www.pwc.co.ukThe “New Normal” for theglobal economyAndrew SentanceSenior Economic Adviser, PwCNuffield Health SummitThursd...
The world economy continues to expandWorld GDP, US $ trillion 100                                                 93   90 ...
... but the global recovery is uneven% per annum change in GDP 10   8   6   4   2   0  -2  -4  -6       1990 1992 1994 199...
This recovery is different to 80s and 90saverage % per annum change in GDP over first three years of recovery 7 6 5 4 3 2 ...
... with Asia-Pacific now the dominant regionPercentage share of world GDP, current market prices & exchange rates 40% 35%...
UK economic growth has disappointed% per annum change in output, excluding North Sea oil and gas  8.0%  6.0%  4.0%  2.0%  ...
... while inflation has been high and volatile% per annum increase in UK consumer prices index 6.0% 5.0% 4.0% 3.0% 2.0% 1....
What is the “new normal”?• 2007/8 marked the end of a long and sustained  expansion in UK and other Western economies• Con...
A long expansion has come to an endaverage % per annum change in UK GDP and consumer spending 4.0% 3.5% 3.0% 2.5% 2.0% 1.5...
Pre-2007 growth drivers have been undermined                                Cheap                               imports   ...
Two phases of the “new normal”• Phase 1:    Disappointing western growth to continue through mid-2010s    Financial vola...
Uneven growth outlook across global economy      % per annum change in 2013 GDP                                           ...
Northern Europe is the engine of EU economy% per annum change in GDP  5  4  3  2  1  0 -1 -2 -3 -4 -5       2001         2...
UK – subdued consumers holding back growth% per annum change in UK GDP and consumer spending 5 4 3 2 1 0 -1 -2 -3 -4 -5   ...
Success drivers in the “new normal”Repositioning towards Asia/emerging marketsInnovation and exploitation of new technol...
Upcoming SlideShare
Loading in...5
×

Andrew Sentence: The "New Normal" for the global economy

553

Published on

Published in: Health & Medicine
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
553
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Andrew Sentence: The "New Normal" for the global economy

  1. 1. www.pwc.co.ukThe “New Normal” for theglobal economyAndrew SentanceSenior Economic Adviser, PwCNuffield Health SummitThursday 7th March 2013
  2. 2. The world economy continues to expandWorld GDP, US $ trillion 100 93 90 80 71 70 61 60 50 40 32 30 20 10 0 2000 2008 2012 2017 Source: IMF World Economic Outlook, October 2012The new normalPwC Slide 2
  3. 3. ... but the global recovery is uneven% per annum change in GDP 10 8 6 4 2 0 -2 -4 -6 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Asia-Pac* EU US* based on 6 largest economiesSource: IMF World Economic Outlook, October 2012The new normalPwC Slide 3
  4. 4. This recovery is different to 80s and 90saverage % per annum change in GDP over first three years of recovery 7 6 5 4 3 2 1 0 UK (exc oil&gas) Advanced economies Emerging and developing economies 1982-84 1992-94 2010-12Source: ONS, PwC and IMF. 2012 based on latest IMF and PwC forecastsThe new normalPwC Slide 4
  5. 5. ... with Asia-Pacific now the dominant regionPercentage share of world GDP, current market prices & exchange rates 40% 35% 30% 25% 20% 15% 10% 5% 0% 1980 1990 2000 2010 US EU-27 Asia-Pacific G10* * Includes Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan Province of China and Thailand. Source: IMF World Economic OutlookThe new normalPwC Slide 5
  6. 6. UK economic growth has disappointed% per annum change in output, excluding North Sea oil and gas 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Non-oil GDP Underlying* Ave GDP growth since 1970* Weighted average of manufacturing and services growthNote: Average non-oil GDP growth since mid-2009 = 1.3% Source - ONSThe new normalPwC Slide 6
  7. 7. ... while inflation has been high and volatile% per annum increase in UK consumer prices index 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Target Ave 2008-12Source: Office for National StatisticsThe new normalPwC Slide 7
  8. 8. What is the “new normal”?• 2007/8 marked the end of a long and sustained expansion in UK and other Western economies• Conditions which supported this period of growth are not set to return quickly• Prolonged structural readjustment underway in response to financial crisis and East-West rebalancing• Significant parallels with disappointing growth and volatility of the 1970s and early 1980sThe new normalPwC Slide 8
  9. 9. A long expansion has come to an endaverage % per annum change in UK GDP and consumer spending 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1948-73 1973-82 1982-2007 2007-16* GDP Consumer spending* Based on PwC forecasts for 2012/3 and Treasury Independent Consensus, 2014-16Source: ONS, PwC and HM TreasuryThe new normalPwC Slide 9
  10. 10. Pre-2007 growth drivers have been undermined Cheap imports Confidence Easy money in policy regime Sustained growthThe new normalPwC Slide 10
  11. 11. Two phases of the “new normal”• Phase 1:  Disappointing western growth to continue through mid-2010s  Financial volatility persists  High and fluctuating energy and commodity prices• Phase 2:  Clearer and more sustained growth dynamic emerges  Perhaps starting in the second half of this decade  Different set of growth drivers from pre-2007 long expansionBusinesses, policy-makers and investors need strategies tomanage and survive through Phase 1, while building potentialopportunities for Phase 2.The new normalPwC Slide 11
  12. 12. Uneven growth outlook across global economy % per annum change in 2013 GDP Russia UK Canada 1.9 Germany 1.1 3.8 Ireland 0.4 0.8 GreeceUS France -4.2 2.0 0.2 Japan Spain Italy Mexico China 1.0 -1.1 -1.2 3.6 8.0 India 6.0 Brazil Australia South Africa 3.0 2.9 2.5Source: PwC main scenario for 2013 The new normal PwC 12
  13. 13. Northern Europe is the engine of EU economy% per annum change in GDP 5 4 3 2 1 0 -1 -2 -3 -4 -5 2001 2003 2005 2007 2009 2011 2013 Germany & N Europe France & S Europe UK & IrelandSource: Eurostat and European Commission forecastsThe new normalPwC Slide 13
  14. 14. UK – subdued consumers holding back growth% per annum change in UK GDP and consumer spending 5 4 3 2 1 0 -1 -2 -3 -4 -5 97-07 ave 2008 2009 2010 2011 2012 2013 2014-16 GDP Consumer spendingSource: ONS, Nov 2012 PwC economic forecast and Treasury Independent Review of ForecastsThe new normalPwC Slide 14
  15. 15. Success drivers in the “new normal”Repositioning towards Asia/emerging marketsInnovation and exploitation of new technologyUnderstanding market/structural changeProviding strong value proposition to customersFlexible and adaptable business modelEfficient use of energy/resourcesThe new normalPwC Slide 15
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×