Ekonomiska Utsikter, Nordea Bank, mars 2013
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Ekonomiska Utsikter, Nordea Bank, mars 2013 Document Transcript

  • 1. ■ Innehåll3 EKONOMISKA UTSIKTER │MARS 2013 NORDEA MARKETSLångsam vändningÖVERSIKT 04LÅNGSAM VÄNDNINGSVERIGE 08HUSHÅLLEN VÄDRAR MORGONLUFTUSA 16READY FOR LIFT-OFFEURO AREA 18SLOW RECOVERY, AND WE STRESS BOTH WORDSRUSSIA 26LOOMING DILEMMACHINA 31ADAPTING TO A NEW NORMALOIL AND COMMODITIES 35OIL PRICES CREEP HIGHEREKONOMISKAUTSIKTERM A R S 2 0 1 3
  • 2. ■ Innehåll4 EKONOMISKA UTSIKTER │MARS 2013 NORDEA MARKETSData overviewNyckeltal.................................6Räntor och valutor ...............7Besök oss på:www.nordeamarkets.comRedaktörAnnika WinsthChefekonomannika.winsth@nordea.comTel +46 8 614 8608Gått till tryck14 Mars 2013SVERIGEHushållen vädrar morgonluft......................................................................... 8NORWAYJust a growth pause ....................................................................................10DENMARKWaiting for growth .......................................................................................12FINLANDA pick-up in growth still hanging on exports.................................................14NordenUSAReady for lift-off...........................................................................................16EURO AREASlow recovery, and we stress both words.....................................................18GERMANYGreat expectations.......................................................................................20FRANCENo easy way out of the gloom ......................................................................21UKUncertainties ...............................................................................................22JAPANSayonara deflation, konnichiwa growth ........................................................23Större industriländerPOLANDThe worst is over .........................................................................................24RUSSIALooming dilemma........................................................................................26ESTONIARecovery proceeding, deleveraging completed.............................................28LATVIAOn track to join the Euro zone in 2014 ..........................................................29LITHUANIATime for internal revaluation ........................................................................30CHINAAdapting to a new normal ............................................................................31INDIAThe good, the bad and the ugly ....................................................................33BRAZILMission: hold inflation .................................................................................34Övriga länderOILOil prices creep higher.................................................................................35METALSSubdued price recovery as supply catches up with demand..........................36RåvarorReuters EcoWin och officiellnationell statistik om inget annatanges.Källor:ÖVERSIKTLångsam vändning ....................................................................................... 4
  • 3. ■ Översikt5 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSLångsam vändning Global ökad riskvilja Återhämtning men risker för bakslag Svensk ekonomi på väg åt rätt hållDe globala utmaningarna är fortsatt stora, men riskviljanpå de finansiella marknaderna har ökat påtagligt. Räntormed längre löptider har stigit och börsindex runt om ivärlden har ökat kraftigt sedan i somras. Detta trotsstrukturella, konjunkturella och politiska problem påmånga håll i världen. Den spirande optimismen handlardock inte om att investerare på finansmarknaderna blåserfaran över, utan snarare om att gå från att inte ta risk allstill att öppna dörren på glänt. När många aktörer väljeratt agera samtidigt får det stora effekter på såväl ränte-som aktiemarknader.Finns det då fog för ökad riskvilja? Ja, det gör det. Deneuropeiska centralbanken, ECB, har tydligt klargjort attman är redo att vidta kraftfulla åtgärder för att hållaeuroområdet intakt. USA har hanterat politiskautmaningar som skuldtak och budgetstup, om än barahjälpligt. Dessutom fortsätter Kina att stimuleraekonomin. Tydligare tecken på konjunkturåterhämtning,inte minst från USA bidrar också. Under ytan bubblardock oroshärdar och mindre bakslag kan mycket välinträffa. Den makroekonomiska utvecklingen ärfortfarande dämpad och konjunkturellt är skillnadernaländer emellan stora. Mycket tyder ändå på attåterhämtningen i delar av världsekonomin tagit fart. Denordiska länderna kommer gradvis tillbaka och svenskekonomi har det värsta bakom sig. Den globala tillväxtenväntas öka med 3,3 resp. 4,0 procent i år och nästa år.BNP, procentuell förändring årstakt2011 2012 2013E 2014EVärlden 3.9 3.0 3.3 4.0USA 1.8 2.2 1.9 2.8Euroområdet 1.5 -0.5 -0.4 1.4Japan -0.5 2.0 1.4 1.1Kina 9.3 7.8 8.1 8.5Europa – tudelatAtt ECB tagit en mer aktiv roll har gett politiska ledareandrum. Politisk stabilitet och fortsatt strukturella refor-mer krävs för att upprätthålla förtroendet. Närmare 20miljoner arbetslösa inom euroområdet är en stor utma-ning som kan öka den sociala oron. Utgången av itali-enska valet är också en rysare. Risken att turbulensen iItalien ska kasta in hela euroområdet i en ny djup kris fåremellertid anses vara liten, även om det är klart negativtför förtroende och riskaptit. Det tyska valet i septemberkan också skapa osäkerhet och bakslag. FörbundskanslerAngela Merkel vill varken ha oro i Italien eller protesterför en alltför snabbt fördjupning av samarbetet på agen-dan. Den fortsatta integrationen av eurosamarbetet gårdärmed sannolikt något långsammare framåt i år.Europa står för de största utmaningarna både på kort ochpå lång sikt. Förra året avslutades svagt och hela områdetbedöms vara i recession innevarande år. Återhämtningentar långsamt fart mot slutet av året och under nästa årväntas tillväxten bli 1,4 procent. Tyskland gynnas avkonkurrenskraftig industri, historiskt hög sysselsättningoch fortsatt mycket expansiv penningpolitik. En svageuro och global återhämtning är också centralt för en ex-portnation som Tyskland. BNP väntas öka med 0,7 pro-cent i år. Frankrike å andra sidan brottas med många ochstora problem. Finansiella obalanser, svag konkurrens-kraft och beroende av närliggande länder som Italien ochSpanien hämmar tillväxten. Prognosen är nolltillväxt i åroch det går inte att utesluta kvartal med fallande BNP. Iflera andra länder inom euroområdet, till exempel Spa-nien, sätter behovet av stram finanspolitik och hög ar-betslöshet käppar i hjulen för återhämtning.Den underliggande inflationen är låg och bedöms liggaunder ECB:s mål länge än. Det öppnar för fortsatt expan-siv penningpolitik under prognosperioden både vad gäl-ler ränta och likviditet. Vårt huvudscenario är dock attECB har sänkt klart, och att en första räntehöjning kom-mer i slutet av 2014. Styrräntan kan möjligen sänkas yt-terligare om konjunkturen utvecklas sämre eller omeuron stärks mer än förväntat.Osäker återhämtning i StorbritannienStorbritannien kommer tillbaka, men återhämtningen gårmycket långsamt. Investerare är avvaktande då osäker-heter såsom nedgradering av kreditbetyg, EU-omröstingoch penningpolitik spökar. Arbetsmarknaden ger dockstyrkebesked och en expansiv penningpolitik, vilket nyacentralbankschefen flaggat för, bidrar till en mer tydligåterhämtning mot slutet av året. Pundet förblir svagt inärtid, men stärks mot euron på lite sikt.USA - återhämtning med riskerInkommande statistik fortsätter att spreta, men den ame-rikanska ekonomin visar trots det allt tydligare tecken pååterhämtning. En tillväxt runt 2 procent 2013 får ansesvara bra med tanke på att finanspolitiken är mycketåtstramande. Utan åtstramningar skulle tillväxten kunnavara nära 4 procent enligt vår bedömning. I närtid väntasdock tillväxten bromsa upp på grund av den strama fi-nanspolitiken, samt av stigande bensinpriser. På sikt vän-tas dock minskad politisk osäkerhet bidra till ökad inve-steringsvilja. Hushållen står allt starkare då arbetsmark-naden förbättras, mycket av skuldavskrivningen är avkla-rad och räntor förblir låga. Stigande bostadspriser och ettökat behov av byggande är också positivt för tillväxten.Den amerikanska centralbanken, Fed, flaggade i decem-ber för att inflationstakten kan ligga något över måletframöver. Det gör, trots stigande inflation, att det dröjertill inledningen av 2015 innan de inleder räntehöj-
  • 4. ■ Översikt6 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSningscykeln. Låga räntor stimulerar därmed tillväxtenlänge än. År 2014 stiger BNP med närmare 3 procent.Dollarn stärks mot euron under prognosperioden och lig-ger på 1,20 i slutet av prognosperioden. Det är någotmindre än tidigare förväntat då Fed nu bedöms höja rän-tan senare än ECB.Kina fortsatt ekonomisk motorEkonomin växer i god takt, delvis tack vare stimulanser.Nytt ledarskap i Kina med fortsatt fokus på att minskainvesteringarnas andel av BNP gör dock att finanspoliti-ken blir något mindre expansiv under andra halvåret.Under nästa år bidrar hushållen, och inte minst denökande medelklassen, till att tillväxten når över golvet på7,5 procent. En överhettad fastighetsmarknad och väx-ande kreditgivning utanför banksektorn får fortsatt ansesutgöra de största riskerna för bakslag.Japan med nya penningpolitiska ambitionerNya centralbanksledningen har öppnat för en mycket ag-gressiv penningpolitik i syfte att få upp inflationen. Ye-nen har försvagats med 20 procent mot dollarn och bör-sen har stigit kraftigt. Det gör att även tillväxten väntasöka snabbare. De strukturella problemen är emellertidfortsatt stora och går inte att lösa enbart med en expansivpolitik. BNP ökar med knappt 1,5 procent i år, vilket ärlägre än premiärministerns prognos på 2 procent, ochmed drygt 1 procent nästa år.BNP, procentuell förändring årstakt2011 2012 2013E 2014ESverige 3.7 0.8 1.3 2.6Norge 2.5 3.5 2.6 2.5Danmark 1.1 -0.6 0.5 1.5Finland 2.8 -0.2 0.5 2.2Danmark fortsatt svagtTillväxten blev sämre än väntat under förra året och än sålänge syns få signaler om en snar återhämtning. Även2013 blir därmed ett svagt år. Den globala avmattningenslår mot exportsektorn i närtid. Samtidigt är hushållenavvaktande. Reallönerna utvecklas långsamt, husmark-naden är fortsatt ett orosmoment och kreditgivningen ärstram. Dansk ekonomi har dock genomgått ett antalstrukturförändringar de senaste åren och på sikt bör detskapa bättre förutsättningar för ökad konkurrenskraft ochdärmed tillväxt. En svagare handelsviktad dansk kronaframöver bidrar också till återhämtning.Finsk ekonomi - ingen vändning i närtidDen ekonomiska utvecklingen har varit svagare än för-väntat och ser ut att bli dämpad även framöver. Inte hel-ler i Finland finns tydliga inhemska drivkrafter i närtid.Ekonomin är i första hand beroende av en bättre globalefterfrågan och stigande export. Investeringarna fallertillbaka något under innevarande år på grund av svag or-deringång och låga bygginvesteringar. Hushållens köp-kraft dämpas av svag arbetsmarknad, moderata löneök-ningar och höjd moms. Sparandet är också lågt, vilket yt-terligare bidrar till en dämpad konsumtion.Norsk ekonomi i en kort pausEfter en enastående utveckling syns några första svag-hetstecken i norsk ekonomi. Den privata konsumtionendämpades och arbetslösheten steg något i slutet av förraåret. Det är dock tillfälligt. Löneökningarna är fortsattgoda och inflationen låg. Hushållens köpkraft är därmedfortsatt stark samtidigt som sparandet är högt. Oljesek-torn växer långsammare, men investeringarna ökar frånen hög nivå. Den inhemska ekonomin växer därmed påbred front, utan överhettningstendenser. Det gör att Nor-ges bank kan avvakta med att höja räntan till nästa år.Det i sin tur dämpar apprecieringstrycket på en redanstark norsk krona.Oljepriset förblir högt under prognosperioden då mark-naden är stram. Utbudet ökar under prognosperioden,men det gör också efterfrågan i takt med en starkare glo-bal tillväxt. Oroshärdarna är också många bland produce-rande länder. Det kan komma att påverka priserna. I hu-vudscenariot ligger oljepriset kvar på 112 dollar per fat2013, för att därefter stiga mot 116 i slutet av 2014. Me-tallpriserna bottnade i somras och stiger måttligt framö-ver i takt med hög efterfrågan, inte minst från Kina.Sverige – hushållen en allt viktigare drivkraftÅr 2012 avslutades svagt och innevarande år inleds mednolltillväxt. Den globala avmattningen sätter tydliga av-tryck i exportsektorn och inom industrin. Det dröjer tillsslutet av året innan exporten bidrar mer tydligt till åter-hämtningen. Ett lågt kapacitetsutnyttjande inom indu-strin, få byggstarter i slutet av 2012 och att ökningstaktenav stora projekt inom såväl gruvnäring som infrastrukturstannar av bidrar till att investeringarna faller i år.Hushållen står däremot starka. Inkomsterna har ökat igod takt de senaste åren och väntas fortsätta göra detäven under prognosperioden. Samtidigt har hushållensförmögenhet gynnats av en stark börsutveckling och avstigande huspriser. Hushållens sparande är det högsta påtjugo år! Detta tillsammans med ökad tillförsikt införframtiden gör att hushållen förväntas öka sin konsumtionnågot mer än det historiska snittet.Arbetsmarknaden påverkas dock med viss eftersläpningoch arbetslösheten fortsätter att stiga något under inneva-rande år. Måttliga löneökningar och en stark krona bidrartill att den underliggande inflationen förblir låg och lig-ger kvar långt under Riksbankens mål. Trots detta sänkerinte Riksbanken räntan ytterligare, då den lägger störrevikt vid globala ljusglimtar och skuldsättningen hos hus-hållen. Att Riksbanken sänkt klart bidrar till fortsattkronförstärkning. En stark krona i en låginflationsmiljökan bli ett dilemma för Riksbanken. Det handelsvägdakronindexet, KIX, är dock inte lika starkt då dollarnstärks mot många valutor inklusive kronan.Annika Winsthannika.winsth@nordea.com +46 8 614 8608
  • 5. ■ Översikt7 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSGrowth, % Inflation, %2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014EWorld1) 4.7 3.9 3.0 3.3 4.0 World1) 2.9 4.2 3.0 2.9 2.9USA 2.4 1.8 2.2 1.9 2.8 USA 1.6 3.1 2.1 1.6 2.4Euro area 2.0 1.5 -0.5 -0.4 1.4 Euro area 1.6 2.7 2.5 1.6 1.6China 10.4 9.3 7.8 8.1 8.5 China 3.3 5.4 2.6 4.0 4.2Japan 4.7 -0.5 2.0 1.4 1.1 Japan -0.7 -0.3 0.0 0.4 0.8Denmark 1.6 1.1 -0.6 0.5 1.5 Denmark 2.3 2.8 2.4 1.4 1.7Norw ay 1.7 2.5 3.5 2.6 2.5 Norw ay 2.5 1.2 0.8 1.6 1.7Sw eden 6.6 3.7 0.8 1.3 2.6 Sw eden 1.2 3.0 0.9 0.2 1.5UK 1.8 0.9 0.2 0.6 1.5 UK 3.3 4.5 2.8 2.2 2.0Sw itzerland 3.0 1.9 0.8 1.4 1.8 Sw itzerland 0.7 0.2 -0.5 0.5 1.0Germany 4.0 3.1 0.9 0.7 2.1 Germany 1.2 2.5 2.1 1.5 1.7France 1.6 1.7 0.0 0.0 1.2 France 1.7 2.3 2.2 1.6 1.7Italy 1.7 0.5 -2.4 -1.2 0.8 Italy 1.6 2.9 3.3 2.0 1.7Spain -0.3 0.4 -1.4 -1.5 0.9 Spain 2.0 3.1 2.4 1.8 1.2Finland 3.3 2.8 -0.2 0.5 2.2 Finland 1.2 3.4 2.8 2.0 2.5Estonia 3.3 8.3 3.2 3.2 3.8 Estonia 3.0 5.0 3.9 3.5 3.3Poland 3.9 4.3 2.0 1.8 2.8 Poland 2.6 4.3 3.7 1.6 2.5Russia 4.5 4.3 3.4 3.5 3.6 Russia 8.8 6.1 6.6 6.4 5.9Latvia -0.9 5.5 5.6 3.7 4.4 Latvia -1.1 4.4 2.3 1.6 2.7Lithuania 1.5 5.9 3.6 4.0 4.2 Lithuania 3.8 3.4 2.8 3.0 3.4India 9.8 7.3 5.1 5.9 6.6 India 9.6 9.5 7.5 6.8 6.7Brazil 7.6 2.7 1.5 3.5 4.2 Brazil 5.0 6.6 5.2 5.6 5.8Public finances, % of GDP Current account, % of GDP2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014EUSA -9.0 -8.7 -7.0 -5.1 -3.6 USA -3.0 -3.1 -3.0 -3.2 -3.5Euro area -6.2 -4.1 -3.6 -2.8 -2.7 Euro area 0.3 0.2 1.5 2.2 2.3China -1.7 -1.1 -1.6 -2.3 -1.9 China 4.0 2.8 2.3 2.2 1.5Japan -9.5 -10.0 -10.2 -9.8 -9.3 Japan 3.7 2.0 1.6 2.0 2.1Denmark -2.7 -2.0 -3.9 -1.6 -1.6 Denmark 5.9 5.6 5.3 4.6 4.2Norw ay 11.1 13.4 13.6 13.3 13.0 Norw ay 11.9 12.8 14.2 13.8 13.5Sw eden -0.1 0.1 -0.7 -1.2 -1.5 Sw eden 6.8 7.0 6.2 6.4 6.7UK -10.2 -7.8 -6.5 -6.5 -5.0 UK -2.5 -1.3 -3.7 -3.0 -1.8Sw itzerland 0.2 0.4 0.5 0.5 0.8 Sw itzerland 14.4 14.2 10.1 10.0 9.8Germany -4.1 -0.8 0.2 -0.5 0.2 Germany 6.1 5.6 6.3 6.0 5.6France -7.1 -5.2 -4.6 -3.8 -4.1 France -2.0 -2.6 -1.9 -1.6 -1.8Italy -4.3 -3.8 -2.8 -2.0 -1.9 Italy -3.5 -3.3 -0.7 0.6 0.8Spain -9.7 -9.4 -10.2 -6.7 -7.2 Spain -4.4 -3.7 -1.9 1.0 2.5Finland -2.5 -0.8 -1.9 -1.9 -1.5 Finland 1.6 -1.3 -1.6 -1.2 -1.0Estonia 0.2 1.1 -0.2 -0.3 -0.1 Estonia 3.2 2.1 -1.5 -2.1 -2.2Poland -7.8 -5.0 -3.5 -3.8 -3.2 Poland -5.1 -4.9 -3.5 -2.5 -3.1Russia -3.9 0.8 -0.2 0.3 0.2 Russia 5.0 5.4 4.3 3.0 2.5Latvia -8.2 -3.5 -1.5 -1.2 -1.0 Latvia 3.0 -2.2 -1.7 -2.3 -3.0Lithuania -7.2 -5.5 -3.0 -2.8 -3.0 Lithuania 0.1 -3.7 -0.9 -2.5 -3.0India -4.0 -7.2 -5.8 -5.3 -5.5 India -3.2 -3.4 -4.0 -4.5 -5.0Brazil -2.7 -2.6 -2.1 -2.1 -2.0 Brazil -2.2 -2.1 -2.6 -2.7 -2.61) Weighted average of countries in this table. Accounts for 72.7%of world GDP. Weights calculated using PPP adjusted GDP levels for 2011according to the IM Fs World Economic Outlook
  • 6. ■ Översikt8 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSMonetary policy rates Monetary policy rate spreads vs Euro area18.3.13 3M 31.12.13 30.6.14 31.12.14 18.3.13 3M 31.12.13 30.6.14 31.12.14US 0.25 0.25 0.25 0.25 0.25 US -0.50 -0.50 -0.50 -0.50 -0.75Japan 0.10 0.10 0.10 0.10 0.10 Japan1-0.15 -0.15 -0.15 -0.15 -0.15Euro area 0.75 0.75 0.75 0.75 1.00 Euro area - - - - -Denmark 0.30 0.30 0.50 0.60 1.00 Denmark -0.45 -0.45 -0.25 -0.15 0.00Sw eden 1.00 1.00 1.00 1.25 1.50 Sw eden 0.25 0.25 0.25 0.50 0.50Norw ay 1.50 1.50 1.50 1.75 2.00 Norw ay 0.75 0.75 0.75 1.00 1.00UK 0.50 0.50 0.50 0.50 0.50 UK -0.25 -0.25 -0.25 -0.25 -0.50Sw itzerland 0.00 0.00 0.00 0.00 0.00 Sw itzerland -0.75 -0.75 -0.75 -0.75 -1.00Poland 3.25 3.25 3.25 3.25 4.50 Poland 2.50 2.50 2.50 2.50 3.50Russia 8.25 8.25 8.00 8.00 8.00 Russia 7.50 7.50 7.25 7.25 7.00China 6.00 6.00 6.25 6.50 6.50 China 5.25 5.25 5.50 5.75 5.50India 7.75 7.75 8.00 8.00 8.00 India 7.00 7.00 7.25 7.25 7.00Brazil 7.25 7.50 8.00 8.25 10.50 Brazil 6.50 6.75 7.25 7.50 9.501) Against the US3-month rates 3-month spreads vs Euro area18.3.13 3M 31.12.13 30.6.14 31.12.14 18.3.13 3M 31.12.13 30.6.14 31.12.14US 0.28 0.30 0.35 0.35 0.60 US 0.08 0.10 0.05 -0.05 -0.15Euro area 0.20 0.20 0.30 0.40 0.75 Euro area - - - - -Denmark 0.28 0.30 0.50 0.65 1.00 Denmark 0.08 0.10 0.20 0.25 0.25Sw eden 1.25 1.25 1.25 1.75 1.85 Sw eden 1.05 1.05 0.95 1.35 1.10Norw ay 1.84 1.80 1.78 2.03 2.27 Norw ay 1.64 1.60 1.48 1.63 1.52UK 0.51 0.60 0.60 0.60 0.65 UK 0.31 0.40 0.30 0.20 -0.10Poland 3.46 3.50 3.50 3.50 4.70 Poland 3.26 3.30 3.20 3.10 3.95Russia 7.14 7.20 7.00 7.00 7.00 Russia 6.94 7.00 6.70 6.60 6.25Latvia 0.47 0.45 0.30 0.40 0.75 Latvia 0.27 0.25 0.00 0.00 0.00Lithuania 0.47 0.50 0.50 0.50 0.75 Lithuania 0.27 0.30 0.20 0.10 0.0010-year government benchmark yields 10-year yield spreads vs Euro area18.3.13 3M 31.12.13 30.6.14 31.12.14 18.3.13 3M 31.12.13 30.6.14 31.12.14US 2.03 2.20 2.65 2.80 3.25 US 0.54 0.65 0.65 0.55 0.65Euro area 1.49 1.55 2.00 2.25 2.60 Euro area - - - - -Denmark 1.66 1.90 2.10 2.35 2.70 Denmark 0.17 0.35 0.10 0.10 0.10Sw eden 1.96 2.05 2.50 2.85 3.25 Sw eden 0.47 0.50 0.50 0.60 0.65Norw ay 2.31 2.32 2.85 3.25 3.42 Norw ay 0.82 0.77 0.85 1.00 0.82UK 1.98 2.05 2.40 2.55 2.85 UK 0.49 0.50 0.40 0.30 0.25Poland 3.92 3.90 4.00 4.00 4.50 Poland 2.43 2.35 2.00 1.75 1.90Exchange rates vs SEK Exchange rates vs EUR and USD18.3.13 3M 31.12.13 30.6.14 31.12.14 18.3.13 3M 31.12.13 30.6.14 31.12.14EUR/SEK 8.342 8.350 8.350 8.100 8.100 EUR/USD 1.29 1.37 1.25 1.20 1.20USD/SEK 6.448 6.095 6.680 6.750 6.750 EUR/JPY1) 123 130 125 126 132JPY/SEK16.788 6.416 6.680 6.429 6.136 EUR/GBP 0.86 0.89 0.87 0.83 0.80DKK/SEK 1.119 1.120 1.120 1.087 1.087 EUR/CHF 1.22 1.26 1.25 1.25 1.30NOK/SEK 1.111 1.106 1.113 1.080 1.052 EUR/SEK 8.34 8.35 8.35 8.10 8.10GBP/SEK 9.75 9.38 9.60 9.76 10.13 EUR/NOK 7.51 7.55 7.50 7.50 7.70CHF/SEK 6.826 6.627 6.680 6.480 6.231 EUR/PLN 4.15 4.05 3.95 3.90 3.85PLN/SEK 2.011 2.062 2.114 2.077 2.104 USD/JPY 95.0 95.0 100.0 105.0 110.0GBP/USD 1.51 1.54 1.44 1.45 1.50RUB/SEK 0.209 0.197 0.223 0.229 0.233 USD/CHF 0.94 0.92 1.00 1.04 1.08USD/SEK 6.45 6.09 6.68 6.75 6.75LVL/SEK 11.90 11.93 11.93 11.53 11.53 USD/NOK 5.80 5.51 6.00 6.25 6.42LTL/SEK 2.416 2.418 2.418 2.346 2.346 USD/PLN 3.21 2.96 3.16 3.25 3.21CNY/SEK 1.037 0.975 1.104 1.144 1.184 USD/CNY 6.22 6.25 6.05 5.90 5.701) Per 100 units USD/INR 54.1 54.0 53.5 52.0 50.0USD/BRL 1.99 1.92 1.87 1.85 1.75
  • 7. ■ Sverige9 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSHushållen vädrar morgonluft Gradvis starkare BNP-tillväxt Delad ekonomi med hushåll som främsta drivkraft Riksbanken har sänkt klart, höjer räntan nästa år Kronan stabil mot euron men försvagas mot dollarnLjusningTillväxten i den svenska ekonomin växlade ned under2012 för att stagnera helt i slutet av året. Avmattningengjorde avtryck på arbetsmarknaden. Arbetslösheten stegtill drygt 8 procent i slutet av förra året samtidigt som in-flationen låg klart under 2-procentsmålet.Utsikterna har dock ljusnat såväl för den inhemska eko-nomin som för den globala. Framför allt förefaller risker-na förknippade med skuldkrisen i euroområdet ha mins-kat även om den politiska situationen i Italien är oklar.Återhämtningen i USA står på fastare mark och tillväxteni Kina förbättras framöver, vilket även svenska exportö-rer kommer att dra nytta av.På hemmaplan har hushållen det väl förspänt och kon-sumtionen bedöms vara den främsta tillväxtmotorn. Inve-steringarna dämpas dock i år och växer måttligt 2014.Arbetsmarknaden försämras ytterligare något på kort siktoch den låga inflationen består. Riksbanken framhållerdock att penningpolitiken redan är expansiv och fokuse-rar på de förbättringar som nu skymtar. Ytterligare ränte-sänkningar är därför inte troliga. Nästa år höjs reporäntandå en förbättrad inhemsk ekonomi får Riksbanken attvilja lätta på gasen.Dämpad omvärldTrots flera ljusglimtar är tillväxten i vår omvärld fortfa-rande dämpad. Det återspeglas i den svenska exportensom har utvecklats svagt till och med inledningen av2013. Även indikatorerna tecknar alltjämt en dyster bildav läget. De har förvisso förbättrats den senaste tidenmen pekar än så länge bara på en stabilisering av orde-ringången efter den långa nedgången. Tillväxten hos våraviktigaste handelspartners blir dämpad även i år. Expor-ten ökar därför endast gradvis under 2013 och tillväxtenför helåret blir låg. Inte förrän 2014 stiger exporten merpåtagligt.Hushållen ångar på medan investeringarna dämpasStigande löner och låg inflation har stärkt hushållensköpkraft. Under de två senaste åren har de reala inkoms-terna ökat med sammanlagt 6 procent. Köpkraften för-bättras även kommande år, om än något långsammare dålöneökningstakten dämpas. Dessutom har hushållensförmögenhetsställning förbättrats i och med börsåter-hämtningen och stigande huspriser. Hushållens sparandeär högt, vilket talar för att det finns utrymme för ökadkonsumtion. I slutet av förra året var till exempel hushål-lens egna finansiella sparande det högsta på 16 år. Denhöga arbetslösheten hämmar köplusten men med mins-kad osäkerhet om såväl den egna som om Sveriges eko-nomi, i kombination med de övriga gynnsamma förut-sättningarna, bedöms hushållens konsumtion öka i godtakt framöver.Effekterna av hushållens ökade tillförsikt syns också ibostadsbyggandet som har planat ut efter det senasteSverige: Makroekonomiska nyckeltal (årlig tillväxt i procent om inget annat anges)2009 (mdkr) 2010 2011 2012 2013E 2014EPrivat konsumtion 1,533 4.0 2.1 1.5 2.2 2.4Offentlig konsumtion 860 2.1 1.1 0.8 1.1 1.5Fasta bruttoinvesteringar 559 7.2 6.4 3.4 -2.0 3.0- industri 74 2.7 11.4 7.5 -4.1 3.0- bostadsinvesteringar 92 15.7 14.7 -9.1 -5.3 5.1Lagerinvesteringar* -46 2.2 0.5 -1.1 0.0 0.1Export 1,489 11.4 7.1 0.7 0.9 4.7Import 1,288 12.0 6.3 -0.1 0.4 4.5BNP 3,106 6.6 3.7 0.8 1.3 2.6BNP, kalenderkorrigerad 6.6 3.7 1.2 1.3 2.7Nominell BNP (mdr SEK) 3,106 3,338 3,500 3,555 3,665 3,816Arbetslöshet (% av arbetskraften) 8.6 7.8 8.0 8.3 8.2Sysselsättning 0.5 2.3 0.6 0.3 0.6Konsumentpriser (årsgenomsnitt KPI) 1.2 3.0 0.9 0.2 1.5Underliggande inflation (årsgenomsnitt KPIF) 2.0 1.4 1.0 1.0 1.4Timlöner (nationalräkenskaper) 1.1 2.7 3.3 2.8 2.8Bytesbalans (mdr SEK) 225 243 219 235 255- % av BNP 6.8 7.0 6.2 6.4 6.7Handelsbalans (% av BNP) 2.6 2.7 2.5 2.7 2.8Offentligt finansiellt sparande (mdr SEK) -2 5 -25 -44 -57- % av BNP -0.1 0.1 -0.7 -1.2 -1.5Offentlig bruttoskuld, % av BNP 39.3 38.3 38.4 42.3 42.3* Bidrag till BNP-tillväxt (% punkter)
  • 8. ■ Sverige10 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSårets nedgång. Få byggstarter i slutet av förra året gördock att bostadsinvesteringarna minskar i år. Inom indu-strin är behovet av att investera lågt då kapacitetsutnytt-jandet sjönk förra året. Ifjol hölls investeringstillväxtendessutom uppe av stora projekt inom gruvnäringen, vil-ket inte upprepas i år. Tjänstesektorernas investeringarväntas falla i år, även om en förhållandevis stark inhemskefterfrågan bidrar till att nedgången mildras. Vi räknardärför med att de totala investeringarna minskar i år. Un-der 2014 sker en återhämtning som successivt vinner istyrka.Riksbankens huvudbryÄven om BNP-tillväxten förbättras framöver dröjer detinnan arbetslösheten faller tillbaka mer påtagligt. Samti-digt är inflationen fortsatt låg. Lönerna ökar långsam-mare än under de senaste åren och den fortsatta kronför-stärkningen bidrar till en ihållande nedgång av importpri-serna. Dessutom sjunker energipriserna på kort sikt sam-tidigt som prisökningarna på livsmedel dämpas tack varefallande priser på världsmarknaden. Med få inflationsim-pulser kommer den underliggande inflationen (KPIF),som har varit 1,2 procent i genomsnitt under de två sen-aste åren, att sjunka ytterligare något i år. Nästa år stigerden till som högst 1,5 procent när effekterna av kronför-stärkningen ebbar ut och energipriserna åter stiger något.För Riksbankens del står ett lågt resursutnyttjande och envaraktigt låg inflation mot en inhemsk ekonomi där vik-tiga delar utvecklas väl. Vid sidan av en god konsumt-ionsutveckling torde huspriserna och kredittillväxtenstiga något framöver. Det kan utgöra ett orosmoment förRiksbanken som har ögonen på hushållens skuldsättning.I dessa avvägningar bedöms Riksbanken lägga störst viktvid utvecklingen av den inhemska ekonomin och kom-mer därför inte att sänka reporäntan ytterligare från da-gens nivå på 1,0 procent. I mitten på nästa år höjer Riks-banken räntan då tecken på ett stigande resursutnyttjandekan skönjas.Stark ekonomi ger stark kronaKronan är i dagsläget på sin starkaste nivå på 20 år räk-nat i handelsviktade och nominella termer. Förstärkning-en är ett resultat av den relativt starka svenska ekonominmed positiv tillväxt och stabila offentliga finanser. Sam-tidigt har bland annat orosmolnen över euroområdetmörknat något igen. Det har resulterat i en ökad rän-teskillnad mot övriga Europa och i en starkare växelkursmot framför allt euron. En fortsatt förhållandevis god ut-veckling av svensk ekonomi talar för att kronans styrkamot euron består. Däremot bedöms kronan försvagas nå-got mot dollarn i takt med att den amerikanska ekonominåterhämtar sig.Torbjörn Isakssontorbjorn.isaksson@nordea.com +46 8 614 8859Låg tillväxt på svenska exportmarknader i årHushållens sparande rekordhögtInflationen lågKronan vinner terräng
  • 9. ■ Norway11 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSJust a growth pause Sustained strong growth despite signs of weakness Low inflation and lower interest rates abroad contrib-ute to keeping Norwegian rates at low levels Gradually higher rates in 2014GDP growth in mainland Norway remained at healthylevels in 2012, in line with our December projection.However, the Q4 data reflected some signs of weakness.Surprisingly low consumption growth caused productionin the retail sector to decline. According to StatisticsNorway’s Labour Force Survey (LFS), employmentgrowth has come to a halt, while the labour supply con-tinues to increase, resulting in rising unemployment.There is, however, probably a fair amount of noise in thenumbers as there are no signs of an increase in the num-ber of registered unemployed at the job centres.We stick to our view that the economic outlook for thenext two years is largely good. Consumption growth willlikely pick up again, housing and oil investment will con-tinue to grow and public demand will increase moderate-ly. Exports of traditional goods will, however, remainweak, and as a result investment activity for instance inthe manufacturing sector will be subdued.While Norges Bank will keep its policy rate at low lev-els, the future trend in banks’ lending rates and overalllending appetite is more uncertain following the intro-duction of stricter capital requirements. Our forecast as-sumes a gradual increase in the capital requirements,with a limited effect on banks’ lending rates and overalllending appetite. The banks have already tightened theircredit standards, and lending margins rose sharply lastautumn. As a result, the new bank regulations shouldhave modest effect on economic growth. However, ifstricter capital requirements are imposed faster than weforecast, growth in Norway could turn out lower dueamong other things to a potential decline in house prices.In this scenario, Norges Bank may cut its policy rate fur-ther and keep it lower for a longer period than we cur-rently project.Consumption reboundsGoods consumption was surprisingly weak during the au-tumn. Meanwhile, consumption of services rose at ahealthy clip in Q3 and at a more moderate pace in Q4.But Norwegians’ spending abroad showed no signs ofweakness, rising nearly 10% in 2012 after having pickedup by more than 12% in both 2010 and 2011. No doubt,the past years’ increase in purchasing power has provideda boost to Norwegians’ travelling and spending abroad.Another factor likely contributing to this trend is thestrong NOK.We expect real wage growth to remain elevated also thisyear, based on sustained high wage growth and low infla-tion. The number of people in work will likely continueto rise, albeit at a slightly slower pace than in 2012. As aresult, households’ purchasing power will likely continueto show robust growth, which bodes well for consump-tion growth. However, since December we have slightlyrevised down our forecast for consumption growth inNorway. We see the savings ratio rising further to newpeaks.Norway: Macroeconomic indicators (% annual real changes unless otherwise noted)2009( bn) 2010 2011 2012 2013E 2014EPrivate consumption 1,028 3.8 2.5 2.9 3.0 3.0Government consumption 531 1.3 1.8 2.1 2.0 2.0Fixed investment 516 -8.0 7.6 8.1 6.0 3.0- gross investment, mainland 349 -4.5 8.5 3.9 5.3 2.6- gross investment, oil 144 -14.8 9.8 19.1 8.0 4.0Stockbuilding* 14 3.5 0.1 -0.1 0.0 0.0Exports 929 0.4 -1.8 2.2 0.4 1.2- crude oil and natural gas 416 -6.9 -6.2 0.9 0.0 0.0- other goods 277 3.4 0.0 2.6 0.0 2.5Imports 660 9.0 3.8 3.3 3.8 3.0GDP 2,357 0.5 1.2 3.2 2.0 2.0GDP, mainland 1,876 1.7 2.5 3.5 2.6 2.5Unemployment rate, % 3.6 3.3 3.2 3.3 3.3Consumer prices, % y/y 2.5 1.2 0.8 1.6 1.7Core inflation, % y/y 1.4 0.9 1.2 1.3 1.7Annual w ages, % y/y 3.6 4.2 4.0 4.1 4.2Current account (NOKbn) 303.2 351.0 414.0 427.7 437.8- % of GDP 11.9 12.8 14.2 13.8 13.5Trade balance, % of GDP 11.9 13.3 13.2 13.0 12.6General govt budget balance (NOKbn) 282.5 368.3 397.0 410.0 420.0- % of GDP 11.1 13.4 13.6 13.3 13.0* Contribution to GDP growth (% points)
  • 10. ■ Norway12 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSWeak exports, while oil services sector prospersWith weakness in some export markets and a high costlevel in Norway, some Norwegian exporters are having ahard time especially this year. This situation will notchange much over the next couple of years. But overallthis is to a large extent offset by the still good prospectsfor the oil services sector. Admittedly, growth in oil in-vestment will slow significantly this year and next yearcompared to last year, but oil investment will continue togrow from the current very high level.In mainland Norway we look for modest investmentgrowth in most sectors, while housing investment growthshould remain elevated. This combined with moderategrowth in public demand suggests fairly strong growth indomestic demand overall, which should be more thanenough to counter the effects of a weak trend in tradi-tional exports.Mainland production growth will be moderate, but stillstrong enough to ensure sustained employment growth,albeit at a lower level than in 2012. As we expect labourmigration to adapt to this scenario, unemployment shouldnot pick up further. The labour market will still be char-acterised by a shortage of certain skills, and this will con-tribute to keeping wage growth at around 4%. Still, infla-tion may rise somewhat as rents may increase further andthe pick-up in imported inflation gradually gains momen-tum with the fading effect of the past years’ NOK appre-ciation.Rising rates abroad will give higher rates in NorwayAgainst the backdrop of relatively modest growth, lowinflation and few signs of an overheating economy we donot expect Norges Bank to hike rates this year. Anotherreason is that signals of a rate hike will cause the NOK toappreciate sharply. But next year Norges Bank shouldstart cautiously hiking rates. By that time inflation shouldhave edged higher, and the growth outlook will still begood. And as interest rate expectations globally will like-ly rise next year, it will be possible for Norges Bank tohike rates without risking excessive NOK strengthening.Despite weakening since the beginning of the year theNOK remains strong. And this year markedly highergrowth in Norway than elsewhere and growing expecta-tions of rate hikes every time the NOK weakens willkeep the NOK at strong levels. Next year rising interestrate expectations abroad will leave room for a few ratehikes. If we are right about the first rate hikes by theECB, the Fed and the Swedish Riksbank having beensanctioned or being imminent by the end of the forecastperiod, the NOK may weaken somewhat by that time.Erik Bruceerik.bruce@nordea.com +47 2248 4449Katrine Godding Boyekatrine.boye@nordea.com +47 2248 7977Changed consumption patternWhat happens in the labour market?Sustained growth in oil investmentThe NOK remains strong
  • 11. ■ Denmark13 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSWaiting for growth Gradually rising growth over the forecast horizon Reforms strengthen economic foundation Labour market in a critical phase Cracks in exportsThe Danish economy is still showing very few signs ofgrowth. By all accounts 2012 was the weakest year sincethe major crisis in 2009. Moreover, given the significantsetback in the last three months of 2012, the Danisheconomy entered this year at a much lower level thanpreviously assumed. Coupled with weaker-than-expecteddemand in key export markets and continued stagnationin domestic spending, we have had to revise down ourexpectations for 2013. We now expect that the Danisheconomy will show only modest growth of 0.5% in 2013,rising to 1.5% next year. However, over the forecast pe-riod the activity level should gradually rise driven byboth higher domestic demand and higher exports.Economic foundation strengthened by reformsIn recent years a string of major economic reforms havebeen implemented for multiple purposes. On the onehand, the reforms have aimed at stimulating and under-pinning the economy here and now by increasing publicinvestment and cutting income taxes. On the other hand,the purpose has been to strengthen the long-term supplyside of the Danish economy, partly through labour mar-ket reforms, changing unemployment and social securitybenefit systems, and partly by lowering companies’ costlevels via indirect tax cuts and most recently a proposalto gradually cut corporate taxes.While the success of the short-term measures has beenhampered by reluctant consumers and low private in-vestment activity, we believe that the reforms have man-aged to bolster the fundamental structures of the Danisheconomy – thus making it better positioned to benefitfrom the economic upswing once the cycle improvesagain. In addition, economic fundamentals are under-pinned by the fact that the structural reforms are fully fi-nanced and therefore do not put further pressure on pub-lic finances.Renewed upturn in households’ purchasing powerConsumer spending is still subdued – under pressurefrom weak real wage growth, a very uncertain economicoutlook, tighter credit standards and a still fragile hous-ing market. But going forward there is reason to believethat household consumption will break out of the currentdeadlock. The increased optimism is first and foremostdue to the prospect of stronger purchasing power drivenby tax cuts and a gradual recovery of real wage growth.Whether or not the boost to households’ purchasingpower will actually manifest itself in rising consumptionhinges on the absence of a corresponding increase in thesavings ratio, though.Labour market in critical phaseThe Danish labour market is in the midst of a criticalphase. Over the past quarters unemployment trends havebeen much better than feared; the number of vacancies iscurrently at a 4-year high. But employment has continuedto decline, and the number of people in work is now low-er than at any other time since 2006. This differentiatedtrend is due to a sharp labour force contraction, as for ex-ample reflected in the labour market survey, whichshows an increase of 100,000 in the number of working-age people outside the labour market over the past fourDenmark: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (DKKbn) 2010 2011 2012 2013E 2014EPrivate consumption 822 1.7 -0.5 0.5 0.4 1.8Government consumption 496 0.4 -1.5 0.5 1.0 0.6Fixed investment 304 -2.4 2.8 1.2 2.3 2.6- government investment 32 8.9 4.2 10.6 -0.3 -2.0- residential investment 71 -0.6 14.6 -9.8 -0.5 6.5- business fixed investment 201 -4.9 -1.6 3.8 3.9 2.2Stockbuilding* -22 1.0 0.5 -0.5 0.0 0.0Exports 793 3.0 6.5 1.1 1.0 3.3Imports 728 3.2 5.6 2.7 1.5 3.6GDP 1.6 1.1 -0.6 0.5 1.5Nominal GDP (DKKbn) 1,665 1,761 1,792 1,817 1,851 1,914Unemployment rate, % 6.2 6.1 6.2 6.2 6.1Gross unemployment level, 000 persons 162.9 159.8 162.0 162.0 159.5Consumer prices, % y/y 2.3 2.8 2.4 1.4 1.7Hourly earnings, % y/y 2.3 1.8 1.6 1.5 1.9Nominal house prices, one-family, % y/y 2.8 -2.8 -3.4 0.9 1.9Current account (DKKbn) 103.6 101.2 95.5 85.0 80.0- % of GDP 5.9 5.6 5.3 4.6 4.2General govt. budget balance (DKKbn) -47.4 -34.9 -71.0 -30.0 -31.0- % of GDP -2.7 -2.0 -3.9 -1.6 -1.6Gross public debt, % of GDP 42.9 46.6 45.5 44.5 43.0* Contribution to GDP growth (% points)
  • 12. ■ Denmark14 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSyears. At the same time, the combination of a shrinkinglabour force and a large share of the in-work populationchanging occupational areas has led to signs of growingmismatch problems –ultimately lifting the structural un-employment level and possibly afflicting more lastingdamage to the Danish economy.Fragile housing market shows signs of stabilisingThe Danish housing market is still in a consolidationphase following the severe downturn five years ago. Thestabilisation is mainly taking place via prices, which havebeen largely unchanged over the past year after thedownward trend in 2011. But the number of home salesis still very low. Consequently, the estimated selling pe-riod – the number of months it will take to sell the num-ber of houses on the market based on the current turnoverrate – is still more than three times as high as before thecrisis. And as private residential construction is still at avery low level, the housing market has not yet reached astage where it can contribute to growth in the Danisheconomy.We expect prices to remain at the current level in theyears to come. But tensions lurk beneath the apparentlycalm surface. Firstly, we expect further geographical po-larisation, with the housing market improving in the larg-est cities both in terms of turnover and price trends, whileother areas will remain stuck. At the same time, the hous-ing market will during the forecast period be challengedby gradually increasing interest rates, which we expectwill push financing costs higher, for example as a conse-quence of the Danish central bank hiking its policy rateas part of a gradual monetary policy normalisation.Exports starting to crackIn H2 2012 Danish exports suffered the largest setbackon record since mid-2009. The slowdown is mainly dueto a sharp drop in goods exports to the Euro area. TheDanish economy will now really feel the impact of thesignificant growth slowdown that hit the Euro areathroughout 2012. Near term we expect Danish exports toremain under pressure due to weak demand in key exportmarkets. However, later this year these markets shouldsee gradually accelerating growth that will ensure a re-newed pick-up in exports. Slightly longer out we expectexports to be further lifted by improved competitivenesson the back of low wage growth, relatively strongproductivity gains, improved overall conditions and aweakening of the trade-weighted DKK.Helge J. Pedersenhelge.pedersen@nordea.com +45 33333126Jan Størup Nielsenjan.storup.nielsen@nordea.com +45 33333171Stagnation in the Danish economyLagging private business investmentIncreased scope for spending for householdsTemporary dent in exports
  • 13. ■ Finland15 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSFinland: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014EPrivate consumption 94 3.3 2.3 1.6 1.2 1.4Government consumption 43 -0.3 0.4 0.8 0.5 0.5Fixed investment 34 1.9 7.1 -2.9 -2.3 4.2Stockbuilding* -2 0.8 1.3 -1.7 0.3 0.0Exports 64 7.5 2.9 -1.4 0.4 5.6Imports 62 6.9 6.1 -3.7 -0.3 5.2GDP 3.3 2.8 -0.2 0.5 2.2Nominal GDP (EURbn) 172.3 178.8 189.5 194.5 199.5 207.2Unemployment rate, % 8.4 7.8 7.7 8.2 8.0Industrial production, % y/y 8.3 1.0 -1.8 1.5 3.5Consumer prices, % y/y 1.2 3.4 2.8 2.0 2.5Hourly w ages, % y/y 2.6 2.7 3.5 2.8 2.0Current account (EURbn) 2.9 -2.4 -3.0 -2.5 -2.2- % of GDP 1.6 -1.3 -1.6 -1.2 -1.0Trade balance (EURbn) 2.6 -1.2 0.3 1.0 1.4- % of GDP 1.4 -0.6 0.1 0.5 0.7General govt budget balance (EURbn) -4.5 -1.5 -3.7 -3.8 -3.0- % of GDP -2.5 -0.8 -1.9 -1.9 -1.5Gross public debt (EURbn) 87.0 92.8 103.1 109.3 114.9- % of GDP 48.6 49.0 53.0 54.8 55.4A pick-up in growth still hanging on exports Exports to recover modestly in 2013 Few domestic growth drivers Investment to decline, employment to weaken Slow growth in private consumptionNo support measures means slow growthThe short-term outlook of the Finnish economy is sub-dued despite the budding pick-up in the global economy.The conditions are weaker than expected this year, as to-tal production decreased clearly in late 2012. According-ly, we have decreased our growth forecast to 0.5% for2013 (from 1.0%) and to 2.2% for 2014 (from 2.7%).Due to modest economic growth, unemployment is ex-pected to rise to 8.2% on average in 2013.The downside risks of the economic trend are still morelikely to realise than the upside risks. The danger is thatgrowth will remain slow without measures supporting theeconomic activity. This means that this is not the time totighten policies and thereby dampen growth. In additionto the support measures, there is also a need for structuralreforms. Along the years, these have been proposed bymany work groups in their reports. Now it has become atime to get finished with the work groups and reports andto finally put the money where the mouth is and actuallystart to execute the proposals.Few domestic growth driversRight now, there are no obvious growth drivers in theFinnish economy. In our view, total demand, which is thesum of exports, consumption and investment – and thus akey indicator of economic activity – will hardly increaseat all in volume terms this year.We expect growth to pick up this year driven by exports.Imports will only increase moderately, which is above alla sign of weak domestic demand. Machinery, equipmentand construction investment will decrease this year forthe second year in a row. Private consumption will growmodestly, as weaker employment and tighter taxationwill limit the improvement of household purchasingpower.Exports to recover modestly in 2013Finnish goods exports contracted almost 10% in Q4 2012from the previous quarter. The plunge indicates weakdemand, but part of it is also related to the fact that therewere fewer workdays in December than normal due tomid-week holidays. It is likely that export volumes willrecover only partly in Q1 2013. However, we expect acontinued modest recovery of exports in Q2 and in H2 inparticular, as international demand gets stronger.Nevertheless, export volumes will only increase a little in2013 compared to last year. Faster export growth cannotbe expected before 2014.2012 saw again a trade surplus after one year of tradedeficit for the first time in two decades. The surplus willincrease in the forecast period, as goods exports willgrow faster than goods imports. The current account will,however, remain in deficit, weakened by deficits inservice trade, income transfers and factor returns.Less investment this yearThe investment outlook is subdued, and the proportion ofinvestment of the total production value will decrease.Machinery and equipment investment typically tracksexports and new manufacturing orders with a lag, and weestimate that they will not start to recover until late thisyear, if not later.* Contribution to GDP growth (% points)
  • 14. ■ Finland16 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSConstruction investment will also bottom out this yearbut will not start to grow until 2014.Growth in private consumption to slow downPrivate consumption grew less than usual in 2012 and thegrowth rate will keep decreasing this year. Theimprovement of household purchasing power is limitedby weaker employment, tightened income taxes and VATand a more moderate rise in the income level than lastyear. Another factor restricting consumption is thehousehold savings rate, which declined slightly belowzero already last year. This is why households may alsoconsider making larger acquisitions, such as a new car orhome, more carefully.Weaker employmentThe labour market has continued to hold up astonishinglywell. Due to slow economic growth, we expect the labourmarket to weaken moderately during the spring and thesummer. We estimate that the unemployment rate,excluding seasonal effects, will increase from 8% inJanuary to 8.4% by the end of the year before theeconomic pick-up we are anticipating starts to raise thedemand for labour.Decreased inflationThe rise in consumer prices slowed down more thanexpected in January. The VAT hike that entered intoforce at the beginning of the year is not necessarily yetreflected in the prices in full. It may be that companieshave not been able to transfer the tax hike to prices due toweak demand. On the other hand, the price rise will nodoubt be calmed down by the economic recession,weaker employment as well as levelled producer andwholesale price rise. As the government may decide toincrease certain commodity taxes in connection with itsmid-term check-up, we have decreased our consumerprice rise forecast for 2013 only moderately to 2%.Continued increase in public debtThe public sector fiscal deficit grew to 1.9% of totalproduction last year, while the deficit of centralgovernment finances increased to 3.4%. Due to subduedeconomic growth, the public sector deficit will decreasevery slowly, despite tax hikes. The deficit is estimated toremain at its current level of GDP in 2013 and todecrease to 1.5% of GDP in 2014. The governmentsborrowing need will continue to be significant and raisethe public debt to 55% of GDP at the end of the forecastperiod.Pasi Sorjonenpasi.sorjonen@nordea.com +358 9 165 59942Only modest increase in goods exports this yearThe fall in GDP bottoms out with higher confidenceEmployment set to deteriorate moreSales volumes expand very moderately
  • 15. ■ USA17 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSUSA: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (USDbn) 2010 2011 2012 2013E 2014EPrivate consumption 9,846 1.8 2.5 1.9 1.9 2.7Government consumption and investment 2,967 0.6 -3.1 -1.7 -2.3 -1.1Private fixed investment 1,703 -0.2 6.6 8.5 7.2 8.7- residential investment 354 -3.7 -1.4 12.1 14.7 13.3- equipment and softw are 898 8.9 11.0 6.9 5.7 7.7- non-residential structures 451 -15.6 2.8 10.1 4.4 6.1Stockbuilding* -154 1.5 -0.2 0.1 0.0 0.0Exports 1,587 11.1 6.7 3.3 2.7 5.0Imports 1,976 12.5 4.8 2.4 1.8 4.9GDP 2.4 1.8 2.2 1.9 2.8Nominal GDP (USDbn) 13,974 14,499 15,076 15,715 16,248 16,951Unemployment rate, % 9.6 8.9 8.1 7.6 6.8Industrial production, % y/y 5.4 4.1 3.8 3.7 5.4Consumer prices, % y/y 1.6 3.1 2.1 1.6 2.4Consumer prices ex. energy and food, % y/y 1.0 1.7 2.1 2.0 2.4Hourly earnings, % y/y 1.8 2.0 1.9 2.3 2.8Current account (USDbn) -442.0 -465.9 -471.4 -519.9 -593.3- % of GDP -3.0 -3.1 -3.0 -3.2 -3.5Federal budget balance (USDbn) -1,293.5 -1,295.6 -1,089.4 -820.5 -610.2- % of GDP -9.0 -8.7 -7.0 -5.1 -3.6Gross public debt, % of GDP 95.2 99.5 106.5 111.6 115.2Ready for lift-off Brighter prospects despite fiscal austerity … … thanks to improved private sector fundamentals Higher inflation pressures in 2014 First Fed rate hike in early 2015Beneath the recent data’s temporary ups and downs, theUS economy continues to grow roughly in line with ourforecast. Thus, real GDP is on track to grow around 2%in 2013, its average pace since the end of the Great Re-cession in 2008-2009. That’s actually quite positive con-sidering that measures to address the federal budget defi-cit are significantly cutting into growth. We estimate thatfiscal tightening will cut GDP growth by close to 2%points this year. This implies that absent the fiscal drag,we would be forecasting 3½-4% growth in 2013.In 2014 fiscal policy consolidation will continue to act asa drag on growth, and only slightly less so than in 2013.Nevertheless, thanks to much improved economic fun-damentals in the private sector we expect the recovery togain more traction next year with GDP growth strength-ening to close to 3%.Compared to our November forecast the new 2013 GDPgrowth estimate is slightly lower (1.9% versus 2.1%).However, the downward revision solely reflects weaker-than-expected Q4 2012 GDP data and hence a less fa-vourable carry-over effect for this year. Rather than re-flecting a stalling-out of the recovery the pause in realGDP last quarter seems due to weather-related disrup-tions caused by the Midwest drought and HurricaneSandy as well as transitory declines in defence spending.Available information suggests that economic growth haspicked up again this year.For 2014, however, our outlook is now somewhat moreoptimistic. The upward revision of the growth forecast to2.8% from 2.4% in November reflects our belief that thefirst increase from the Fed will come in early 2015 ratherthan already by mid-2014 as earlier assumed. With recentsignals that the Fed is now more willing to accept higherinflation, we have also revised lower the projected pathfor the Fed funds rate following the first rate hike. As aresult, US monetary conditions for 2014 will be some-what easier than earlier assumed.Bumpy road to recoveryOverall, we believe the stage is set for a stronger recov-ery, but not without bumps along the road. The lows andhighs are expected to be higher, though. As it standsnow, GDP growth is seen slowing from a 2¾% pace inthe current quarter to around 1% in Q2. The expectedtemporary slowdown is due to the impact of the end ofthe payroll tax cuts, recent increases in gasoline pricesand the significant across-the-board federal spendingcuts, which began on 1 March. However, as the effect ofthese shocks starts to fade the economy is likely to gainmore momentum in H2 2013 and through 2014.The forecast is based on the assumption that Congresswill agree to extend the current law funding governmentoperations otherwise set to expire on 27 March. As thethreat of a government default seems off the table as apolitical weapon for the Republicans to achieve deeperspending cuts, we are now much more confident thatCongress will reach a permanent agreement to raise thedebt ceiling (final deadline: late July or early August).Much improved economic fundamentalsThe stronger momentum is expected to be rather broad-based as both household and business sector fundamen-tals are much improved.* Contribution to GDP growth (% points)
  • 16. ■ USA18 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSThus, private sector deleveraging seems almost over andeven households might be done reducing debt. Initially,however, the acceleration in aggregate demand is ex-pected mainly to be driven by stronger business invest-ment and continued strength in residential investment.The sharp slowdown in business investment in H2 2012seems largely due to policy uncertainty related to the fis-cal cliff and the debt ceiling debate. But with US fiscaluncertainty now significantly diminished, a very highlevel of corporate profit margins, improved competitive-ness and continued gradual easing of credit conditions,the prospects for capital spending are quite bright.The fundamentals for housing activity point to furtherlarge gains in the next couple of years. Due to massiveunderbuilding during the slump years, the excess supplyof housing has largely been eliminated. As a result, hous-ing starts have seen a sharp increase over the past 1½year to currently around 900k units (annualised). Buteven at this level starts are unsustainably low. Givenhousehold formation – the rate at which new householdsare created, the key driver of housing demand – and typi-cal replacement building, a “normal” rate is around 1.3-1.4m units, or 50% higher than current construction ac-tivity.National home price increases are expected to exceed 5%in both 2013 and 2014, continuing the upward trendwhich began a year ago. With rising home and stockprices, household balance sheets continue to improve.Gains in net wealth, coupled with low interest rates, animproving labour market and continued easing of lendingconditions, should contribute to a pick-up also in privateconsumption growth going forward.Improving job market and higher inflation pressuresMost encouragingly, the job market is clearly improving,with only the government sector now shedding jobs. Weexpect employment growth to average 200k per monththis year, in line with last year’s trend, and 225k permonth in 2014 (as measured by the household survey ofthe jobs report). With an assumed steady labour forceparticipation rate, unemployment is forecast to reach7¼% by end-2013 and 6½% by end-2014.Given the Fed’s new numerical threshold rate guidance,the first rate hike is therefore expected in Q1 2015.With the business cycle adjustment seen more or lesscompleted in late 2014, signs of stronger underlying in-flation pressures – and potentially new asset bubbles –are projected to emerge in the latter part of the forecasthorizon.Johnny Bo Jakobsenjohnny.jakobsen@nordea.com +45 3333 6178Major fiscal drag in 2013 but slightly less in 2014Major improvement of private sector fundamentalsHousing recovery looks promisingJob market improvement likely to continue
  • 17. ■ Euro area19 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSSlow recovery, and we stress both words Recession should end in H1 2013 Progress on fundamentals, but increased political risk Inflation a non-issue in 2013/14 ECB on hold, but ready to act in case of emergencyWe revise the GDP forecast for 2013 quite substantiallyfrom +0.4% to -0.4%. Around half of that is due to aweaker than expected Q4 2012. The other half reflects aslightly more sceptical view on how strongly and quicklygrowth forces will gain the upper hand. We also takedown 2014 a bit but still expect growth to return.The Euro area is still struggling. GDP declined from Q42011 through to Q4 2012, while unemployment rose bymore than a percentage point to 11.7%. During recentmonths, however, sentiment indicators have picked upfrom low levels, indicating at least less contraction in Q1.To us, Mario Draghi’s “whatever it takes” speech last Ju-ly that calmed financial markets is the most importantdriver for that. The ECB bought time for governments toreform the economies and to re-invent growth models.And there is indeed progress on structural issues: budgetdeficits are declining and current account positions of thecrisis countries are improving.Italian elections – a game changer?Overcoming the aftermaths of a financial crisis is hardand growth difficult to achieve in a post-bubble world, allthe more so when new financial sector regulation acts asa drag. Political stability and a consistent economic poli-cy are key ingredients for progress. With the inconclu-sive outcome of the elections in Italy, political risk hasincreased again, causing volatility in financial markets.The Italian bond market is the third-largest in the world,so there is no room for complacency. A new debate abouthow much austerity is needed has already started. As aresult of the Italian vote, we consider it as quite likelythat economic policy not only in Italy will be geared to-wards slightly less short-term austerity. Given the back-stop provided by the ECB and Italy’s fundamentals thatare much stronger than those of Greece and Cyprus, wedo not expect a full-blown return of the euro crisis. How-ever, sentiment can be negatively affected if the for-mation of a new government drags on and if politicalturmoil (eg between Germany on the one hand andFrance/Italy on the other) flares up again.Diversity here to stay for a whileLarge differences between countries are still very much afeature of the macro picture in the Euro area and this willnot change for a while. Confidence returned quickly inIreland but not in Greece and Spain. Unemployment is ata record high there and recently reached a 15-year high inFrance, whereas in Germany employment is at an all-time high. These differences can be explained by thestance of fiscal policy, by how easily low policy ratesfeed through to the real economy and by differing de-grees of competiveness. We continue to expect that therecovery will be very much two-speed or even multi-speed, with Germany and a few smaller economies likeIreland leading, the southern periphery countries laggingand France somewhere in between.Why we expect the economy to grow in 2014The risk of digging deep into Euro-area issues is discov-ering more and more weak spots and getting carriedaway by scepticism. However, despite many obstaclesand the drag imposed by new regulation, we would con-sider writing off the recovery as a mistake, and here iswhy: 1) We expect monetary policy to remain extremelyloose and the transmission mechanism to work betterover time as imbalances decline and confidence strength-ens bit by bit. 2) Fiscal policy is highly restrictive thisyear but probably much less so next year. 3) A weakereuro and healthy growth in the US and many EmergingMarkets should provide tailwind to exports. 4) Structuralreforms and efforts to regain competitiveness will pay off– although we have to admit that we don’t know exactlywhen.Underlying inflationary pressure still very lowIf you are looking for something you don’t have to worryabout in 2013/14, it is inflation. The year-over-year ratewas 1.8% in February, on a downward trend. StrippingEuro area: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014EPrivate consumption 5134 0.9 0.1 -1.2 -0.5 0.8Government consumption 1988 0.7 -0.1 -0.1 0.0 0.5Fixed investments 1731 -0.3 1.6 -3.9 -1.0 5.7Exports 3285 11.0 6.5 2.9 2.5 7.3Imports 3167 9.5 4.3 -0.9 2.0 8.0Net exports* 118 0.7 0.9 1.6 0.2 -0.1GDP 2.0 1.5 -0.5 -0.4 1.4Nominal GDP, EUR bn 8920 9176 9421 9483 9578 9770Unemployment rate, % 10.1 10.2 11.4 11.7 11.4Consumer prices, % y/y 1.6 2.7 2.5 1.6 1.6Current account, % of GDP 0.3 0.2 1.5 2.2 2.3General government budget balance, % of GDP -6.2 -4.1 -3.6 -2.8 -2.7General government gross debt, % of GDP 85.6 88.1 93.1 95.1 95.2* Contribution to GDP growth (% points)
  • 18. ■ Euro area20 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSout energy and unprocessed food, the latest reading is1.5%, of which around ¼% point is due to increases inindirect taxes. In Spain, Greece and Portugal deflationaryforces pushed the inflation rate calculated at constant taxrates close to zero. Estimates of the output gap (whichmeasures the degree of slack in the economy) vary of lot,but it is probably fair to assume at least 2% for the Euroarea. Therefore, although inflation might be a long-termthreat if the economy picks up strongly and the ECB putsits foot on the brake pedal too late, it is certainly not a bigissue in the next few quarters when compared to thegrowth and structural challenges the Euro area is facing.ECB rates on hold until late 2014We expect the ECB to keep its policy rates on hold untillate 2014. There is still a risk that the ECB could decideto cut its refi rate in the coming months if key figuresremain weak. In our view, however, the ECB is likely toconsider the benefits of additional rate cuts to be toosmall given that market rates are very low already. Risingmarket rates, and consequently a stronger EUR, couldtherefore be the trigger point for one or two more refirate cuts, if key figures remain weak at the same time.Risks to the timing of the first rate hike are obviouslysignificant given the dire straits of the Euro-area econo-my. The most likely scenario, in our view, is one wherethe ECB will be fairly eager to hike policy rates once thegrowth momentum is strong enough for inflation (expec-tations) to start rising. We still see the first rate hike atthe end of 2014 and believe this is a fairly balanced view.But the most likely scenario is also one where the ECBwill continue to offer unlimited amounts of liquiditythroughout our forecast horizon and let banks decide howmuch they need. Since we now expect the recovery to bemore protracted it will take longer for banks to get offECB’s liquidity support and hence excess liquidity willremain in the banking system even longer than previous-ly thought, and, as a consequence, market rates will alsoremain very low.Holger Sandteholger.sandte@nordea.com +45 3333 1191Anders Svendsenanders.svendsen@nordea.com +45 3333 3951Gradual recoveryConsumer confidence – Large divergenciesSome progress on convergenceMonetary policy still extremely lenient
  • 19. ■ Germany21 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSGreat expectationsA lot of hope and expectations are currently placed onthe German economy. Germany is well known as a pow-erful exporter, but imports of goods and services also ac-count for 46% of its nominal GDP. Therefore, an accel-erating German economy would provide some welcomesupport to partner countries.For several reasons, we expect Germany to outperformthe other large European economies in terms of growth in2013/14. First, financial conditions are easy. Second, theimpact of fiscal policy on the economy is expected to beneutral and not highly restrictive as in Italy and Spain.The labour market has proved resilient in recent months.That should be a healthy basis for a further expansion ofprivate consumption this year. Lastly, the German indus-try with its large share of investment goods still lookswell placed to benefit from sustained growth in manyEmerging Markets. We expect real GDP to grow by0.7% this year (1.7% y/y in Q4 2013). Based on the as-sumptions that 1) at least some of the Euro-peripherycountries return to growth and that 2) the recovery in theUS goes on, we expect the German economy to expandby 2.1% in 2014.However, there are also risks to our forecasts. The Ger-man economy is highly dependent on exports, both ingood times and bad. And although the share of goods ex-ports to other EMU countries has decreased in recentyears, it still amounts to 40%. A deepening of the crisisin Southern Europe and/or France falling into a severerecession would dampen growth markedly. An apprecia-tion of the euro, however, would pose fewer problems toGerman manufacturers than to some of their competitors.This is because the level of product sophistication ofGerman goods exports is high and the price elasticityquite low. A factor to watch will be the general electionon 22 September. We will get back to that in the next is-sue of Economic Outlook.Holger Sandteholger.sandte@nordea.com +45 3333 1191Back to growthForeign orders from outside the EZ going strongStable labour market supports private consumptionGermany: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014EPrivate consumption 1,392 0.8 1.7 0.6 0.5 1.0Government consumption and investment 475 1.7 1.0 1.4 1.3 1.0Fixed investment 409 5.6 6.4 -1.9 3.2 6.7Exports 1,007 13.4 7.9 4.3 2.4 6.0Imports 890 10.9 7.5 2.2 3.6 6.7Net exports* 117 1.6 0.6 1.2 -0.4 0.2GDP 4.0 3.1 0.9 0.7 2.1Nominal GDP (EURbn) 2,375 2,496 2,593 2,644 2,697 2,764Unemployment rate, % 7.7 7.1 6.8 6.8 6.5Consumer prices, % y/y 1.2 2.5 2.1 1.5 1.7Current account, % of GDP 6.1 5.6 6.3 6.0 5.6General government budget balance, % of GDP -4.1 -0.8 0.2 -0.5 0.2Gross public debt, % of GDP 82.5 80.5 81.6 80.7 78.3* Contribution to GDP growth (% points)
  • 20. ■ France22 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSNo easy way out of the gloomRecent news on the French economy was bad: GDP de-clined in three out of the last four quarters; unemploy-ment hit a 15-year high in January (although part of thelatest increase was due to changes in counting methodol-ogy); French politicians had to admit that the 3% publicdeficit target for 2013 is out of reach as it was based onan overly optimistic growth forecast of 0.8%.Growth is held back by both cyclical and structural fac-tors. Fiscal policy is slightly restrictive. Exports to im-portant but recession-plagued trading partners Italy andSpain are shrinking. If these countries return to at leastslow growth from H2 2013, that will help France as well.But there are more reasons why France is lagging behind.Manufacturing makes up only 10% of gross value added.France lacks export-orientated medium-sized companieslike those in Germany and Italy. Moreover, exports areonly to a small degree orientated towards the fast grow-ing Asian economies.France also seems to be falling behind in terms of busi-ness conditions. Regulation, labour costs and taxes prob-ably play a role. And whereas other countries are tryingto improve conditions for investment and job creation,reform efforts in France are often half-hearted. Manypoliticians cling to the view that there is an “exceptionfrançaise”, a French way around what other countries ac-cept as the – sometimes rude – rules of competition.We would not be surprised to see French GDP declineagain in the current quarter. The most likely stimulus foran improvement in the course of the year comes fromabroad: a further decrease in uncertainty related to theeuro crisis and an ongoing recovery of the world econo-my. In terms of fiscal policy, we expect that Brussels willallow a higher deficit if there is some additional consoli-dation effort from the French government. We expect noGDP growth for 2013 as a whole with a moderate pick-up during the year and a slightly better 2014.Holger Sandteholger.sandte@nordea.com +45 3333 1191Growth: moderate expectationsIndustrial production: mind the gap!Public finances in poor shapeFrance: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014EPrivate consumption 1,392 1.5 0.3 0.0 0.0 0.8Government consumption and investment 475 1.7 0.2 1.4 1.0 0.5Fixed investment 409 1.0 3.5 0.0 -0.7 2.4Exports 1,007 9.2 5.5 2.3 1.0 4.3Imports 890 8.4 5.2 -0.3 0.5 4.0Net exports* 117 0.0 0.0 0.7 0.2 0.1GDP 1.6 1.7 0.0 0.0 1.2Nominal GDP (EURbn) 1,886 1,936 1,995 2,028 2,048 2,089Unemployment rate, % 9.7 9.6 10.3 10.7 10.3Consumer prices, % y/y 1.7 2.3 2.2 1.6 1.7Current account, % of GDP -2.0 -2.6 -1.9 -1.6 -1.8General government budget balance, % of GDP -7.1 -5.2 -4.6 -3.8 -4.1Gross public debt, % of GDP 82.3 86.0 90.3 93.4 95.0* Contribution to GDP growth (% points)
  • 21. ■ United Kingdom23 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSUncertaintiesAccording to the National Institute, the UK is experienc-ing its slowest post-recession recovery in 100 years withtrend growth, and growth in 2012, just around zero. Theunderlying growth momentum is hard to assess given theadditional bank holiday in Q2, the Olympics in Q3 and atemporary closure of the biggest oil field in Q4, but webelieve it improved a bit towards the end of last year. Weexpect slow but positive growth over the forecast hori-zon, with the second half of 2013 looking brighter thanthe first half, and 2014 looking brighter than 2013.The labour market is holding up well so far. Employmentis at an all-time high and the unemployment rate fell be-low 8% at the end of 2012. Still, wages are growingslower than inflation and it will probably take a combina-tion of lower inflation and a stronger recovery for con-sumer spending growth to remain positive going forward.There are good reasons to expect a slow and protractedrecovery. Export markets are mixed with weakness in theEuro area likely to persist but with improvements else-where. And companies seem to hold back investmentsbecause of numerous uncertainties, which include the Eu-ro-area crisis, fiscal consolidation plans after Moody’sdowngrade, the future EU relationship after Mr Camer-on’s speech and the Bank of England’s monetary policyand inflation regime when Mr Carney becomes governor.The Bank of England’s new governor from 1 July hasmade it fairly clear that he thinks additional monetaryeasing is warranted. He has even spoken openly aboutnominal GDP targeting or introducing other targets suchas the unemployment rate, like the Fed has. We still findit fairly unlikely that it will come to that, but more mone-tary easing looks more likely. Thus, the GBP may con-tinue to weaken in the near term and especially until theoutlook for monetary policy becomes clear. In the medi-um term, we expect a stronger GBP against the EUR anda weaker GBP against the USD.Anders Svendsenanders.svendsen@nordea.com +45 3333 3951Weak growth momentumEmployment at all-time highWeaker GBP near term* Contribution to GDP growth (% points)United Kingdom: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (GBPbn) 2010 2011 2012 2013E 2014EPrivate consumption 896 1.3 -1.0 1.0 1.0 2.0Government consumption 328 0.4 -0.1 2.6 -0.4 -1.5Fixed investment 209 3.5 -2.9 1.4 0.7 3.8Stockbuilding* -11 0.9 0.4 -0.2 -0.2 -0.2Exports 404 6.4 4.6 -0.3 2.1 4.4Imports 425 8.0 0.5 2.0 1.2 3.5GDP 1.8 0.9 0.2 0.6 1.5Nominal GDP (GBPbn) 1,402 1,467 1,516 1,539 1,572 1,622Unemployment rate, % 7.8 8.0 7.9 7.8 7.7Consumer prices, % y/y 3.3 4.5 2.8 2.2 2.0Current account, % of GDP -2.5 -1.3 -3.7 -3.0 -1.8General govt budget balance, % of GDP -10.2 -7.8 -6.5 -6.5 -5.0Gross public debt, % of GDP 79.4 82.0 90.0 94.0 97.0
  • 22. ■ Japan24 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSSayonara deflation, konnichiwa growthIn 2012 Japan fell into recession for the third time in fouryears. The new premier, Shinzo Abe, is determined toend the decade-long deflation, which he believes is theroot of all evil. He recently nominated Haruhiko Kuroda,a long-standing dove, to head Bank of Japan. Kuroda haspledged to do “anything and everything” to reach the 2%inflation target committed by BoJ in January. The pro-spect of aggressive monetary easing has caused the yento weaken 20% against the dollar and equities to rally.Inflation expectations, measured by breakeven inflation,have soared to historical highs as we speak.Abe is confident that his recent efforts will bring up realgrowth to 2% in the fiscal year ending March 2014.While we do not share his optimism to the same degree,we recognise that current expansionary monetary and fis-cal policies are positive for the economy in several ways.1) The weaker yen improves Japanese competitivenessand boosts net exports; 2) public infrastructure work ispositive for job creation; 3) Abe is considering tax breaksfor companies that raise pay or expand hiring. This willlift household income and spending; 4) higher inflationmay push down real interest rates and promotes borrow-ing that may feed into higher household consumption andprivate investment; 5) an end of many years wage defla-tion will give more optimism to the households and leadto a higher marginal propensity to consume. As a resultof the above-mentioned factors we revise up our 2013and 2014 GDP forecasts.On a longer horizon we remain cautious on Japan. Thecountry of the rising sun faces a number of structuralchallenges, which cannot be solved by rising inflationand currency depreciation. The politicians should focuson stabilising the fiscal balance by cutting social securityspending or further raising consumption tax. In addition,both labour productivity and female labour participationare below OECD averages and need to improve. Unfor-tunately, no concrete long-term reform plan is signalled.Amy Yuan Zhuang, CFAAmy.yuan.zhuang@nordea.com +45 3333 5607Inflation expectations have surgedNegative wage growth in many yearsLabour force can (easily) be boostedJapan: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (JPYbn) 2010 2011 2012 2013E 2014EPrivate consumption 277,199 2.8 0.5 2.4 1.7 1.7Government consumption 93,872 1.9 1.4 2.7 1.3 0.7Gross fixed capital formation 97,906 -0.2 1.2 4.4 1.8 0.6Stockbuilding* -5,299 0.9 -0.5 0.0 -0.2 -0.1Exports 59,777 24.5 -0.4 -0.2 3.0 3.6Imports 58,110 11.1 5.9 5.3 4.0 4.8GDP 4.7 -0.5 2.0 1.4 1.1Nominal GDP (JPYbn) 471,073 482,427 470,802 475,745 485,260 495,935Unemployment rate, % 5.1 4.6 4.4 3.6 3.2Consumer prices, % y/y -0.7 -0.3 0.0 0.4 0.8Current account, % of GDP 3.7 2.0 1.6 2.0 2.1General government budget balance, % of GDP -9.5 -10.0 -10.2 -9.8 -9.3* Contribution to GDP growth (% points)
  • 23. ■ Poland25 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSThe worst is over Economy nearing the bottom Fiscal consolidation put on hold Monetary policy easing done Euro adoption not a near-term priorityOn the verge of recession…Last year was one of the toughest for the Polish economyin modern history. Fallout from the recession in the Euroarea and a lethal mix of domestic policies pushed theEU’s largest Eastern economy to the brink of recession.Contrary to developments in 2008/2009, this time arounddomestic factors also added to headwind for the econo-my. First, fiscal consolidation proved a substantial dragon economic activity, especially through a slump in in-vestment in the public sector (some of the reasons beingthe end preparations for UEFA Euro 2012 and the deple-tion of EU funds from the financial perspective for 2007-2013). Second, a tougher stance of new leadership at thePolish FSA and tightening of financial regulation (in-cluding an effective ban of FX loans for households sincethe start of 2012) worked in a pro-cyclical way, contrib-uting to significant weakening of lending activity. Third,the Monetary Policy Council (MPC) of the NationalBank of Poland (NBP) had long been too optimistic ongrowth prospects and conducted an excessively restric-tive monetary policy.… but recovery in sightEven despite all the headwind, the Polish economy hasonce again proved resilient and managed to avoid reces-sion. We expect that the worst is over for the Polisheconomy and it should bottom out in Q2 2013 at the lat-est. The key driver of the upcoming recovery will be arebound in the German economy, especially in exports ofthe Euro area’s largest economy, which contain increas-ingly large input from Poland. Positive impulses for theexport sector will gradually filter through to the rest ofthe economy, but domestic demand will remain de-pressed at least until mid-2013.A continued slump in public investment in the first halfof this year will weigh on total investment activity. Onlyin the second half of 2013 will public investment likelystabilise at lowered level thanks to the government’s in-tention to put fiscal consolidation on hold to give theeconomy a breather. At the same time, investment in theprivate sector should start to pick up on the back of im-proved prospects of external demand. Beyond 2013, in-vestment activity should be additionally supported by thenew sovereign investment vehicle and inflow of fresh EUfunds (in the EU’s financial perspective for 2014-2020Poland will get EUR 105.8bn, a few per cent more thanin the previous financial perspective).Consumption should also recover gradually from the un-precedented fall in the final quarter of 2012. While la-bour market conditions will remain difficult well into2013, the pace of unemployment growth should weakensoon while average wage growth in nominal termsshould stabilise after last year’s deceleration. At the sametime, a sharp inflation drop will boost real incomegrowth. Additional positive factors for private consump-tion will be high increases in social benefits in 2013 (in-dexed to high inflation last year). Consumption could al-so be fuelled by a revival in consumer loans sparked by aplanned introduction of easier lending standards (correc-tion of earlier tightening in rules of the Polish FSA). Onthe other hand, a drag on consumption growth will be aneed to further rebuild households’ savings after the sav-ings rate dropped to record lows in the first half of 2012.In the medium-term the Polish economy should be sup-ported by the supply-side improvements, ie substantialupgraded in infrastructure and improved business envi-ronment (Poland was top improver in the World Bank’sDoing Business report for 2013).Inflation subdued for longA continued drop in domestic demand in H1 2013 meansthat headline inflation rate will go down further to belowthe target range of 1.5%-3.5% before mid-2013. As eco-nomic recovery later on will not be impressive, with theGDP growth rate staying below the potential level untilPoland: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (PLNbn) 2010 2011 2012 2013E 2014EPrivate consumption 810 3.2 2.5 0.5 0.3 1.8Government consumption 249 4.1 -1.7 0.0 0.0 2.0Gross fixed capital formation 285 -0.4 9.0 0.6 -2.4 5.0Exports 530 12.1 7.7 2.4 2.1 5.0Imports 529 13.9 5.5 -1.9 -2.1 5.5GDP 3.9 4.3 2.0 1.8 2.8Nominal GDP (PLNbn) 1,345 1,417 1,523 1,596 1,631 1,692Unemployment rate, % 12.4 12.5 13.4 13.8 13.4Consumer prices, % y/y 2.6 4.3 3.7 1.6 2.5Current account, % of GDP -5.1 -4.9 -3.5 -2.5 -3.1General government budget balance, % of GDP -7.8 -5.0 -3.5 -3.8 -3.2
  • 24. ■ Poland26 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSthe end of 2014, we expect inflationary pressures to re-main subdued for a long time, with CPI inflation stayingwithin the target range over the forecast horizon.Monetary policy on holdFollowing a reduction in the key policy rate from 4.75%to a record-low of 3.25%, the Polish MPC has shifted in-to wait-and-see mode. We do not expect further policyeasing unless the economy fails to revive until mid-2013.On the other hand, with a very favourable inflation out-look the MPC is not likely to start monetary tighteninganytime soon. Economic recovery will not be strongenough to close the output gap until 2015 and thus we donot expect the first pre-emptive rate hike until mid-2014.Euro adoption is not a near-term priorityThe Polish government has recently revived the debateon euro adoption (which reflects Poland’s political ambi-tion to be at the core of Europe), but there is wide con-sensus that any decision on a target date should not bemade until support for the necessary constitutionalchange is secured (this would require a two-thirds ma-jority in the parliament or an ordinary majority in a refer-endum). This does not seem viable before the parliamen-tary elections in 2015 and even after it could be difficultgiven how the Polish voters’ political preferences areevolving. Moreover, there is growing awareness amongpolicymakers that successful EMU membership requiresmore than just meeting the Maastricht criteria for nomi-nal convergence. Thus, Poland’s road to euro adoption isnot going to be a fast track and we do not expect thecountry to join the EMU until 2020.PLN to resume appreciation trendFollowing appreciation in 2012, early this year the PLNwas hurt by weak domestic macroeconomic indicatorsand it has not benefited from the rise in global risk appe-tite. We think the PLN will resume its appreciation trendas the domestic economy starts to recover later this yearand the country’s fundamentals are still seen as sound.However, a possibility of at least partial reversal ofstrong inflows of foreign capital into the local debt mar-ket constrains the PLN’s room for appreciation. Whilerelatively weak external balances (eg relatively high ex-ternal debt) remain a risk factor for the PLN, there hasbeen some improvement in this area recently (narrowingof C/A gap and drop in short-term debt). Besides, Polandhas prolonged the precautionary credit line (FCL) fromthe IMF and the PLN is supported by positive rating ac-tions (recently Fitch ratings revised up outlook for Po-land’s rating while the Japanese JCR upgraded the rat-ing).Piotr Bujakpiotr.bujak@nordea.com +48 22 521 36 51On the brink of recession……waiting for positive impulse from outsideMonetary policy shifted into wait-and-see modePLN to resume appreciation trend
  • 25. ■ Russia27 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSLooming dilemma Growth concern appears on the horizon The CBR faces dilemma RUB retains strong long-term perspective … … more vulnerable in the near termLast year Russia’s GDP grew by 3.4%, which can beconsidered as quite optimistic. However, the growth rateswere below our forecasts, with fixed capital investmentbeing a major drag. A major driver – as it was antici-pated to remain the same – household consumption re-tained robust momentum on the back of strong growth inreal wages and historically low unemployment. Growthrates of household borrowings slowed down slightly atthe end of 2012 but still remained high, exceeding 40%y-o-y. Household consumption accounted for more than50% of GDP.On the other hand, investment remained a major con-cern. In 2012 capital investment growth rates sloweddown to 6.7% (y-o-y) and it is highly probable that thistrend will remain unchanged at the beginning of 2013. Aslow-down in capital investment may become a majordrag on the economy this year. We have made a down-ward revision to growth to 3.5% in 2013. This number isrealistic but not so easy to achieve. We expect householdconsumption to remain the driving force of the economygiven the weak investment activity, negative net exportgrowth and almost stagnant government consumption.Elements of growthThe current government retains relatively high endorse-ment levels and has launched several reforms in order toimprove the financial infrastructure and macro environ-ment.Since the summer of 2012 when Russia formally be-came a WTO member, Russia has continued to bring itstrade laws and practices into compliance with WTOrules, integrating its trading system with the rest of theworld. The positive impact will not be immediate, but inthe long term WTO membership can add 0.5%-1% to an-nual GDP growth according to conservative estimates.Financial market liberalisation reform and Ease of DoingBusiness reforms could be other elements of growth.Central depositary and new rules allow EU custodies di-rect access to the Russian sovereign debt market. A newfinancial market infrastructure makes Russia more attrac-tive for foreign investments, which may exceed 40 bn on-ly in government debt market during 2013.Russia’s ranking in the Ease of Doing Business index hasimproved from a place at number 118 in early 2012 to112 at present. The major progress was in the taxationoptimisation component (64th position among 185 econ-omies).An ambitious USD 8.5bn privatisation programme isplanned for 2013 with a total amount of assets for pri-vatesation of about USD 100bn until end-2016. This pro-cess will continue to improve the investment climate andcompetitive strength of the economy. Ongoing efforts bythe Russian government to curb corruption has led to im-provement in the Corruption Perception Index and fur-ther progress is on the way.Inflationary pressure increased againInflation continues to pick up from a historical bottomlevel below 4% in May 2012. A tariff hike at the begin-ning of 2013 helped drive inflation above 7% in January,reaching an 18-month high in February (7.3%) well out-side the CBR’s 5-6% 2013 target range. Prices rose fastat the start of the year on transport fares and excise taxindexing, with unfavourable food price effects also add-ing to the tension.We expect inflation to decelerate during April-June 2013,with headline inflation decreasing below 7% but stayingabove 6% y/y. In July postponed second-round utility tar-iff hikes will lift inflation again. However, if the harvestdoes not let the market down, we will see deceleration ofinflation with a deflationary impact of food prices at theend of the summer. A historically low pace of growth ofthe M2 aggregate will also help to cap price pressure.Still, it will be an uphill battle to keep inflation within thecurrent CBR target of 5-6% y/y by the end of 2013. Ourinflation forecast for 2013 is 6.4%.Russia: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (RUBbn) 2010 2011 2012 2013E 2014EPrivate consumption 21,203 5.5 6.4 6.6 6.4 6.5Government consumption 8,067 -1.5 1.2 0.0 0.3 0.5Fixed investment 8,536 6.0 8.3 6.7 6.5 6.5Exports 10,842 7.0 0.3 1.8 1.8 1.5Imports 7,954 25.8 20.3 8.7 8.5 8.2GDP 4.5 4.3 3.4 3.5 3.6Nominal GDP (RUBbn) 38,807 46,322 55,799 62,357 70,993 79,432Unemployment rate, % 7.5 6.6 5.5 5.7 5.7Consumer prices, % y/y 8.8 6.1 6.6 6.4 5.9Current account, % of GDP 5.0 5.4 4.3 3.0 2.5Central govt budget balance, % of GDP -3.9 0.8 -0.2 0.3 0.2
  • 26. ■ Russia28 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSThe Bank of Russia is under pressureThe Bank of Russia (CBR) continues to target inflation.Last September CBR raised all key interest rates in orderto cap growing inflation. In December the CBR narrowedthe interest rate corridor by raising its deposit interestrate by 25 bp. The CBR’s influence on the money marketis profound and the regulator remains the major liquiditysupplier on the money market.At the beginning of 2013 the CBR continued to keep li-quidity tight, trying to maintain inflation close to its 2013target of 5-6%. But despite the fact that the CBR contin-ued to pay more attention to accelerating inflation,growth concerns have started to appear again in thebank’s statements. A growing risk of slowing economicgrowth has put some pressure on the CBR, signalling alooming dilemma for policymakers. It should also benoted that Sergey Ignatiev (current CBR chairman) willretire this June. The CBR’s current policies may bechanged by the new chairman.In the coming months the CBR will likely keep liquiditytight, and ON rates will stay not far from the upper edgeof the interest rate corridor (6.5%). Key interest ratesmay remain unchanged as the CBR anticipates inflation-ary pressure to ease. If so, the CBR may consider cuttinginterest rates in H2 2013.RUB retains long-term potentialThe rouble continues to retain a high correlation with oilprice dynamics. However, intensified worries over thepace of economic growth could make the rouble morevulnerable.At the beginning of 2013 the RUB reached new peaks(since Q2 2012) versus the USD, but then retreated on oilprice declines like other oil commodity currencies. Com-pared to other commodity currencies, the rouble looksrelatively attractive – last year volatility and changes inthe exchange rate of the rouble were practically identicalto those of the New Zealand dollar, Canadian dollar andAustralian dollar.It is highly probable that the CBR will continue to scaledown its influence in the domestic currency market. Atpresent the RUB basket (55% USD and 45% EUR) float-ing corridor band is set at 31.65-38.65. We expect thatthe CBR will widen the corridor by one rouble in H12013 in line with its guidelines to make the RUB freelyfloating in 2015.Of course, economic growth concerns and unclear CBRpolicy perspectives could put some pressure on the rou-ble near term. However, our oil price forecast of USD109-113/bbl for 2013 remains rouble supportive, and inthe long run we see room for appreciation.Dmitry Savchenko, CFAdmitry.savchenko@nordea.ru +7 495 777 34 77 4194Inflation can decelerate in the coming monthsIntrigue over further CBR policy is increasingCBR currency basket band can be widenedReal wage growth supports consumption
  • 27. ■ Estonia29 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSRecovery proceeding, deleveraging completedThe Estonian economy exceeded expectations with 3.2%growth on average last year (Q4: 3.7% y/y). Growth wasunderpinned by strong investment demand and resilientconsumption. Despite headwinds from slowing globaltrade from mid-last year, exports managed to hold up ra-ther well (goods exports were up 4% y/y in 2012).Domestic demand continues to drive growth. Consump-tion is supported by gradually falling unemployment andmore so by positive real wage growth, which after fallingby 4% in 2011 returned to 2% growth last year. Realwages are expected to continue growing at the currentpace, with a possible acceleration towards the end of theforecast period when unemployment is forecast to fall be-low the 9% mark. Real income growth will furthermorebe supported by gradually declining inflation. Price pres-sures from global energy and food prices are assumed tobe limited, but risks are on the upside should risk appetiterecover. The key long-term labour market challenges,which could enhance purchasing power, are reducingstructural unemployment, supporting a shift towardshigher value-added industries and increasing entrepre-neurship.Growth is expected to moderate only temporarily in H12013 due to slower (mainly public) investment, base ef-fects and subdued export volumes. Investment demandfrom private enterprises will continue strong, supportedby growing business volumes, profitability, and an on-going recovery in the real estate sector. Deleveraging hascome to an end. After four years of decline, the loans andleasing portfolio (of the real sector) is growing again.Overall, the economy is expected to re-accelerate intonext year as export demand and investment appetitegradually return. With only a gradual recovery in sightfor Euro-area demand in H2, any pick-up in growth mo-mentum for Estonia will likely remain muted in 2013.There is still considerable uncertainty related to the speedof recovery in the Euro area, which is the destination of30% of Estonian goods exports. Thus, a return to the po-tential growth trajectory is not expected until late 2014.Tönu Palmtonu.palm@nordea.com + 372 628 3345Domestic demand continues to drive growthLabour market tightening supports wage growthDeleveraging completed: loans and leasing growingEstonia: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EUR bn) 2010 2011 2012 2013 2014EPrivate consumption 7.41 -2.4 3.5 4.4 3.2 3.8Government consumption 3.05 -0.8 1.4 4.0 1.0 0.8Fixed investment 2.97 -7.4 25.7 21.0 5.0 6.6Exports 8.96 22.9 23.4 6.0 5.0 6.5Imports 8.15 21.0 25.0 9.0 5.5 6.6GDP 3.3 8.3 3.2 3.2 3.8Nominal GDP (EURbn) 13.8 14.3 16.0 17.0 18.0 19.2Unemployment rate, % 16.9 12.5 10.2 9.2 8.5Consumer prices, % y/y 3.0 5.0 3.9 3.5 3.3Current account, % of GDP 3.2 2.1 -1.5 -2.1 -2.2General govt budget balance, % of GDP 0.2 1.1 -0.2 -0.3 -0.1
  • 28. ■ Latvia30 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSOn track to join the Euro zone in 2014In 2012 the economy recorded robust growth for the sec-ond year in a row. Exports grew significantly less than in2011, but this was compensated by a strong increase indomestic demand. Increases in employment and moder-ate real wage growth helped fuel domestic demand lastyear. In addition, deleveraging in the private sector hasnow been going on for more than four years, so its dragon demand is gradually decreasing.Latvia is well on track to become the 18thEMU memberin 2014. On 5 March the government of Latvia submitteda request to the European Commission and the EuropeanCentral Bank to evaluate the eligibility of Latvia to be-come a member of the Euro area. The convergence re-ports from the EC and the ECB expected in May are thefinal hurdle on the country’s road to the euro. Given apositive convergence assessment, a “yes” vote by theEcofin Council appears to be a near-certainty.According to our assessment, Latvia meets all of theMaastricht convergence criteria. It has been participatingin the Exchange Rate Mechanism II since 2005.The pub-lic sector deficit in 2012 is estimated at about 1.5% ofGDP in ESA’95 terms while the public debt stands atabout 42% of GDP, both well below the maximum al-lowed thresholds. In January 2013 the 12-month averageinflation in Latvia was 2.05%, safely below the criterionvalue of 2.75%. The long-term interest rate criterionshould not pose a problem either. Yields on governmentdebt during last year have come down significantly asmacroeconomic and financial stability has returned.We expect economic growth in 2013 to slow downslightly from the high rates achieved during the past twoyears, mainly due to stagnation in the Euro zone furtherslowing down export growth. In the absence of sizeablenegative external shocks, the positive effects from the eu-ro accession should result in growth gaining steam againin 2014.Andris Strazdsandris.strazds@nordea.com +371 67 096 096Merchandise exports growth slowing downConsumer confidence picking upCDS rates declining since last summerLatvia: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (LVLmn) 2010 2011 2012 2013E 2014EPrivate consumption 8,026 2.4 4.8 5.4 4.2 4.5Government consumption 2,557 -7.9 1.1 -0.2 0.5 1.5Fixed investment 2,820 -18.1 27.9 12.3 5.0 7.0Exports 5,742 11.6 12.7 7.1 3.0 4.5Imports 5,935 11.4 22.7 3.1 3.4 5.0GDP -0.9 5.5 5.6 3.7 4.4Nominal GDP (LVLmn) 13,070 12,784 14,275 15,520 16,350 17,450Unemployment rate, % 18.7 16.2 14.9 13.6 12.0Consumer prices, % y/y -1.1 4.4 2.3 1.6 2.7Current account, % of GDP 3.0 -2.2 -1.7 -2.3 -3.0General govt budget balance, % of GDP -8.2 -3.5 -1.5 -1.2 -1.0
  • 29. ■ Lithuania31 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSTime for internal revaluationLithuanian economic growth averaged 3.6% in 2012 andwas the second-largest in the EU – just behind its north-ern neighbour Latvia. Growth was driven by both export-and domestically-oriented sectors, indicating that theeconomy has firmly entered the recovery phase of thebusiness cycle. Taken as a whole, Lithuanian GDP hasalready increased by 13.4% from the lowest levels in2009 Q4 and is expected to reach pre-crisis levels at thebeginning of 2014.Contrary to the pre-crisis period, Lithuanian economicgrowth is noticeably more balanced. The current accountdeficit is less than 1% of GDP, private credit growth isclose to zero with the private debt-to-GDP ratio being thelowest in the EU. Public deficit and public debt stand at3% and 40% of GDP, respectively, and are in line withthe Maastricht criteria. But most importantly is that overthe past four years labour productivity growth has out-paced that of wages, improving Lithuania’s global com-petitiveness and making room for more rapid wage in-creases in future.Summing up, Lithuania has undertaken successful inter-nal devaluation and is now ready for internal revaluation.Indeed, consumer confidence is at its highest level sinceend-2007, indicating that private consumption growthwill continue. Rising wages and falling unemploymentshould replace pent-up demand as the key driver of pri-vate consumption. Industrial confidence indicators sug-gest that export growth will remain solid as well. Overall,the Lithuanian economy will continue growing at a ro-bust 4-4.5% over the next two years.A potential flare-up of the Euro area sovereign debt crisisand the risk of rising commodity prices remain the majorexternal threats to the Lithuanian economy. And lack ofcorporate investments, qualified labour force and politi-cal uncertainty are the major local threats that may un-dermine future economic growth.Žygimantas Mauricaszygimantas.mauricas@nordea.com +370 612 66291Lithuanian GDP will reach pre-crisis levels in 2014Lack of corporate investments is the biggest threatRight time for internal revaluationLithuania: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (LTLmn) 2010 2011 2012 2013E 2014EPrivate consumption 62,807 -4.8 6.3 4.7 3.7 3.8Government consumption 20,130 -3.4 0.5 0.7 1.6 2.0Fixed investment 15,807 1.9 18.3 -2.5 6.0 8.2Exports 49,905 17.4 14.1 11.2 6.5 7.5Imports 51,519 18.0 13.7 5.6 7.4 7.8GDP 1.5 5.9 3.6 4.0 4.2Nominal GDP (LTLmn) 92,032 95,323 106,370 113,189 120,659 130,071Unemployment rate, % 17.8 15.3 13.2 11.2 9.8Consumer prices, % y/y 3.8 3.4 2.8 3.0 3.4Current account, % of GDP 0.1 -3.7 -0.9 -2.5 -3.0General govt budget balance, % of GDP -7.2 -5.5 -3.0 -2.8 -3.0
  • 30. ■ China32 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSAdapting to a new normal Robust but asymmetric recovery this year The new growth target is beyond growth Corruption is no. 1 obstacle to economic reform Offshore RMB markets keep expandingLittle change to our recovery storyAs the snake has replaced the dragon as the animal of theyear in the Chinese calendar, the world’s second-largesteconomy continues to gain traction and there is littlechange to our recovery story. We are still positive onoverall growth, particularly in H1 this year, thanks topublic infrastructure investment and the rebound in prop-erty markets. These two forces have successfully liftedthe industrial sector out of contraction.During H2 this year concerns of rising prices and anoverheated property market will affect economic poli-cies. As of late February, the National Development andReform Commission raised refined oil prices and trans-portation costs, which certainly will add to headline in-flation. With manufacturers shifting production to the in-land regions and the increasing lack of skilled labour inthe country, we surely expect the double-digit wagegrowth over the last decade to continue in the comingyears, contributing to underlying inflation. Thus, thePeople’s Bank of China is very likely to hike rates, pos-sibly in Q4. Moreover the authorities do not want to en-large the economy’s reliance on investment, leading to anexit of fiscal stimulus in H2. This is the main reason whywe believe the economy will cool down towards the endof the year, resulting 2013 growth to be around 8% y/y.In 2014 recovery in the global economy will improve theoutlook for Chinese exporters. However, the real gamechanger will be household consumption, which is likelyto increase rapidly on supporting policies and changingculture. Statistics and anecdotal evidence suggest thatdiscretionary spending on recreation and travel has be-come the new black in China. In mid-February about250m people decided to spend the week-long Spring Fes-tival holiday on leisure travel, boosting domestic tourismrevenue by 15% compared to the same period last year.As the middle class is expanding fast, this only marks thebeginning of China’s consumption boom, which willcontinue in the coming decade. At the same time, we areof the conviction that investment will be pulled back onlygradually. Therefore, growth in 2014 will likely over-shoot its potential and the target of 7.5% and we expectfull-year growth to be 8.5% y/y.The future of China is of course not rosy pink withoutrisks. For the coming two years we still see the housingmarket bubble and off-balance sheet credit as factors thatcould trigger a significant slowdown. The key to avoid acollapse is close monitoring and prudent policies. En-couragingly, Beijing has already urged provinces to curbhouse price rises. We wait for more measures to be taken.New brooms sweep cleanOn the structural side, we consider corruption and in-come inequality to be serious obstacles for economic re-forms to be effective. In a recent online survey by thestate-run news agency Xinhua, 71% of the respondentspoint to corruption as China’s largest problem. Since thenew team of national leaders, headed by Xi Jinping,came into power in November last year, anti-corruptionefforts have been intensified and nearly 30 corrupted of-ficers have been disciplined. Whether it is short-lived be-cause of xin guan shang ren san ba huo (an old saying inChinese and the equivalent of new brooms sweep cleanin English) is still too early to say. At least for now sen-timent has changed. According to anecdotal evidence inthe past few months, government officials and corporateexecutives have reduced the number of lavish banquets,lucrative business trips and high-priced gifts significant-ly. During the 12th National People’s Congress in thefirst half of March, still on-going at the time of writing,we expect additional anti-corruption measures to be an-nounced, particularly with respect to the so-called nakedofficials, who are party officials living in China whiletheir wives and children reside abroad. Rumours say thatXi Jinping tries to establish an example by urging hisdaughter to stop her education at Harvard University andreturn home to China.China: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (CNYbn) 2010 2011 2012 2013E 2014EPrivate consumption 12,113 8.3 9.4 8.9 9.1 10.0Government consumption 4,569 11.0 9.7 8.7 8.7 9.0Fixed investment 15,668 11.6 9.5 8.4 9.2 8.9Stockbuilding* 778 0.5 0.2 -0.4 -0.1 0.2Exports 9,106 27.7 8.8 8.0 8.2 8.9Imports 7,603 20.1 4.8 8.4 9.8 11.0GDP 10.4 9.3 7.8 8.1 8.5Nominal GDP (CNYbn) 34,090 40,151 47,288 50,655 56,986 64,394Unemployment rate, % 4.1 4.1 4.1 4.1 4.1Consumer prices, % y/y 3.3 5.4 2.6 4.0 4.2Current account, % of GDP 4.0 2.8 2.3 2.2 1.5General government budget balance, % of GDP -1.7 -1.1 -1.6 -2.3 -1.9* Contribution to GDP growth (% points)
  • 31. ■ China33 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSMaths in China: 1 + 1 > 2One of the most asked questions about the Chinese econ-omy is whether the GDP numbers are trustworthy. Thebest answer is to quote the premier, Li Keqiang, whoonce said that the Chinese GDP was “man-made” and“unreliable”. There is a growing trend of conflictingGDP statistics between the central and local govern-ments, causing people in economic circles to treat thefigures with scepticism. In 2012 the country’s 31 prov-inces, municipalities and autonomous regions boasted atotal nominal GDP of CNY57.7tn (EUR7.1tn). This wasCNY5.8tn (or 11% of GDP) higher than the national fig-ure, released by the National Bureau of Statistics.Over-reporting of regional GDP was a long-standingproblem, because it was the only measure to evaluate lo-cal official performance on which the decision for pro-motion was based. The new growth target announced inNovember last year, aiming to double national disposableincome by 2020, has changed mentality of the provincialbureaucrats. In the past month the 31 regions have eachannounced their GDP target for 2013. 13 of them havelowered their economic ambition, and for the first timeon record no province dared to propose a higher target.By contrast, only 5 provinces cut their target in 2012 and10 actually raised it. We believe that a new normal hasemerged, so GDP is less important in determining the ac-complishments of provincial leaders. In future, lifting in-come equality and reducing pollution will be far morecrucial for local officials trying to climb the political ca-reer ladder.Renminbi going globalSince April last year when the wording two-way flexibil-ity was included in the official rhetoric regarding theChinese currency, moves in the CNY spot rate have beenvolatile by historical standards and both the upper andthe lower 1% trading band has been touched. This is nocoincidence. The CNY is still highly dictated by Beijingand the latest fluctuations indicate that words have beenfollowed by actions. The volatility will continue.Since its birth in 2010 the CNH (offshore) market hasexpanded rapidly. By December 2012, the number ofbanks in Hong Kong engaging in renminbi business hasmore than doubled and yuan-denominated deposits havegrown ten times. The Chinese currency has gained popu-larity not only with its closest neighbour but worldwide.At present 16% of all foreign trade with China is settledin CNY and more central banks begin to add yuan-denominated assets to their reserves. The renminbi inter-nationalisation will undoubtedly continue until 2016,when we expect the CNY to become a floating currency.Amy Yuan Zhuang, CFAamy.yuan.zhuang@nordea.com +45 3333 5607Growth rate around the 8% psychological lineRising gap between central and local GDPsWhat is concerning the Chinese people?0102030405060708001020304050607080%% "What is Chinas largest challenge"(Online survey by Xinhua News, November 2012)Source: Xinhua News and Nordea Markets* Food safety, expansive housing anddifficult school admissionIncreased global demand will support CNY
  • 32. ■ India34 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSThe good, the bad and the uglyUsually, India’s economic expansion moves in the samedirection as confidence in the world economy. This didnot hold in 2012 when the global outlook gradually im-proved but Indian growth continued its downward path.The gap became wider during the year, largely due to In-dia’s domestic challenges with a deteriorating economy,high inflation and mounting twin deficits.When compared to other low growth economies Indiahas a relatively tight monetary policy and has only cut in-terest rates twice since 2009, most recently in Januarythis year. This is because that even though the WPI infla-tion has eased since its double-digit era in 2010-11 andfell below 7% in January 2013, it is still far above thecentral bank’s unofficial target of 5%. Except for in 2008the RBI has never slashed rates when inflation was thishigh. For the coming two years, food prices and underly-ing wage pressure will keep inflation at an elevated level.Thus, the RBI is likely to be on hold. The governor hasreiterated that room for further monetary easing remainslimited due to concerns about inflation and twin deficits.The high twin deficits, the budget deficit has averaged5.5% of GDP (8-9% if the states are included) over thepast 15 years and current account deficit peaked at 5% ofGDP, pose an even larger challenge for India. In lateFebruary the Finance Minister Chidambaram thereforepresented a fiscal budget which aims to bring down thefiscal deficit to 4.8% in the fiscal year starting April2013. We consider the target too optimistic as it is basedon raising tax revenues and a growth rate of 6.1-6.7%.Government revenue only accounts for 17% of GDP sothere is plenty of room to raise it. However, without in-troducing tax reforms in a country where tax evasion isvery widespread, it is difficult to see how tax collectionscan be improved. No remarkable reform has beenlaunched to further attract foreign investments.Lastly, it is positive that more budget funds have been al-located to education. With a median age of 26, 13 millionpeople reach working age every year, so investing in hu-man capital is crucial for India’s future growth.Amy Yuan Zhuang, CFAamy.yuan.zhuang@nordea.com +45 3333 5607Worst economic performance since 2009Budget deficit will remain on the wrong side-8-7-6-5-4-3-2-10-8-7-6-5-4-3-2-10% of GDP% of GDPSource: Reuters Ecowin and Nordea MarketsFY12/13 and 13/14 are projected by theIndian Finance Ministry. Nordea Marketsdoes not make FY forecasts.Current account deficit at record highIndia: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (INRbn) 2010 2011 2012 2013E 2014EPrivate consumption 37,081 8.7 8.0 4.1 6.0 7.5Government consumption 7,712 5.9 8.6 4.1 5.0 4.0Fixed investment 20,558 14.0 4.4 2.5 9.0 9.8Exports 13,000 15.9 21.5 5.7 10.0 12.0Imports 16,469 9.6 9.5 7.5 12.0 14.0GDP (production approach) 9.8 7.3 5.1 5.9 6.6Nominal GDP (INRbn) 60,806 74,281 86,726 97,156 109,786 126,254Wholesale prices, % y/y 9.6 9.5 7.5 6.8 6.7Current account, % of GDP -3.2 -3.4 -4.0 -4.5 -5.0General government budget balance, % of GDP -4.0 -7.2 -5.8 -5.3 -5.5
  • 33. ■ Brazil35 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSMission: hold inflationThe Brazilian economy has finally troughed in the eco-nomic cycle, as the monthly indicators suggest growthcloser to 3% y/y now, up from below 1% last year. Weexpect growth above 3% this year. The aggressive fiscaland monetary easing over the past few years is beginningto spill over, and now even the industrial sector, whichwas hit hardest, shows signs of improvement. We foreseea further pick-up, as Brazil will benefit not only fromdomestic demand recovering but also from China’sgrowth: China’s share in Brazil’s exports has increased to17%; it is now largest export destination. This develop-ment will likely continue given the fact that Brazil is animportant resource producer, while China is one ofworld’s largest, and growing, consumers.The central bank of Brazil cut its monetary policy rate(SELIC) to 7.25% last year and indicated a “prolongedperiod” of low rates. We expect it will not last and thecentral bank will raise rates by 25 bp as early as in May,with a total of 100 bp this year. Inflation has come backwith a vengeance and will threaten the upper limit of thecentral bank’s inflation target range (6.5%). It will likelycross it in the coming months, which will prompt thecentral bank to act.The central bank tried to hold the USD/BRL within the2.00-2.10 range for most of the past year, intervening onboth sides. But this year the bank allowed the BRL tostrengthen as even Finance Minister Mantega, an avidsupporter of the “currency war”, has indicated the new“pain threshold” at lower USD/BRL levels, 1.85. Thecentral bank clearly has a bias toward more currencystrength now that inflation is close to the upper tolerancelimit. We therefore expect gradual appreciation of theBrazilian real, which is set to outperform most regionalcurrencies this year.Aurelija Augulytė, CFAaurelija.augulyte@nordea.com +45 3333 6437Recovery – at lastInflation in the comfort zone – hikes in sightBRL supported by commodities, but very volatileBrazil: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (BRLbn) 2010 2011 2012 2013E 2014EPrivate consumption 1,980 6.9 4.1 3.2 4.5 5.2Government consumption 687 4.2 2.0 3.6 3.0 2.5Gross fixed capital formation 585 21.6 4.8 -1.9 3.5 6.0Exports 356 11.5 4.5 0.7 9.0 11.0Imports 361 35.9 10.0 4.0 6.6 8.0GDP 7.6 2.7 1.5 3.5 4.2Nominal GDP (BRLbn) 3,239 3,770 4,143 4,457 4,862 5,348Unemployment rate, % 6.7 6.0 6.0 5.8 5.7Consumer prices, % y/y 5.0 6.6 5.2 5.6 5.8Current account, % of GDP -2.2 -2.1 -2.6 -2.7 -2.6General government budget balance, % of GDP -2.7 -2.6 -2.1 -2.1 -2.0
  • 34. ■ Oil36 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSOil prices creep higherOil prices are expected to remain high over the forecastperiod, as the market will remain tight by historicalstandards. Supply capacity additions are expected to out-pace demand growth this year, but a recovery in globaloil demand growth as the global economy accelerates in2014 will limit the build-up in the world’s supply capaci-ty buffer. Oil prices will likely remain volatile aroundhigh levels as risks to supply remain plentiful and de-mand grows steadily in the developing economies.Income growth, economic activity and population growthare vital drivers of oil demand. Global oil demand is ex-pected to increase at a slightly lower pace in the first halfof 2013, until a gradual increase in growth momentumlifts oil demand growth from H2 2013. Oil demand is ex-pected to increase by 0.9m b/d in 2013 and 1.35m b/d in2014, a slight upward revision from our December fore-cast following stronger-than-expected demand in 2012and a more positive outlook for the US and Japan. Non-OECD oil use will surpass the OECD’s in 2014 wherethe consumption decline will at least slow. Asia and theMiddle East lead the demand growth driven by structur-ally higher economic growth, rising incomes and grow-ing populations. Demand for transportation fuels is ex-pected to remain the primary driver of global oil use, ac-counting for around 52% of total oil demand.Global oil supply has been tighter than expected at thestart of this year, but is expected to ease in the forecastperiod. A tighter supply side is mainly due to unexpectedproduction losses in Libya, Iraq, Nigeria and the NorthSea. These losses come on top of the US/EU sanctions onIran and disruptions in Yemen, Syria, Sudan/South Su-dan. We see no near-term solution to the stringent politi-cal situation and we expect only a small resumption ofthe production in these areas. If the negotiations betweenIran and the West over Iran’s nuclear program unexpect-edly succeed, locked in barrels can hit the market andpush the oil price below our forecast. The recent boom inNorth America is anticipated to last in the forecast periodand to remain the centre of gravity of non-OPEC supplygrowth together with OPEC NGLs. Despite the formida-ble growth in US tight/shale oil, global oil supply outag-es have offset the impact on the global capacity bufferand oil prices. OPEC spare capacity was razor-thin lastyear, but we expect the situation to improve, mainlydriven by impressive growth in Iraqi oil and new projectscoming on line in Saudi Arabia. Although the oil produc-tion capacity situation looks healthier than in recentyears, we consider the risk of supply disturbances to haveincreased markedly, especially in the MENA region.Bjørnar Tonhaugenbjornar.tonhaugen@nordea.com +47 2248 7959Thina M. Saltvedtthina.margrethe.saltvedt@nordea.com +47 2248 7993Oil price forecast Brent – baseline (USD/barrel)Q1 Q2 Q3 Q4 Year2012 118 109 109 110 1122013E 113 110 113 113 1122014E 114 113 115 116 115Source: Nordea MarketsSupply grows steadily but demand acceleratesSupply disruptions have outpaced US shale growthOil price baseline, high- and low-risk scenarios
  • 35. ■ Metals37 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSSubdued price recovery as supply catches up with demandAs expected, base metals prices recovered from the re-cent lows last summer as Chinese growth momentum ac-celerated in the latter part of 2012 led by infrastructureinvestments and a recovery in the housing market. De-spite recent weakness in leading Chinese growth indica-tors and focus on cooling the property market, a recoveryin Chinese growth and metals demand is expected. Astronger outlook for the US manufacturing and housingsector will also add to metals demand growth. The sup-ply of most base metals is also expected to see solidgains this year, keeping the markets fairly balanced andthe price recovery more subdued compared to previouscycles.Our aluminium price forecast has been lowered as the in-dustry may register its seventh consecutive annual sur-plus in 2013. Demand growth is expected to recover, butthe industry’s inability to balance itself through perma-nent capacity shut-ins leaves sentiment towards alumini-um prices poor. LME prices are close to average globalcash costs, while reduced physical availability amid in-ventory financing have contributed to record-high physi-cal premiums helping producer profitability. Key to alu-minium prices is the extent of capacity additions inNorth-West China and power tariff cuts as the projectpipeline outside China remains practically dry.Copper is still expected to see a strong H1 on Chineseconstruction completions which account for half of Chi-nese demand and a rebound in underperforming sectors.Supply is improving solidly as the capex boom of recentyears finally bears fruit in 2013-15, arresting the impactfrom ageing mines and declining ore grades. Visible in-ventories have risen 80% since September 2012, illustrat-ing the return to market balance and possible surplusfrom H2 2013, which should keep prices capped. Down-side risks to copper supply expectations persist and pric-es are expected to remain firmly above the long-term in-centive price of around USD 6,500 per tonne required tobalance the market in the long term.Average nickel output costs have been reduced through alarge expansion of Chinese nickel pig iron (NPI) capaci-ty, reducing the need for refined nickel imports. Solidexpansion of also traditional nickel output is expected tokeep the market in surplus over the forecast horizon. Amajor wildcard for NPI growth and costs remains the po-tential restriction or tax raise of nickel ore exports fromIndonesia in 2014, representing an upside risk to our cau-tious forecast. The zinc market will remain in surplus inthe first part of the forecast period, but a gradual tighten-ing of the market is expected in 2014 as a number of oldmines approach the end of their life. Zinc prices are ex-pected to recover gradually towards USD 2,500/tonne.Bjørnar Tonhaugenbjornar.tonhaugen@nordea.com +47 2248 7959Base metals price forecast (USD/tonne)2012 2013E 2014EAluminium 2,018 2,088 2,325Copper 7,950 8,075 7,900Nickel 17,526 17,850 18,750Zinc 1,946 2,125 2,300Source: Nordea MarketsBase metals pricesCopper and aluminium forecastNickel and zinc forecast
  • 36. ■ Economic Research Nordea38 ECONOMIC OUTLOOK │MARCH 2013 NORDEA MARKETSSweden:Annika Winsth, Chief Economist Swedenannika.winsth@nordea.com, +46 8 614 8608Torbjörn Isaksson, Chief Analysttorbjorn.isaksson@nordea.com, +46 8 614 8859Andreas Jonsson, Senior Analystandreas.w.jonsson@nordea.com, +46 8 534 910 88Bengt Roström, Senior Analystbengt.rostrom@nordea.com, +46 8 614 8378Linus Lauri, Assistant Analystlinus.lauri@nordea.com, +46 8 614 80 03Siri Pettersson, Assistant Analystsiri.pettersson@nordea.com, +46 8 614 80 03Estonia:Tönu Palm, Chief Economist Estoniatonu.palm@nordea.com, +372 628 3345Latvia:Andris Strazds, Senior Economistandris.strazds@nordea.com, +371 67 096 096Lithuania:Zygimantas Mauricas, Chief Economist Lithuaniazygimantas.mauricas@nordea.com, +370 5 2657 198Russia:Dmitry A. Savchenko, Chief Economist Russiadmitry.savchenko@nordea.ru, +7 495 777 34 77 4194Dmitry S. Fedenkov, Analystdmitry.fedenkov@nordea.ru, +7 495 777 34 77 3368Poland:Piotr Bujak, Chief Economist Polandpiotr.bujak@nordea.com, +48 22 521 36 51Economic Research NordeaDenmark:Helge J. Pedersen, Global Chief Economisthelge.pedersen@nordea.com, +45 3333 3126Johnny Bo Jakobsen, Chief Analystjohnny.jakobsen@nordea.com, +45 3333 6178Anders Svendsen, Chief Analystanders.svendsen@nordea.com, +45 3333 3951Holger Sandte, Chief Analystholger.sandte@nordea.com, +45 3333 1191Jan Størup Nielsen, Senior Analystjan.storup.nielsen@nordea.com, +45 3333 3171Amy Yuan Zhuang, Senior Analystamy.yuan.zhuang@nordea.com, +45 3333 5607Aurelija Augulyte, Senior Analystaurelija.augulyte@nordea.com, +45 3333 6437Heidi Østergaard, Assistant Analystostergaard.heidi@nordea.com, +45 3333 6102Henrik Lorin Rasmussen, Assistant Analysthenrik.l.rasmussen@nordea.com, +45 3333 4007Daniel Freyr Gustafsson, Assistant Analystdaniel.freyr.gustafsson@nordea.com, +45 3333 5115Finland:Roger Wessman, Chief Economist Finlandroger.wessman@nordea.com, +358 9 165 59930Pasi Sorjonen, Chief Analystpasi.sorjonen@nordea.com, +358 9 1655 9942Annika Lindblad, Analystannika.lindblad@nordea.com, +358 9 1655 9940Norway:Steinar Juel, Chief Economist Norwaysteinar.juel@nordea.com, +47 2248 6130Erik Bruce, Chief Analysterik.bruce@nordea.com, +47 2248 4449Thina M. Saltvedt, Chief Analystthina.margrethe.saltvedt@nordea.com, +47 2248 7993Katrine Godding Boye, Senior Analystkatrine.godding.boye@nordea.com, +47 2248 7977Bjørnar Tonhaugen, Senior Analystbjornar.tonhaugen@nordea.com, +47 2248 7959
  • 37. Nordea 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 ASA17 Middelthuns gt.PO Box 1166 SentrumN-0107 Oslo+47 2248 5000Nordea AB (publ)10 HamngatanSE-105 71 Stockholm+46 8 614 7000Nordea Bank Finland PlcAleksis Kiven katu 9, HelsinkiFIN-00020 Nordea+358 9 1651Nordea Bank Danmark A/S3 StrandgadePO Box 850DK-0900 Copenhagen C+45 3333 3333