0 4.0Consumer prices, % y/y 1.2 3.4 3.0 2.5 2.3Hourly w ages, % y/y 2.6 2.7 3.5 3.0 3.0Current account (EURbn) 2.9 -2.2 -0.5 0.4 1.2 - % of GDP 1.6 -1.1 -0.2 0.2 0.6Trade balance (EURbn) 2.6 -1.2 -0.1 0.1 0.8 - % of GDP 1.4 -0.6 -0.1 0.0 0.4General govt budget balance (EURbn) -4.5 -1.2 -1.0 -0.1 1.0- % of GDP -2.5 -0.6 -0.5 -0.1 0.5Gross public debt (EURbn) 90.0 93.0 99.0 104.1 108.4- % of GDP 50.3 49.1 50.5 51.6 51.6* Contribution to GDP growth (% points)14 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Finlandsavings rate continues to decline which means that an in- Cooling of world trade brings problems to exportscreasing part of income is used for consumption. The ac-commodating monetary policy is well timed as the con-sumption outlook would be much gloomier without it.Investment to decline, employment to weakenThe bleak short-term outlook for exports, production andconsumption as well as the major uncertainty over theEuro area developments will eat away economic agentsconfidence and thus decrease willingness to invest andweaken employment prerequisites. Machinery andequipment investment increased sharply last year butturned down again already in the beginning of this year.The decline is expected to continue at least for the rest ofthis year. Construction investment is also expected to de- Weak sentiment points to an outright fall in GDPcline. The decrease in the number of granted constructionpermits indicates that the decline in residential and otherconstruction will continue and even steepen during thelatter part of the year. Reconstruction will compensatefor the decline in new construction.We expect both the traditional machinery and equipmentinvestment and construction investment to increase againin 2013. A precondition for this, however, is that theglobal economy will grow as forecast, the Euro area debtcrisis will clear up and confidence will return.The labour market has provided very positive surprisesthis year. Employment measured with the number ofpeople has not weakened (although the number of work- A decline in GDP is bad news for employmenting hours has probably started to decrease) and the num-ber of unemployed people has not started to increase.Seasonally adjusted unemployment rate has stabilised at7.5% in recent months. The unemployment rate for 2012seems to remain at 7.7% (the previous forecast was8.0%), which is lower than in 2011. We still expect un-employment to increase, especially in 2013 with the un-employment rate rising to an average of 8%.Slower decrease in public sector deficitTax revenues will increase at a slower pace due to thesluggish economic growth, even though income taxationwill be tightened and value added tax will be raised. Thepublic sector deficit will, however, continue to decline.The deficit is estimated to decrease to 0.1% of GDP in Confidence + labour market = weak consumption2013 and turn into a small surplus in 2014. The govern-ments annual borrowing need will remain at EUR 4–6bnduring the forecast period, which will increase the publicdebt close to 52% of the value of total production alreadyin 2013.Pasi Sorjonenpasi.sorjonen@nordea.com +358 9 165 5994215 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ USAMoving slowly forward If a perfect storm of fiscal chaos is avoided … After all, the economy’s fundamentals are much im- proved. Businesses are highly profitable, banks have re- ... progress towards full employment in 2014 capitalised and the deleveraging process in the private Stronger underlying inflation pressures set to emerge sector has come a long way. Still, households – especial- ly younger families – are likely to continue the process of Fed to start tightening by mid-2014 balance sheet repair. Home prices seem to have bot- tomed, but the expected slow price increases provide lim-US economic growth is likely to remain moderate in the ited support to household net worth going forward.next few years through 2014, constrained by householddeleveraging, fiscal restraint, subpar global demand, In 2014 growth is expected to slow to a pace more in lineslower working-age population growth and a deteriora- with potential. Full employment, defined as an unem-tion of job skills. ployment rate of 7%, should be achieved in late 2014.The US economy clearly lost momentum during Q2 QE3 only in case of policy errors2012, but recent economic data paint a slightly brighter The effects of the drought in the Midwest on food com-picture, pointing towards GDP growth of 1½-2% in H2 modity prices and a rebound in oil prices are likely to2012. Stronger disposable income growth, easier finan- push headline inflation meaningfully higher by mid-cial conditions and bank lending standards, continued 2013.housing recovery, the end of the payback for the warmwinter weather and less drag from seasonal adjustment With the business cycle adjustment more or less com-distortions suggest that economic momentum will pick pleted in 2014, signs of stronger underlying inflationup slightly in the near term. pressures are projected to emerge in the latter part of the forecast horizon. As a result, we expect the Fed to startHowever, while the threat from the Euro-area crisis cur- raising policy rates and gradual unwind its securitiesrently appears less menacing, US fiscal challenges holdings around mid-2014.around the end of this year imply that risks to the US out-look over the next two to three quarters remain tilted to In the more immediate future, however, the Fed is likelythe downside. The probability of another US recession is later this month to postpone the expected first rate hikeuncomfortably high at 20-25%, in our view. from late 2014 to mid-2015. In our view, the central bank is currently overestimating the labour market slack andOn the other hand, an orderly resolution of the pending hence underestimating the longer-term risk of inflation.fiscal issues, as assumed in our baseline scenario, should Additional asset purchases (QE3) by the Fed are not ex-pave the way for stronger confidence and hence brighter pected unless the Euro-area crisis blows up again or ifeconomic prospects in 2013, when growth is projected to US policymakers fail to resolve the pending fiscal issuesexceed potential assumed at around 2% annually through in an orderly manner.most of the year.USA: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (USDbn) 2010 2011 2012E 2013E 2014EPrivate consumption 9,845.9 1.8 2.5 1.9 2.0 2.1Government consumption and investment 2,967.2 0.6 -3.1 -2.0 -0.9 -0.3Private fixed investment 1,703.5 -0.2 6.6 9.4 6.9 6.9 - residential investment 354.2 -3.7 -1.4 11.7 9.4 12.4 - equipment and softw are 898.3 8.9 11.0 8.3 6.9 6.0 - non-residential structures 451.1 -15.6 2.8 10.2 4.5 3.5Stockbuilding* -154.2 1.5 -0.2 0.2 0.1 0.0Exports 1,587.5 11.1 6.7 4.3 5.2 5.3Imports 1,976.2 12.5 4.8 4.2 5.7 5.4GDP 2.4 1.8 2.2 2.0 2.2Nominal GDP (USDbn) 13,973.7 14,498.9 15,075.7 15,716.1 16,276.1 16,885.0Unemployment rate, % 9.6 9.0 8.1 7.7 7.3Industrial production, % y/y 5.4 4.1 4.0 4.0 4.3Consumer prices, % y/y 1.6 3.1 2.1 2.2 2.2Consumer prices ex. energy and food, % y/y 1.0 1.7 2.1 2.2 2.2Hourly earnings, % y/y 1.8 2.0 2.2 2.1 2.2Current account (USDbn) -442.0 -465.9 -471.5 -569.7 -506.5 - % of GDP -3.0 -3.1 -3.0 -3.5 -3.0Federal budget balance (USDbn) -1,293.5 -1,300.0 -1,100.0 -900.0 -700.0- % of GDP -8.9 -8.6 -7.0 -5.5 -4.1Gross public debt, % of GDP 95.2 99.5 106.5 112.0 116.2* Contribution to GDP growth (% points)16 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ USAA perfect storm of fiscal chaos hopefully avoided Moving slowly forwardThree US fiscal issues pose a threat to the economic out-look: the so-called fiscal cliff, another increase in theTreasury debt ceiling and the need for longer-term fiscalsustainability.As we approach the end of the year, attention will focuseven more sharply on the risk of the fiscal cliff – the un-fortunate coincidence of about USD 600bn in tax in-creases and spending cuts that will take effect next year,should Congress not act to change current law. Failure toscale back the fiscal cliff could knock as much as 4¼%off real GDP in 2013, enough to push the US economyback into recession. Moreover, the Treasury is likely tohit the debt ceiling again in December. Assuming it uses Slow progress towards full employment in late 2014the accounting strategies that have been employed in thepast, the Treasury seems likely to be able to finance gov-ernment operations under the current limit until some-time in February 2013, by which point Congress mustraise the debt ceiling. Failure to do so would imply de-fault on some of the US government’s obligations.With both political parties in full campaigning mode,none of these issues are likely to be resolved before thepresidential elections on 6 November. As seen too oftenduring the past two years, there will most likely be plentyof political brinkmanship and the accompanying uncer-tainty will probably come at a cost to the economy andthe financial markets later this year and in early 2013.The longer the uncertainty persists, the more likely it will Stronger underlying inflation pressures in 2014hurt confidence, hiring, investment and spending.However, our expectation is that when pressured by thethreat of another recession, policymakers will take actionto reduce the fiscal drag on growth (to around 0.5% ofGDP) either during the so-called lame duck session afterthe election or in January when the new governmenttakes office. Obviously, the outcome of the Novemberelections will be very crucial to how the fiscal debateplays out. In this context, the congressional election re-sults will be at least as important as who wins the WhiteHouse, Obama or Romney.Extending the otherwise expiring tax cuts and other eas-ing measures and repealing the automatic federal spend- Recession if economy is pushed off the fiscal cliffing cuts would significantly reduce the risk of recession, 1 1 % points Fiscal policy impact on GDP growth % pointsbut at the cost of a substantially larger budget deficit. 0 0Thus, with an extension of current policy federal debtheld by the public would rise from 70% of GDP today to -1 -1around 90% by 2022 compared to around 60% if current -2 -2law is not changed. In other words, apart from resolvingthe fiscal cliff issue and raising the debt ceiling policy- -3 -3makers will also soon have to address the need to restore -4 -4longer-term fiscal sustainability in order to shift the risk Current law Current policyto the economic outlook from negative to positive. -5 -5 2011 2012 2013 Source: Nordea Marktes, Congressional Budget Office and Office ofJohnny Bo Jakobsen Management and Budgetjohnny.jakobsen@nordea.com +45 3333 617817 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Euro areaRestore confidence to end the recession Gradual recovery from year-end Restoring confidence is key to recovery Why do we expect a recovery when numerous problems Helped by smarter interventions remain unsolved and deleveraging has only just begun? Significant downside risks to inflation Well, because we believe that decisions have been taken and will be taken in the coming months that are decisive Spain heading for deeper recession and will help gradually restoring confidence in the Euro area. After all, monetary policy is extremely lenient, ex-The Euro area is in recession. The second quarter showed port markets are growing decently, the EUR is weaken-GDP contraction and the third quarter most likely will ing and even if more fiscal tightening will be needed intoo. We expect a recovery starting around year-end and a the years to come at least the pace of tightening will bevery gradual pick-up of momentum during 2013. In 2014 slower. Confidence is the missing ingredient that will al-growth will still be somewhat below the pre-crisis “nor- low these factors to work and pave the way for a verymal” level. gradual recovery.We have made a modest upward revision to growth this Restoring confidence takes more time than eroding it,year, but otherwise kept the Euro-area forecast roughly and we do not in any expect that the debt crisis is aboutunchanged compared with our May forecast revision. We to end. Solving the crisis requires massive deleveraginghave revised down our growth forecast for Spain in 2013 in the years to come, structural reforms, growth andafter the announcement of new austerity measures during building new credible institutions to prevent the samethe summer. kind of crisis from happening again. Restoring confi- dence also requires that Greece starts implementing theRecovery from year-end reforms agreed with the Troika.It is fair to say that signs of recovery have been scant upto this point. However, the most forward-looking indica- Interventions will work this timetors for growth in the Euro area as a whole have at least In terms of the decisive action, the ECB seems ready tostopped falling and stabilised at low levels. bring out Big Bertha – more or less the entire arsenal of instruments is being considered. We believe ECB inter-The contraction in Q2 was not as severe as one might ventions in the secondary market – done smarter thishave expected given the financial stress during that peri- time – combined with intervention in the primary marketod with Greek post-election chaos and a Spanish bank by the EFSF/ESM will reduce the level of stress in finan-bailout. Some lagged adverse impact on the economy is cial markets and help restore the confidence that is need-likely to be visible in the Q3 growth numbers, but we ex- ed to embark on a path to recovery.pect Q3 to mark the bottom of the current business cycle. When the ECB intervened through its old programme (the SMP) it did not work very well. Rather it reducedAnother reason that the Q2 numbers were not as bad as the incentive for eg Italy to do the right thing. Therefore,feared is Germany. German growth remained resilient interventions to reduce financial stress never becameduring the first half of the year driven to a large extent by credible. This time, the ECB will intervene with strictthe export sector and to some extent also the German conditionality – ie only in countries that have a bailoutconsumers. At present, the survey-based indicators point programme with promises to reduce budget deficits andto slightly negative growth in Germany in Q3.Euro area: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (EURbn) 2010 2011 2012E 2013E 2014EPrivate consumption 5,128 0.9 0.2 -0.8 -0.4 0.3Government consumption 1,987 0.7 -0.3 0.2 -0.9 -0.8Fixed investments 1,735 -0.2 1.6 -3.0 1.1 2.4Stockbuilding* -48 0.7 0.3 -1.2 -0.1 0.5Exports 3,272 11.0 6.3 1.6 4.9 1.6Imports 3,155 9.4 4.1 -2.3 2.9 1.4Net exports* -0.8 0.7 1.0 1.6 1.0 0.2GDP 1.9 1.5 -0.4 0.6 1.7Nominal GDP, EUR bn 8,917 9,155 9,410 9,512 9,725 9,804Unemployment rate, % 10.1 10.2 11.3 11.6 10.6Industrial production, % y/y 4.3 2.7 -2.6 2.9 5.8Consumer prices, % y/y 1.6 2.7 2.2 1.6 1.6 - core inflation** 1.0 1.7 1.6 1.2 1.0Hourly earnings, % y/y 1.6 2.2 2.3 2.2 2.1Current account, bn EUR -3.2 -1.1 33.1 21.0 17.0Current account, % of GDP 0.0 0.0 0.3 0.7 1.0General government budget balance, % of GDP -6.2 -4.1 -3.7 -3.0 -2.5General government gross debt, % of GDP 85.3 87.2 90.9 93.9 96.4* Contribution to GDP growth (% points)18 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Euro areaundertake reforms – which will make actions on both Gradual recovery from year-endsides more credible. The ECB can intervene in largeamounts and significantly reduce financial stress becausethe ECB does not have to rely on market pressure. In-stead, the crisis bailout country will have to continuouslymeet the agreed conditions, or it not only risks losing ac-cess to the cheap bailout loan but also to the “free” ECBinterventions.Within the next few months we expect Spain to ask forinterventions from the bailout funds and hence from theECB. Italy could follow late this year, as it could be away for the current premier to secure budget disciplinebeyond the April 2013 general elections. Such a politicalmanoeuvre could make the next government obliged to Confidence is crucialcontinuously meet the conditions that Mr Monti agreesupon to get ECB support, or the ECB stops intervening.Limited underlying inflationary pressureConsumer price increases are likely to remain above 2%in the coming quarters despite the ongoing recession.Higher food and energy prices as well as indirect taxhikes in some countries will keep the headline numberselevated. Underlying inflation will, however, graduallyfall throughout most of this year and 2013 before pickingup modestly in 2014. Risks are skewed significantly tothe downside throughout the forecast horizon. Upsiderisks to inflation from the very easy monetary policy areunlikely to materialise within our current forecast hori-zon. Consumer price increases remain elevatedSpain heading for deeper recessionSince our most recent forecast update, Spain has taken aEUR 100bn bank bailout and announced new austeritymeasures totalling EUR 65bn until 2014. The bailout ofSpanish banks seems sufficient to cover near-term capi-talisation needs, as it has also been confirmed by inde-pendent consultants. However, the banking sector re-mains a key concern as the economy heads deeper intorecession.Key elements of the austerity package include a VAThike from 18% to 21% from September this year and cutsin benefits and public wages. As a consequence, we haverevised down our forecast for growth in both 2012 and Monetary policy is extremely lenient2013. On a more positive note, we do expect interventionin Spanish sovereign bonds by the ECB and the rescuefunds and a somewhat reduced level of financial stress.Anders Svendsenanders.svendsen@nordea.com +45 3333 395119 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ United KingdomUK growth stalling – awaiting outside helpThe UK economy has been moving at stall speed lately. Stalling recoveryFour years after the Great Recession first hit the shores ofthe British Isles, the economy is still 4% below its pre-crisis peak and the economy has contracted for the pastthree quarters.Lately, several events have been heavily influencing eco-nomic key figures: The Queen’s Diamond Jubilee gavean extra day off in Q2 that showed up as weakness in thefigures; the weather was horrid, which has depressed re-tail sales, and finally the 2012 Olympics is expected togive an extra (albeit temporary) boost to consumptionand employment during Q3.We are somewhat puzzled by the development in the la- Capacity dwindlingbour market. Employment has increased by 330k overthe past year and while some of those jobs most likelyare related to the Olympics, they have come too early.This could be an indication that the GDP figures are un-derestimating actual growth or a sign of labour hoarding,which could pose a downside risk if the economy fails togain traction.With the UK government’s continued focus on downsiz-ing the public sector, growth is expected to come from anormalisation in exports as export markets recover and amodest recovery in private consumption and growing in-vestment (as an aside, with this forecast total private con-sumption will still be 1% shy of the 2007 level at the endof the forecast horizon). With industrial capacity utilisa- Growth slowly recoveringtion above 80%, we expect this to drive investment innew machinery.The Bank of England (BoE) will keep trying to supportthe economy through more asset purchases (we expectanother GBP 50bn to GBP 425bn) and the Funding forLending Scheme (FLS) which should give incentives forbanks to increase lending to the real economy.Steen V. GrøndahlSteen.grondahl@nordea.com +45 3333 1453United Kingdom: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (GBPbn) 2010 2011 2012E 2013E 2014EPrivate consumption 912.8 1.3 -1.0 0.1 1.7 2.4Government consumption 327.9 0.4 0.1 1.5 -2.0 -1.5Fixed investment 208.7 3.5 -1.4 0.6 3.2 6.3Stockbuilding* 0.9 0.3 -0.1 -0.1 -0.1Exports 404.2 6.4 4.4 -0.4 3.8 3.2Imports 424.8 8.0 0.5 2.3 3.3 4.1GDP 1.8 0.8 -0.4 1.0 1.7Nominal GDP (GBPbn) 1401.8 1466.6 1516.2 1548.1 1592.1 1641.1Unemployment rate, % 7.9 8.1 8.4 8.7 8.6Consumer prices, % y/y 3.3 4.5 3.0 2.2 1.4Current account, % of GDP -2.5 -1.9 -2.3 -2.1 -1.3General govt budget balance, % of GDP -10.4 -8.3 -7.6 -6.4 -4.7Gross public debt, % of GDP 75.7 82.9 89.3 93.2 95.1* Contribution to GDP growth (% points)20 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ JapanThe challenges remain in the long termThe Japanese economy is undergoing a domestic-led re- The recovery is losing speedcovery. As a result of strong post-earthquake restorationactivity, the growth rate in the first half of 2012 averaged3.2%. The pace of recovery is likely to slow during theremainder of the year, with reconstruction spendingdwindling and private consumption decelerating as in-centive programmes expire. In the meantime, sluggishexports to its major trading partners and Japan’s depend-ence on energy imports will continue weighing on itstrade balance. As a whole, the economy will expand by2.5% annually this year. We believe activity will deceler-ate further in 2013 and 2014 to 1.6% and 1.1%.Private consumption has been the major driver behind therobust recovery earlier this year, thanks to incentive pro- The tax hike will cause consumption frontloadinggrammes for eco-cars. However, the budget for eco-carsubsidies is likely to be used up very soon, so auto saleswill see a significant drop. As a result, private consump-tion is estimated to be close to zero by the end of 2012.Based on prior experiences, a consumption tax rate hikeis likely to accelerate private demand in the quarters pre-ceding its effective date. Thus, we expect to see a consid-erable but temporary upswing in economic activity in theperiod between late 2013 and early 2014 due to the con-sumption tax rate hike effective from April 2014.Reducing the public debt burden is a top priority, but thistask is complicated by low growth, persistent deflation,and a rapidly aging population. The consumption tax ratehike effective from April 2014 is a first step towards fis- Social security biggest share of public expenditurecal reforms, but it is far from sufficient to meet the re-quired adjustment of 10% of GDP over the next decade.The debt-to-GDP ratio can be stabilised through deepcuts in social security spending which is the largest andfastest growing component of government expenditure.Alternatively, the consumption tax could be hiked fur-ther. Currently, Japan has the lowest tax rate on con-sumption among OECD countries. However, both op-tions require strong political commitment.Amy Yuan ZhuangAmy.yuan.zhuang@nordea.com +45 3333 5607Japan: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (JPYbn) 2010 2011 2012E 2013E 2014EPrivate consumption 277,209 2.5 0.1 1.8 2.1 1.5Government consumption 93,863 2.2 2.0 1.4 1.3 1.1Gross fixed capital formation 97,914 0.2 0.9 3.6 1.7 1.2Stockbuilding* -5,314 0.7 -0.4 1.0 -0.1 -0.2Exports 59,754 24.5 -0.1 2.2 4.0 4.2Imports 58,094 11.2 6.3 6.7 5.2 5.0GDP 4.6 -0.7 2.5 1.6 1.1Nominal GDP (JPYbn) 471,060 481,857 468,343 487,077 498,279 508,245Unemployment rate, % 5.1 4.6 4.4 4.3 4.3Consumer prices, % y/y -0.7 -0.3 0.2 -0.1 -0.1Current account, % of GDP 3.6 2.0 2.1 2.5 2.4General government budget balance, % of GDP -9.0 -9.7 -9.9 -9.6 -9.0* Contribution to GDP growth (% points)21 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ PolandSlowdown under control Economy losing momentum Fourth, Polish central bankers have ignored threats to economic growth until recently and they raised interest Fiscal consolidation likely to be put on hold rates in May. This controversial hike made the bank one Interest rate cuts just a question of time of a few central banks in the world fighting inflation in- stead of fighting for growth. The move has had an ad- PLN stronger amid yield hunting verse effect on investment and consumption decisions and magnifies the negative impact on lending activity ofSlowdown underway the tightening of regulations by the Polish FSA.Until the end of 2011 Poland seemed to defy economicgravity, with an acceleration in GDP growth in Q4 last Given the prolonged economic downturn in the Euro-year despite recessionary tendencies in the Euro area, area, stronger-than-expected tightening of domestic eco-which takes up over 50% of Polish exports. However, in nomic policy (not only fiscal consolidation, but also in-line with our view, the situation has changed early this terest rate hikes), we have revised down our GDP growthyear as all drivers of Polish growth shifted into lower forecasts for Poland. Now we predict that the country’sgear. economic growth rate could dip below 3% this year and slow down even further in 2013. Compared with its re-First, although with some lag, the Euro-area woes have gional peers and other parts of the EU, Poland would stillfinally started to bite. The weakening external demand outperform, but the slowing growth to below 2% y/yhas been gradually filtering through to the Polish econo- (and below 0% q/q sa) in some quarters will be a markedmy and a long-lasting drop in the inflow of new export change for the country, which was the only one in the EUorders negatively affects exports and industrial output. to avoid recession during the first wave of the crisis inThis time the PLN does not work as an external shock 2008-2009 and grew a robust 4.3% in 2011.absorber because it has shown an appreciation trend sincethe start of this year, contrary to sharp depreciation in Policy response?late 2008 and early 2009 when external demand also We think that the Polish authorities have some toolsslumped. available to avoid a deeper slowdown and to keep it un- der control. First of all, there is room for some monetarySecond, the fiscal consolidation that began in 2011 and policy action. Some central bankers have already sup-continued in 2012 has started to take its toll. Struggling ported officially submitted motions to trim rates in July,to escape from an excessive deficit procedure imposed by but they were a small minority (merely one MPC mem-the European Commission, the government sharply cut ber out of 10 supported the motion to cut rates by 50 bpspending, mainly public investment. This, coupled with and only two members voted for a cut of 25 bp). Hawksthe end of preparations for the UEFA Euro 2012, led to a raised rates only two months earlier and may not want tonotable weakening in activity in the construction sector. be seen performing a dramatic U-turn now. However, we believe that in early 2013 at the latest they will gain aThird, consumption growth is slackening amid a deterio- majority on the rate-setting panel. Winning support forration of labour market conditions and adjustments of earlier cuts could be problematic given the persistentlyhouseholds’ balance sheets. The latter largely involves a high inflation and new upside risks for the headline infla-need to rebuild savings (following a decline in the sav- tion rate (tensions in the global food markets and withings ratio to historical lows) as there is no major delever- food accounting for a large share of the Polish CPI bas-aging pressure on households given that the Polish pri- ket). Positive monetary impulses may be strengthened byvate sector debt to GDP ratio is one of the lowest in the a possible easing of regulations on bank lending.EU.Poland: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (PLNbn) 2010 2011 2012E 2013E 2014EPrivate consumption 810 3.2 3.1 1.9 1.9 3.3Government consumption 249 4.1 -1.3 -0.1 0.0 2.0Gross fixed capital formation 285 -0.4 8.1 3.3 -1.9 4.5Exports 530 12.1 7.5 -3.4 1.9 7.5Imports 529 13.9 5.8 -5.5 -1.4 7.0GDP 3.9 4.3 2.8 2.3 3.1Nominal GDP (PLNbn) 1,344 1,416 1,525 1,625 1,691 1,781Registered unemployment rate, % 12.4 12.5 13.1 13.2 12.5Consumer prices, % y/y 2.6 4.3 3.9 2.7 2.2Current account, % of GDP -4.7 -4.3 -3.6 -3.0 -3.0General government budget balance, % of GDP -7.8 -5.1 -3.3 -3.3 -2.922 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ PolandThere is some room to support the economy also on the Euro-area recession is taking its tollfiscal policy side. Government officials have recently an-nounced that fiscal consolidation would be continued on-ly if it was not detrimental to economic growth. We readthis as an intention to revise previous ambitious plans offiscal deficit reduction to below 1% of GDP by 2015 as itwould be a step too far for the slowing economy. Thepresentation of a further reform drive in September, an-nounced by Prime Minister Donald Tusk before thesummer holidays, will most likely be supplemented by anindication of measures aimed at stimulating economic ac-tivity. However, the room for manoeuvre in fiscal policyis constrained by EU deficit rules and domestic pruden-tial limits on public debt. Moreover, any increase in thegovernment’s investment spending would not be very ef- All growth drivers into lower gearfective given the decreased inflow of EU funds in 2013-2014 (before the new EU financial perspective for 2014-2020 is fully operational from late 2014).Possible policy stimulus will be too little and too late toavoid a further slowdown during the remainder of 2012and the first half of 2013, but together with the recoveryin the Euro area it should be enough to make economicgrowth in Poland return to an upward trend. Economicgrowth beyond 2013 could moreover be fuelled by agradual start of large-scale investment in the energy sec-tor and positive supply side effects of the significant up-grade of the road infrastructure over the past few years.Improved credibility Ambitious fiscal targets likely to be revisedWe estimate that Poland will manage to reduce the fiscalgap to 3-3.5% of GDP in 2012, which will be enough forthe European Commission to remove the excessive defi-cit procedure imposed on Poland and for rating agenciesto affirm Poland’s investment grade rating with stableoutlook. By keeping the deficit around 3% in 2013-2014the government should be able to maintain its restoredfiscal credibility. Also the external relations look favour-able with a moderate current account deficit likely to de-cline further amid weakening domestic demand. Withimproved credibility and no major economic imbalances,Poland has been attracting large foreign capital inflowsand become an alternative to such classical safe-havensas Germany where yields dropped below 0%. Elevated inflation delays monetary easingPLN stronger amid yield huntingAs long as the economic slowdown is under control andthe fiscal deficit remains in check, Poland will offer for-eign investors a combination of relatively strong funda-mentals and a yield pick-up. Therefore, we expect Polishbonds to keep attracting interest and the PLN to remainon an appreciation path. However, the record-high in-volvement of foreign investors in the domestic debt mar-ket is a significant risk factor for the PLN in the event ofa major deterioration of the country’s fundamentalsand/or a surge in global risk aversion.Piotr Bujakpiotr.bujak@nordea.com +48 22 521 36 5123 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Russia Inflation déjà vu Solid growth sustained, but softer H2 expected ficient. Russias exporters will gain USD1.5-2bn a year from the removal of existing trading barriers. Lower tar- Inflation acceleration will prompt CBR to act in H2 iffs on imported goods should lead to cheaper goods and boost consumers’ spending power.The Russian economy continued to expand by a relative-ly fast pace of 4.4% during H1 supported by internal fac- The ongoing large government privatisation programmetors, but we will likely see a soft patch in Q3 due to a is another vector of the Russian liberalisation policy. Thelagged response to the slowdown in export markets and USD 32bn privatisation plan in 2012-2014 and govern-expected weather-related losses in the agricultural sector. ment intention to sell controlling stakes in such backboneHousehold consumption is still the major source of do- companies as Sberbank, VTB and Aeroflot make us verymestic growth. Supported by a healthy labour market, optimistic about the effect of the reform. Privatisationconsumer confidence is growing, unemployment has will continue to improve the country’s investment cli-fallen below 6%, supporting real wage growth, and mate and attract more foreign funds.household credit growth is expanding above 40% y/y; all Food prices a concern againfactors that support household spending. Having reached historic lows, consumer prices did notThe key risk to growth comes from Europe, as more than stay there for long. As expected, consumer price inflation50% of exports go to the EU. However, the negative ef- bottomed out just below 4% y/y in late spring and pickedfect for growth from export markets is partially offset by up visibly over the summer. The favourable food pricethe relatively low impact of net exports on GDP. effects waned and postponed tariff hikes were introduced over the summer a few months after the elections.Opening upAs was widely expected, Vladimir Putin won the presi- Food prices are escalating particularly fast: having bot-dential elections in March for a new 6-year term, and Mr tomed at 1.2% y/y in April, food price inflation hasMedvedev was appointed prime minister. The latest sur- picked up to 5.5% y/y in July. The recent global foodveys confirm very high endorsement levels of Vladimir price increase on supply shortages, similar to the 2010Putin and Dmitry Medvedev. However, the threat of in- food price spike, is a real risk for headline inflation forcreasing dissatisfaction of the middle class along with the the rest of the year. The Russian CPI basket is heavilyoil-oriented economy, force the current government to weighted in food prices (37,3%), which leaves headlineimpose reforms in order to improve financial and busi- inflation exposed to further global food prices increases.ness infrastructure. The WTO entry (23 August) is one ofthe positive triggers on the way. We expect inflation to accelerate further, with headline inflation rising above 6% y/y as early as in August, but itRussia is now committed to bringing its laws and prac- will remain under 7% in coming months unless the RUBtices into compliance with WTO rules. Russia’s com- depreciates and other food prices keep accelerating atmitments include non-discriminatory treatment of im- previous months’ rates. In any case, we expect the centralports of goods and services, reduction of tariffs and bind- bank action and tighter liquidity to help keep inflationing tariff levels, ensuring transparency when implement- below 8% over the forecast horizon.ing trade measures, limiting agriculture subsidies, enforc-ing intellectual property rights of foreign holders of such Monetary policy to be kept tight in coming quartersrights and opening government procurement contract op- The Central Bank of Russia has kept its key rates un-portunities to foreign firms. Entering the WTO will make changed in the previous quarter, but the post-meetingRussia more attractive to foreign direct investment, communication has shifted from very dovish to ratherwhich will help the Russian industry to become more ef- hawkish in recent months. It seems that the CBR paysRussia: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (RUBbn) 2010 2011 2012E 2013E 2014EPrivate consumption 21,203 3.0 6.0 6.2 6.4 6.5Government consumption 8,067 1.4 1.3 1.4 1.3 1.2Fixed investment 8,536 6.1 6.5 7.2 7.8 8.0Exports 10,992 7.1 3.5 3.8 5.5 6.5Imports 7,954 25.6 14.5 9.5 12.0 12.5GDP 4.0 4.4 4.2 4.8 5.0Nominal GDP (RUBbn) 38,807 45,300 47,293 49,280 51,645 54,227Unemployment rate, % 7.5 6.5 5.8 5.5 5.2Consumer prices, % y/y 6.9 8.5 6.3 6.8 7.0Current account, % of GDP 4.8 4.5 4.2 3.0 2.5Central govt budget balance, % of GDP -4.0 0.5 0.2 0.5 0.724 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Russiamore attention to accelerating inflation rather than to Record-low unemployment supports consumerssigns of slowing domestic growth momentum. The bankwill likely tolerate more sustainable credit and consump-tion growth rates going forward, and try to maintain in-flation close to its target of 6% for this year and towardsthe government’s 4-5% goal for the coming years.Now that inflation is accelerating and the risks are to theupside due to food prices, the CBR will not hesitate toact by hiking benchmark repo rates in H2 if inflation de-viates from target. In the meantime, the CBR will intro-duce effective policy tightening by preventing a rise ininterbank liquidity (by reducing provision via repo, lessFX intervention), which will keep money market rates athigh levels. Inflation accelerating againRUB wants to break freeThe moves to more RUB flexibility continue. The Cen-tral Bank of Russia widened the RUB basket (55% USDand 45% EUR) floating corridor band by 1 RUB as of 24July to currently 31.65 – 38.65. The CBR has scaleddown its presence in the FX market significantly over thepast two years, which is part of its attempts to move to-wards an inflation-targeting regime.The widening of the RUB floating band was the fourthsuch move since 2010 towards the promised “free float”by 2014, and we expect similar steps by 6-month inter-vals by the end of 2013. Allowing more RUB flexibilitygives more freedom to change rates without the CBR The tightening cycle will continue in H2having to absorb the capital inflows (and increase inter-bank liquidity).With inflation increasing, the CBR will also be biasedtowards more RUB strength (each 1% in strength ofRUB effective exchange rate brings headline CPI downby 0.25%, if sustained), hence expect also “open mouth”operations each time the RUB weakening risks arise.A more flexible RUB will be more reactive to marketprices, which creates both strengthening opportunitiesand risks. We see a much stronger RUB, on average,based on our oil forecast of close to USD 120/bbl thisyear (above the budget average of USD 100/bbl for thecoming years). We also see Russia being more attractive CBR keeps widening RUB floating bandsfor foreign investors, with sovereign debt/GDP barelyaround 10%. But the flipside of more RUB flexibility isthat any global factors will hit RUB, with episodes ofweakening along the way.Aurelija Augulytėaurelija.augulyte@nordea.com +45 3333 6437Dmitry Savchenkodmitry.savchenko@nordea.ru +7 495 777 34 77 419425 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ EstoniaEconomy remains in a soft patchGrowth continued to moderate in the first half of 2012 in Manufacturing has stabilized, headwinds remaintandem with weaker prospects in key export markets.According to the flash estimate, growth slowed to 2.0%y/y in Q2 from 3.7% at the beginning of the year. Com-pared to Q1 GDP grew by a still decent 0.4% (sa). Themodest export growth is attributable to weaker demandfor industrial goods in Europe and reduced energy ex-ports. Compared to Euro-area peers, Estonian manufac-turing performance has proven relatively resilient to theongoing debt crisis, with production down only 1% y/yby mid-year. To some extent this reflects the businesssectors’ integration with stronger Nordic countries aswell as an ability to adjust to new economic circumstanc-es. Low investment demand and soft confidence in theEuro-area are likely to depress exports in H2, but a grad- Corporate income and profits have largely recoveredual recovery is expected from spring next year.As expected, the economy has now entered a soft patch.Growth is driven by domestic demand, which is reflectedin higher contributions from the construction, trade andinformation and communication sectors. The increase inturnover and the favourable cost level continue to supportprofit growth and hence investment. Private investmentis largely driven by a need to expand business volumesand upgrade technologies and production. Two key in-vestment areas are machinery and equipment, and build-ings and structures. Investment demand is also reflectedin the gradual pick-up of loan demand. Another brightspot for the economy is consumption and in particular re-tail sales as consumer confidence has recovered to its his- Only slight moderation in retail sales expectedtorical average. Stable labour markets and moderatewage growth are likely to support retail sales, with only aslight moderation expected in H2.Overall, the recovery remains vulnerable to the resur-gence of the sovereign debt crisis. The main scenario is,however, a gradual pick-up in stronger export marketssuch as the Nordics and Germany next year.Tönu Palmtonu.palm@nordea.com + 372 628 3345Annika Lindbladannika.lindblad@nordea.com + 358 9 165 59940Estonia: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (EUR bn) 2010 2011 2012E 2013E 2014EPrivate consumption 7.41 -1.7 4.2 3.8 3.4 3.7Government consumption 3.05 -1.1 1.6 2.0 0.9 1.2Fixed investment 2.97 -9.1 26.8 10.0 6.5 7.0Exports 8.96 22.5 24.9 3.7 6.5 6.5Imports 8.15 20.6 27.0 6.5 6.8 6.6GDP 2.3 7.6 2.3 3.5 3.8Nominal GDP (EURbn) 13.84 14.3 16.0 16.9 18.0 19.2Unemployment rate, % 16.9 12.5 10.8 9.9 8.9Consumer prices, % y/y 3.0 5.0 3.7 3.0 2.9Current account, % of GDP 3.8 2.1 -2.3 -1.5 -1.326 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ LatviaEconomy keeps delivering positive surprisesThe economy keeps delivering positive surprises for the GDP still on a steady upward trendsecond consecutive year. After a 6.9% y/y expansion inQ1 2012, the preliminary GDP estimate for Q2 showedan increase of 5.1%. Quarterly growth was estimated at1.0% (sa), unchanged from Q1. Export demand appearsto have been an important driver of growth as the indus-trial volume index grew by 1.8% q/q and the value of ex-ports kept increasing. Fixed investment has likely beendriving domestic demand, while retail sales stagnatedcompared to Q1. While we expect growth to slow in H2as a result of the Euro-area debt crisis weighing on de-mand in main export markets and statistical base effects,we have increased our growth forecast for 2012 to 4.2%.Public finances are sound. The budget deficit is likely to Latvian exports gaining market shareremain below 3% of GDP even after the VAT base ratecut from 22% to 21% in July, while net public debt isslightly above 30% of GDP. The state treasury’s totaldeposits with the Bank of Latvia exceed EUR 1.6bn orabout 8% of GDP, which is enough to cover the budgetdeficit and meet other obligations throughout 2012 and2013. However, the first signs of external imbalances areappearing. Although this is still not worrying, the currentaccount deficit is estimated to be just below 3% of GDPin H1 2012. The reduction of indirect taxes is moreoverlikely to slightly boost imports in H2.Inflation is slowing largely due to the VAT cut. Lower-ing the VAT can be interpreted as a signal that the gov-ernment is serious about adopting the euro in 2014. Es- Inflation slowing, but above the criterionpecially the inflation criterion is subject to many risksbeyond the government’s control, including global foodprices. The 12M average inflation rate in Latvia is stillslightly above the 3% currently required. The inflationcriterion currently includes for example Greece where in-flation is slowing, which is likely to push the criterionlower. At the same time an increase in food prices wouldhave a significant impact on inflation in Latvia as theweight of food in the consumption basket is among thehighest in the EU.Andris Strazdsandris.strazds@nordea.com + 371 6 7096 096Latvia: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (LVLmn) 2010 2011 2012E 2013E 2014EPrivate consumption 8,026 0.4 4.4 3.5 2.6 3.8Government consumption 2,557 -9.7 1.3 0.5 1.0 1.0Fixed investment 2,820 -12.2 24.6 15.2 4.5 7.8Exports 5,742 11.5 12.6 6.2 4.0 6.3Imports 5,935 11.5 20.7 6.3 4.5 6.8GDP -0.3 5.5 4.2 2.5 3.9Nominal GDP (LVLmn) 13,070 12,739 14,161 15,080 15,830 16,890Unemployment rate, % 18.7 16.2 15.7 14.5 12.8Consumer prices, % y/y -1.1 4.4 2.3 2.5 2.8Current account, % of GDP 3.0 -1.2 -3.2 -3.5 -3.627 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ LithuaniaShowing resilienceThe Lithuanian economy remains resilient to the on- Resilience of retail trade and industrial productiongoing European sovereign debt crisis and continues togrow albeit at a slower pace than in 2011. Annual eco-nomic growth slowed to 3.9% in Q1 2012 and further to2.1% in Q2 2012, but is forecasted to remain positive,averaging 2.7% and 3.3% in 2012 and 2013, respectively.Weaker-than-anticipated growth in Q2 2012 was aboveall the result of a temporary shutdown of the OrlenLiLetuva refinery (from end-April to mid-June) that ac-counts for close to 30% of all industrial production inLithuania. Consequently, industrial production contract-ed by 2.8% in Q2 2012 whereas excluding the productionof refined petroleum products, industrial production con-tinued to grow at a robust 6.2% y/y. Meeting Maastricht inflation criterion is a big “if”After the temporary slowdown in April, retail tradegrowth accelerated to 4.9% y/y in June with growth ofnon-food items increasing to 12.1% y/y. Stable house-hold sentiment suggests that retail trade growth shouldremain in positive territory in coming months. As a re-sult, private consumption will continue to play a leadingrole in Lithuanian economic growth.Inflationary pressures eased in Q2 2012, but average an-nual inflation still stood at 3.6% in July – well above theMaastricht convergence criterion of approximately 3.0%.Even though inflation is expected to moderate to 3.0% bythe end of 2012, there is still a high probability that Lith-uania will not be able to meet the Maastricht inflation cri- Budget deficit declining in line with expectationsterion in early 2013.The budget deficit is gradually declining and is expectedto fall below 3% of GDP in 2012. Nonetheless, in case ofa more severe recession in the Euro zone, there is a riskthat the deficit will exceed the 3% mark and thus fail tomeet the euro convergence criteria. Overall, we see euroadoption in 2014 as an unlikely scenario at the moment.Žygimantas Mauricaszygimantas.mauricas@nordea.com + 370 5 2657 198Lithuania: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (LTLmn) 2010 2011 2012E 2013E 2014EPrivate consumption 63,497 -4.9 6.1 3.5 3.2 3.3Government consumption 20,180 -3.3 0.2 0.7 1.8 2.0Fixed investment 15,808 1.0 17.1 4.7 7.0 7.2Exports 50,000 17.4 13.7 3.0 6.5 6.5Imports 51,372 17.3 12.7 3.8 6.9 6.8GDP 1.4 5.9 2.7 3.3 3.5Nominal GDP (LVLmn) 91,913 95,074 106,019 112,100 118,800 126,500Unemployment rate, % 17.8 15.4 14.0 12.8 11.5Consumer prices, % y/y 1.3 4.1 3.0 2.8 3.0Current account, % of GDP 1.1 -1.6 -2.7 -3.0 -3.0General govt budget balance, % of GDP -7.2 -5.5 -2.7 -3.0 -3.028 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ ChinaStability, stability and … stability fallen according to People’s Bank of China’s quarterly Stabilising growth is once again top priority survey of bankers, so monetary tools may prove to be Leadership change in the spotlight less effective now. Thus, the central bank will remain cautious in fear of increasing inflationary pressure and A close eye on local government stimulus plans misleading the markets regarding real estate controls. CNY volatility persists Princelings to rule the countryGrowth target is not imperilled The fifth generation of leaders since the establishment ofThe government-induced slowdown in China as a part of the People’s Republic of China will take over power inthe transition towards a sustainable consumption-driven the autumn of 2012, when the 18th National Party’s Con-economy ran into stronger-than-anticipated headwinds in gress is set to take place in Beijing. The Politburo Stand-the first half of 2012. The uncertain outlook has prompt- ing Committee, the most powerful decision-making bodyed the authorities to make stable growth on top priority. in China, will replace all but two of its nine members. AThe latest monetary and fiscal stimulus measures will handful of senior officials are seen as the likely candi-support growth in the second half of this year. dates to join the prestigious and secretive group. Most of them come from prominent families within the Com-In the near term, China’s economy remains vulnerable to munist Party, the so-called “Princelings”. They are betterexternal risks. According to Commerce Minister Chen educated and more internationally-oriented than theirDeming, China may risk not achieving 10% export predecessors. We believe the event will go smoothly, asgrowth this year. Despite emphasis from Beijing, private the internal power struggles are probably resolved duringconsumption has not taken the lead in driving growth. the top official meeting in Beidaihe in early August. WeWhile we expect it to take a bigger role in future, this do not expect any major reforms to be launched in thewill not happen anytime soon. Looking forward, China near future after the shift of power, since stability is val-will continue relying on investments, the remaining ued over change.growth engine, to ensure a steady growth rate. We esti-mate GDP to grow by 8-8.5% in our forecast period Not only will the top leadership be replaced, but in the2012, 2013 and 2014. country’s 31 provinces and province-level municipalities, 361 cities, 2,811 counties and 34,171 townships, millionsInflation makes room for monetary policy easing of party members are also in the middle of being reshuf-Inflation has decreased as expected due to moderating fled. Regional GDP has traditionally been a measure tomeat prices and basis effects. Full-year inflation will be evaluate their performance, so in the upcoming monthscomfortably below the government’s target of 4%. The we will see intensified local emphasis on boostingrecord-high global grain prices are likely to have little growth, mainly through investments.impact on Chinese inflation. China is self-sufficient in Property market – a balancing actcorn and wheat and it had a robust harvest this year. Thebiggest impact on Chinas food inflation will be rising China’s property market was once dubbed the “most im-soybean prices, since 80% of the domestic consumption portant sector in the entire global economy”. It remains ais imported. However, based on experience from 2008, big fear hanging over the policy makers. The challenge isthe effect will not be significant. to balance between on the one hand bringing down house prices and increasing housing affordability and on theWith the low inflation and uncertain growth outlook, the other hand preventing the cooling property sector’s nega-political stand has shifted from balancing growth and in- tive spill-over on the domestic economy. The latest mod-flation towards emphasising growth. We expect to see est rebound in house prices could be a result of the poli-another rate cut before the end of Q3. Credit demand has cies to encourage real housing demand, but it may also reflect a misreading of central government policy. Evi-China: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (CNYbn) 2010 2011 2012E 2013E 2014EPrivate consumption 12,113 9.1 5.8 9.0 9.1 10.0Government consumption 4,569 9.0 12.9 8.9 8.8 9.0Fixed investment 15,668 22.5 11.4 8.5 9.2 9.0Stockbuilding* 778 0.5 0.2 -0.4 0.0 0.1Exports 9,106 -10.3 28.4 8.5 8.5 9.1Imports 7,603 4.1 20.1 8.6 10.0 11.0GDP 9.2 10.5 8.0 8.3 8.5Nominal GDP (CNYbn) 34,632 39,431 45,590 50,655 56,986 64,394Unemployment rate, % 4.1 4.1 4.1 4.1 4.1Consumer prices, % y/y 3.3 5.4 3.1 4.0 3.8Current account, % of GDP 5.1 2.8 2.5 2.2 1.5General government budget balance, % of GDP -1.7 -1.1 -1.5 -2.3 -1.9* Contribution to GDP growth (% points)29 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Chinadence suggests that some local governments have eased A steady GDP growth is desiredproperty restrictions surreptitiously regarding multiplehousing purchases, hoping to revive construction jobsand land sales. We believe the central government willmaintain its favourable policies for first-time home buy-ers, while continuing to rein in speculative demand andtighten control of local implementations.Local officials should be kept on a tight leashThe only economic anxiety to rival the housing market isthe local government’s investment plans which shouldnot be neglected. After recognizing that the 4trn yuanpackage in 2008 was a mistake that left the country withstubborn inflation, messy local-government finances andskewed investments, the Politburo has rejected that its Property prices show signs of mild recovery2012 stimulus efforts might entail the same loss of disci-pline as in 2008. However, this view is not shared by thelocal authorities, which have all developed their ownambitious plans. The most remarkable case is the Gui-zhou province’s 3trn yuan investment on culture andtourism, which is more than five times its 2011 GDP.Even though not all projects will be approved by the cen-tral administration, the local authorities have their waysto circumvent the rules.These projects will be financed through local governmentfinancing vehicles which have already accumulated hugeoff-balance-sheet debt. Several unofficial sources havegiven their estimates on the size of the total local debt,ranging from 50% to more than 100% of GDP (27% by Most investment funding through financial vehiclesofficial auditors). The high indebtedness raises concern,as the profitability of these projects and their ability toservice the debt is doubtful. Numerous infrastructure pro-jects have been found in poor quality without the abilityto withstand bad weather conditions. A governmentstudy showed 30% of the 4trn investments from 2008have failed. In addition, the local investment plans aremore likely to cause inefficient resource allocation andovercapacity than if it was managed from the central.CNY to continue its two-way volatilityThe intensified slowdown in China has had a spill-overon the CNY which has weakened remarkably against theUSD since May. Premier Wen Jiaobao has reiterated thatthe CNY is near its fair value and that a liberalised cur- Continued CNY volatility aheadrency is not necessary a stronger currency. With theshrinking current account deficit and sluggish economicoutlook, the top officials have an incentive to let theCNY continue its weakening course in the short term. Inthe longer term, we expect the CNY appreciation to con-tinue, mainly because of the strong underlying growth inChina. The appreciation of the CNY is by no means over,although we see a slower and more volatile trend ahead.Amy Yuan ZhuangAmy.yuan.zhuang@nordea.com +45 3333 560730 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ IndiaA drought of growthEconomic activity in India began decelerating in late Weak domestic economy weighed on growth2011 and the conditions have only deteriorated during thefirst eight months in 2012, hampered by both domesticand global factors. External demand has weakened fol-lowing the slowdown in developed countries and China.The domestic economy is severely hit by the poor mon-soon (20% below normal) that led to falling agriculturalproduction and dropping rural incomes.Despite falling over several months, WPI inflation, In-dia’s key inflation measure, still has not moved closer tothe central bank’s comfort level of 5%. The below-normal rainfall this year will hurt the crop output as 60%of the production is rain-fed. The resulting higher foodprices and elevated fuel prices will keep inflation above WPI inflation kept above the comfort levelthe 5% mark in the short term. Consequently, the Re-serve Bank of India is unable to utilise its monetary toolsto support the downward-trending economy. Thus, as in-flation remains a major concern we expect the centralbank to leave the repo rate unchanged at 8% this year.The stubbornly high inflation also erodes households’purchasing power and dampens private consumption.The slowdown in India is not only cyclical but also struc-tural. The unhealthy public finances of the country pre-vent fiscal policy from being eased to boost growth. Infact, the weaker INR from the beginning of the year hasfurther increased the fuel subsidy bill and hence publicexpenditure, as import prices have surged. Deficit anddebt as a percentage of GDP are approaching the levels Public finances to deteriorate additionallyseen in southern Europe. Standard & Poors and Fitch al-ready cut their outlook for India to negative. With par-liamentary election scheduled for 2014 and the weak po-sition of the current government, it seems likely that itwill maintain stability at the expense of reforms in retailindustries and a reduction of fuel subsidies.Regardless of the recent decline in the economy, we con-tinue to take a positive view on India’s long-term growth.This is primarily based on the favourable demographicsand large pool of available labour.Amy Yuan ZhuangAmy.yuan.zhuang@nordea.com +45 3333 5607India: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (INRbn) 2010 2011 2012E 2013E 2014EPrivate consumption 37,081 8.1 5.5 5.5 6.5 8.0Government consumption 7,743 7.8 5.1 5.2 6.0 5.5Fixed investment 20,418 -16.8 5.5 5.5 8.0 9.8Exports 13,000 15.6 18.5 9.5 12.0 16.0Imports 16,469 9.6 9.5 12.0 13.0 15.0GDP 9.6 6.9 6.0 6.7 7.2Nominal GDP (INRbn) 64,574 76,741 88,558 100,071 113,080 128,911Wholesale prices, % y/y 9.6 9.5 7.5 6.8 7.0Current account, % of GDP -3.3 -2.8 -4.0 -3.0 -2.2General government budget balance, % of GDP -3.6 -6.6 -7.0 -7.5 -8.031 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ BrazilSlow BRIC healingThe economy has disappointed in the first half of this Growth stabilisingyear with industrial production again dragging downgrowth. It seems, however, that the worst is behind usand even though manufacturing indices are still reflectingcontraction, recent activity and business confidence read-ings show improvement. The government announced anumber of supply-side initiatives to support industry, in-cluding an increase in public infrastructure spending andconcessions to the private sector as well as lower energyand payroll tariffs. Private sector demand remains sup-ported by a continuous decline in unemployment, and re-tail sales have rebounded strongly over the past fewmonths helped also by a reduction in credit rates and tax-es. This supports our expectation that GDP growth willmove back above 4% y/y by Q4 this year. Policy easing cycle nearing the endThe central bank of Brazil continued its aggressivemonetary policy easing this year, cutting the benchmarkSELIC rate from the peak of 12.5% last year to 8.00%currently. With signs of improved economic momentumand more optimistic policymakers, we believe the easingcycle has ended, with the risk tilted towards just onemore rate cut. After having approached the central bank’starget (4.5%) earlier this year, inflation has begun to ac-celerate again. This trend will likely continue and even-tually force policymakers to start tightening in late 2013.The Brazilian central bank chose to tolerate further BRLweakness early this year, allowing the USD/BRL toweaken to the 2.00 level which the markets have per- More balanced capital inflowsceived as the bank’s comfort zone (judging from inter-vention patterns). We expect gradual BRL strengtheninggoing forward, supported by commodity prices and theend to the policy easing cycle. Notably, policymakershave achieved a rebalancing of capital inflows becauseover the past years as portfolio inflows have declined, themore stable foreign direct investment flows have grown.This should help prevent disorderly BRL moves whenglobal capital flows shift.Aurelija Augulytėaurelija.augulyte@nordea.com +45 3333 6437Brazil: Macroeconomic indicators (% annual real changes unless otherwise noted) 2009 (BRLbn) 2010 2011 2012E 2013E 2014EPrivate consumption 1,979.8 7.0 4.5 4.3 4.8 5.5Government consumption 687.0 4.0 3.0 3.2 3.0 3.0Gross fixed capital formation 585.3 22.0 6.0 3.0 6.5 7.4Exports 355.7 11.5 8.5 6.6 7.0 8.0Imports 360.8 36.3 12.8 6.9 7.2 9.0GDP 7.6 2.8 2.6 4.6 4.8Nominal GDP (BRLbn) 3,239.4 3,721.5 3,825.7 3,925.2 4,105.7 4,302.8Unemployment rate, % 6.7 6.0 5.7 5.6 5.7Consumer prices, % y/y 5.0 6.4 5.2 5.4 5.8Current account, % of GDP -2.3 -2.1 -2.5 -2.7 -2.8General government budget balance, % of GDP -2.7 -2.4 -2.0 -2.1 -2.232 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ OilOil prices stay high but spare capacity buffer should buildOil prices are expected to remain high over the forecast Oil price forecasts Brent – baseline (USD/barrel)period as the market will remain tight by historical stand- Q1 Q2 Q3 Q4 Yearards. Supply additions are expected to outpace demand 2011 106 115 112 110 111growth resulting in slightly softer oil balances in 2013. 2012E 118 109 112 109 112The market will remain similarly tight in 2014 as supply 2013E 108 110 112 114 111growth slows and demand accelerates with the global 2014E 114 114 116 116 115 Source: Nordea Marketseconomy. Oil prices will likely remain volatile aroundhigh levels given the market tightness and risks to sup- Supply growth to outpace demand growthply.Income growth, economic activity and population growthare vital drivers of oil demand. Global oil demand is ex-pected to increase at a higher pace in 2013-14 than in theprior two years as economic growth picks up. OECDdemand will continue to decline owing to efficiencygains, fuel switching and subdued economic growth.Non-OECD countries contribute to all oil demandgrowth, which averages 1.1mb/d over 2013-14. Structur-ally higher economic growth, rising income and popula-tion growth in emerging economies is expected to out-weigh efficiency gains in oil use and switch to other en-ergy sources. Demand for transportation is expected toremain the primary driver of global oil use, accounting OPEC spare capacity to increase from low levelsfor around 52% of total oil demand.Global oil supply is expected to grow in the forecast pe-riod mainly driven by a healthy expansion of oil produc-tion capacity in North America, Iraq, Brazil and OPECNGLs. Non-OPEC is expected to account for the lion’sshare of new capacity brought online. We expect the pastfew years’ impressive growth in US shale oil/tight oiland Canadian oil sands production to continue, althoughinfrastructure and environmental issues may restrain fu-ture advances. In Brazil local content requirements andcost inflations could continue to challenge the country’sexpansion plans. We only foresee a slight resumption ofthe oil production in Libya, Yemen and Sudan/South Su- Oil price baseline, high and low risk scenariosdan in the forecast period after political unrest has cut oilproduction in total by around 1 mb/d. OPEC capacity isexpected to increase in the forecast period. Capacity ex-pansions in Iraq, Angola, United Arab Emirates and thereturn of Libyan oil are expected to outmatch the naturalproduction /sanctions related declines in Iran and smallerdeclines in Nigeria and Venezuela. How long Iran couldstand the EU/US imposed sanctions is uncertain. We ex-pect production to gradually resume in late 2013, but thepolitical situation could take a twist for the better orworse before/after this time. Political unrest and un-planned production outages are expected to leave globaloil supply at risk.Bjørnar Tonhaugenbjornar.tonhaugen@nordea.com +47 2248 7959Thina M. Saltvedtthina.margrethe.saltvedt@nordea.com +47 2248 799333 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ MetalsMetal prices scratching the bottom for nowBase metals prices have trended lower since March as the Base metal price forecasts (USD per tonne)economic slowdown gathered pace driven by Euro-zone 2012E 2013E 2014Ewoes. China’s demand for metals has slowed, but a grad- Aluminium 1,967 2,225 2,450ual pick-up in the country that consumes 40% of the Copper 7,865 8,025 7,950 Nickel 17,463 18,625 19,750world’s industrial metals output is expected already in Zinc 1,926 2,100 2,300the latter part of this year as infrastructure projects are Source: Nordea Marketsfast-tracked to support growth. Long-term prospects formetals demand are robust despite the current slowdown, Base metals pricesleaving pressure on supply to continue expanding. Metalsmarkets are expected to tighten gradually and prices torise from the current low levels compared to costs.Aluminium producers are experiencing the second-worstyear since 1982 as low prices have persisted longer thanexpected. The current situation is unsustainable in themedium term and further capacity cuts are expected.Demand outside Europe and Japan is expected to growrobustly as aluminium continues to win market share dueto its flexible uses and cost-competitiveness. The projectpipeline in the World ex China is practically dry beyond2013, while Chinese capacity expands strongly. Lowprices will persist for longer than previously expected be- Copper and aluminium forecastfore they realign with industry costs at higher levels.Copper supply is improving and the outlook for supplyover the forecast period looks better than in a long time.Demand is expected to recover over the forecast period,led by China, and keep pressure on copper suppliers todeliver according to plans. An increasing share of coppersupply will come from new projects (greenfields) espe-cially in 2014, leaving the likelihood for disruptionshigh. Copper prices are expected to remain high andfirmly above the long-term incentive price of USD 6,500per tonne, thus underpinning greenfield projects.Nickel prices continue to underperform on expectationsof steady supply additions. The market is expected to re- Nickel and zinc forecastmain in surplus over the forecast period, leading to in-ventory build-ups despite a gradual recovery in demand.Supply from the new generation of nickel production(HPAL) has been mixed, but is expected to contribute toa larger share of total supply, but with risks of delays andtechnical setbacks. Nickel prices are expected to increasefrom current levels which are considered too low com-pared to production costs in the long run.The zinc market will remain in surplus in the first part ofthe forecast period, but a gradual tightening of the marketis expected to commence in 2014 as a number of oldmines approach the end of their life. The currently de-pressed zinc prices are expected to recover gradually be-fore higher prices are required to balance supply and de-mand in the latter part of the forecast horizon.Bjørnar Tonhaugenbjornar.tonhaugen@nordea.com +47 2248 795934 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Alternative scenario 1Back on trackWith plenty of negative headlines and few signs of the Scenario forecastGreat Recession loosening its grip, it is easy to succumb 2011 2012E 2013E 2014E World GDP growth % 3.8 3.2 4.1 4.9to gloom and doom. Sometimes though, the darkest hour - USA 1.8 2.2 2.8 3.4is just before the dawn. In this scenario we try to high- - Euro-zone 1.5 -0.6 1.2 2.7light a few events which could help create a growth sur- - China 10.5 8.2 8.6 9.0prise. Global Inflation (CPI) % 4.1 2.6 3.1 2.9 - US 3.1 2.3 2.8 1.9The German Constitutional Court rules that the ESM is - Euro-zone 2.7 2.4 2.8 3.1 - China 5.4 3.1 3.8 4.0not in violation of German law and at the same time Eu- Unemployment %ropean officials fast-track the creation of the common - US 9.0 8.1 7.3 6.4banking supervisor, which comes into action before the - Euro-zone 10.2 11.4 11.7 11.0end of the year. The ESM comes into action and immedi- - China 4.1 4.1 4.0 3.9ately starts to replenish bank capital directly and to buy Budget deficits %bond issuances of peripheral Euro-zone countries. - US -8.6 -6.0 -4.2 -3.5 - Euro-zone -4.1 -3.5 -2.1 -0.9 - China -1.1 -2.6 -2.2 -2.2 In the US, the fiscal cliff is avoided as a political Financial indicators solution is found that prolongs the current tax cuts - US 3M LIBOR 0.34 0.45 0.85 2.25 for everybody, military spending and entitlements - US 10Y Treasury 2.79 1.80 2.70 3.90 are cut slightly and work on medium-term balancing - EZ 3M Euribor 1.39 0.66 0.50 1.60 of US finances resume. - DE 10Y Bund 2.65 1.55 1.85 2.60 Chinese officials loosen fiscal policy, economic - EUR/USD 1.30 1.22 1.10 1.00 - Brent Oil 111 107 125 125 growth comes slowly back to life in Europe and China continues its push to grow domestic demand by expanding health insurance and lowering interest rates. Growth moves above 8% again. Massive pressure from the US, the G20 and the IMF convinces European politicians that focus needs to be on balancing structural budgets over the medi- um term, allowing fewer tax hikes and few or no cuts in government spending. With the negative feedback loop between banks and sovereigns in Europe finally broken, businesses and consumer confidence gets a big boost and business finally dare to invest again. Consumers loosen their purse strings slightly. Oil demand increases but continued exploration af- ter shale oil keeps oil prices from moving too high.Much of the current slowdown can be attributed to thenegative feedback loop from shaky government finances,worries about the survival of the Euro zone – and simplyfear of what the future has in store.If governments can finally convince investors and con-sumers that they are on top of the situation in Europe, in-vestors might offer governments a bit more time to allowpolicies to work, interest rates in peripherals will comedown, worries about sovereign defaults will subside,businesses will start to invest again and consumers willbe willing to increase consumption. A normal recoverywill start to unfold with an extra boost from low interestrates and pent-up demand.Steen V. Grøndahlsteen.grondahl@nordea.com +45 3333 145335 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Alternative scenario 2That sinking feelingAs European leaders return from their holidays, they are Scenario forecastonce more forced to deal with a deteriorating economic 2011 2012E 2013E 2014E World GDP growth % 3.8 2.8 1.6 3.1outlook. The situation in Southern Europe is dire but - USA 1.8 1.9 0.8 2.7many other developed economies are holding up reason- - Euro-zone 1.5 -0.7 -2.0 0.0ably well. That might change. In this scenario we try to - China 10.5 7.4 6.2 6.7list a few things that can sink growth further. Global Inflation (CPI) % 4.1 2.5 1.6 1.4 Northern European countries are sticking to the - US 3.1 2.0 1.0 1.2 - Euro-zone 2.7 2.5 2.1 1.2 Merkel doctrine of hard austerity. At the same time, - China 5.4 3.2 1.7 1.8 voters send clear signals not to allow any more Unemployment % bailouts. - US 9.0 8.4 9.2 8.7 ECB is unable to intervene in European bond mar- - Euro-zone 10.2 11.4 12.1 12.0 kets due to stiff opposition from the Bundesbank and - China 4.1 4.3 5.0 5.6 likeminded central banks. Their only option is to cut Budget deficits % - US -8.6 -7.2 -6.5 -6.0 rates to zero, do more LTRO and loosen collateral - Euro-zone -4.1 -3.6 -2.8 -2.6 demands, but that is about it. - China -1.1 -2.8 -3.1 -3.2 With continued turmoil in Europe and worries about Financial indicators the fiscal situation in the US, companies freeze on - US 3M LIBOR 0.34 0.40 0.40 0.60 investments and hirings. The uncertainty and the be- - US 10Y Treasury 2.79 1.70 1.20 1.60 ginning job losses feed directly into private con- - EZ 3M Euribor 1.39 0.60 0.25 0.25 - DE 10Y Bund 2.65 1.50 0.90 1.20 sumption and house prices take another dive exag- - EUR/USD 1.30 1.22 1.18 1.18 gerating the drop in consumption. - Brent Oil 111 111 82 92 Oil prices drop below USD 80 a barrel (but averag- es USD 80 a barrel for the year) which supports dis- posable income growth especially in the US. With major export markets slowing, the Chinese economy slows during the first half of the year but more rate cuts from PBoC as well as directed in- vestments from the Chinese government provides a gentle lift to Chinese economy in the second half of the year. Flight to safety is in effect with investors fleeing to the Nordics, Germany, the US and the UK (and se- lected other countries). Spreads on peripherals widen further and yield on Spanish and Italian bonds top 8%.In our downside risk scenario, World GDP is expected toincrease by 1.5%. This might seem high but bear in mindthat from 1982 to 2007, World growth averaged 3.5% –but also that GDP dropped 0.6% in 2009.An added cause for worry is that much of the fiscal fire-power has been spent in the aftermath of the financialcrisis, making it more difficult to arrest the developmentshould growth take a turn for the worse.Steen V. Grøndahlsteen.grondahl@nordea.com +45 3333 145336 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Economic Research NordeaEconomic Research Nordea Denmark: Sweden: Annika Winsth, Chief Economist Sweden Helge J. Pedersen, Global Chief Economist annika.winsth@nordea.com, tel. +46 8 614 8608 helge.pedersen@nordea.com, tel. +45 3333 3126 Torbjörn Isaksson, Chief Analyst Johnny Bo Jakobsen, Chief Analyst torbjorn.isaksson@nordea.com, tel. +46 8 614 8859 johnny.jakobsen@nordea.com, tel. +45 3333 6178 Andreas Jonsson, Senior Analyst Anders Svendsen, Chief Analyst andreas.w.jonsson@nordea.com, +46 8 534 910 88 anders.svendsen@nordea.com, tel. +45 3333 3951 Bengt Roström, Senior Analyst Jan Størup Nielsen, Senior Analyst bengt.rostrom@nordea.com, tel. +46 8 614 8378 jan.storup.nielsen@nordea.com, tel. +45 3333 3171 Linus Lauri, Assistant Analyst Amy Yuan Zhuang, Senior Analyst linus.lauri@nordea.com, tel. +46 8 614 80 03 amy.yuan.zhuang@nordea.com, tel. +45 3333 5607 Siri Pettersson, Assistant Analyst Aurelija Augulyte, Analyst siri.pettersson@nordea.com, tel. +46 8 614 80 03 aurelija.augulyte@nordea.com, tel. +45 3333 6437 Georg von Wowern, Assistant Analyst Estonia: georg.von.wowern@nordea.com, tel. +45 3333 6102 Tönu Palm, Chief Analyst tonu.palm@nordea.com, tel. +372 628 3345 Henrik Lorin Rasmussen, Assistant Analyst henrik.l.rasmussen@nordea.com, tel. +45 3333 4007 Latvia: Daniel Freyr Gustrafsson, Assistant Analyst Andris Strazds, Senior Analyst daniel.freyr.gustafsson@nordea.com, tel. +45 3333 5115 andris.strazds@nordea.com, tel. +371 67 096 096 Lithuania: Finland: Zygimantas Mauricas, Analyst Roger Wessman, Chief Economist Finland zygimantas.mauricas@nordea.com, +370 5 2657 198 roger.wessman@nordea.com, tel. +358 9 165 59930 Pasi Sorjonen, Senior Analyst Russia: pasi.sorjonen@nordea.com, tel. +358 9 1655 9942 Dmitry A. Savchenko, Analyst dmitry.savchenko@nordea.ru, +7 495 777 34 77 4194 Annika Lindblad, Analyst annika.lindblad@nordea.com, tel. +358 9 1655 9940 Dmitry S. Fedenkov, Analyst dmitry.fedenkov@nordea.ru, +7 495 777 34 77 3368 Norway: Poland: Steinar Juel, Chief Economist Norway Piotr Bujak, Chief Economist Poland steinar.juel@nordea.com, tel. +47 2248 6130 piotr.bujak@nordea.com, +48 22 521 36 51 Erik Bruce, Chief Analyst erik.bruce@nordea.com, tel. +47 2248 4449 Thina M. Saltvedt, Senior Analyst thina.margrethe.saltvedt@nordea.com, tel. +47 2248 7993 Katrine Godding Boye, Senior Analyst katrine.godding.boye@nordea.com, tel. +47 2248 7977 Bjørnar Tonhaugen, Senior Analyst bjornar.tonhaugen@nordea.com, tel. +47 2248 795937 EKONOMISKA UTSIKTER │SEPTEMBER 2012 NORDEA MARKETS
    • ■ Economic Research NordeaNordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank AB (publ), Nordea Bank Finland Plc and Nordea Bank Danmark A/S.The information provided herein is intended for background information only and for the sole use of the intended recipient. The views and other information provided herein are the cur-rent views of Nordea Markets as of the date of this document and are subject to change without notice. This notice is not an exhaustive description of the described product or the risksrelated to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient.The information provided herein is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or saleof any financial instrument. The information contained herein has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient.Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of fu-ture results.Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction.This document may not be reproduced, distributed or published for any purpose withoutthe prior written consent from Nordea Markets.Nordea, Markets DivisionNordea Bank Norge ASA Nordea AB (publ) Nordea Bank Finland Plc Nordea Bank Danmark A/S17 Middelthuns gt. 10 Hamngatan Aleksis Kiven katu 9, Helsinki 3 StrandgadePO Box 1166 Sentrum SE-105 71 Stockholm FIN-00020 Nordea PO Box 850N-0107 Oslo +46 8 614 7000 +358 9 1651 DK-0900 Copenhagen C+47 2248 5000 +45 3333 3333