• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
EIU Global Forecast March 2012
 

EIU Global Forecast March 2012

on

  • 900 views

 

Statistics

Views

Total Views
900
Views on SlideShare
897
Embed Views
3

Actions

Likes
0
Downloads
7
Comments
0

1 Embed 3

http://www.linkedin.com 3

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • The euro zone is forecast to underperform the US in 2009 as it suffers from a massive drop in external demand, the impact of the global financial crisis and the unwinding of domestic imbalances. The US recovery will be driven partly by aggressive fiscal stimulus which will make itself felt from the second half of 2009 and some restocking, after the extensive drawdown of inventories in the first half 2009.
  • The euro zone is forecast to underperform the US in 2009, largely reflecting the severe weakness of Germany, which, like Japan, remains highly exposed to the global trade cycle. The US recovery will be driven partly by aggressive fiscal stimulus, which will make itself felt from the second half of 2009.
  • The euro zone is forecast to underperform the US in 2009, largely reflecting the severe weakness of Germany, which, like Japan, remains highly exposed to the global trade cycle. The US recovery will be driven partly by aggressive fiscal stimulus, which will make itself felt from the second half of 2009.
  • Although we are forecasting steady growth in oil demand in 2011-13, ample supply and capacity will prevent significant price gains. While our forecast suggests markedly lower prices in 2009-13 than in 2008, they are still relatively high in both historical and real terms.
  • Policy rates in the largest industrial economies are forecast to remain at ultra-loose levels at least until the end of 2010. Concerns not to inflate fresh bubbles will persuade the Federal Reserve (the US central bank) to start to tighten policy from 2011.

EIU Global Forecast March 2012 EIU Global Forecast March 2012 Presentation Transcript

  • Global forecasting serviceEconomic forecast summary - March 2012 Master Template 1 www.gfs.eiu.com
  • The tone of recent data has been fairlystrong. economy has been creating morejobs in recent months. We aremaintaining our 2012 GDP growth at1.8%. But if payroll tax cuts andunemployment benefits are extendedbeyond the end of February, we mayrevise upward our growth forecast.The Fed has signalled that it will keepinterest rates very low through to end of2014, but deleveraging will constrainspending. A further round of quantitativeeasing is possible if the threats ofrecession and deflation re-emerge.A large overhang of houses will preventa strong recovery in the housing market.
  • The injection of liquidity by the ECB intoeuro zone banking system has easedfunding pressures on banks andsovereigns, notably Italy and Spain.In Greece a deep recession continuesto foment social and industrial unrest.Talks on a restructuring of debt owed toprivate creditors are proving difficult.Greece has yet to satisfy the conditionsset by the EU and IMF for a second,€130bn bail-out. Unless this deal issigned, Greece will default on a€14.5bn bond repayment in March.We expect the euro zone economy tocontract by 0.7% in 2012.
  • The March 2011 earthquake and tsunamihad a severe impact on power suppliesand supply chains. Industrial productionis now recovering as infrastructure isrebuilt. The strong yen is proving aheadwind for exporters.Strong GDP growth in the third quarterwas not sustained in the fourth quarter,when the economy contracted by 2.3%q-on-q at an annualised rate.Our forecast of GDP growth of 2% in2012 is subject to downside risks giventhe loss of momentum in late 2011. From2013 we expect the economy to grow ata rate of just above 1%.
  • In response to fears of an economicdownturn, a number of EM centralbanks have cut interest rates or atleast postponed monetary tightening.EM currencies and asset marketshave rebounded since the start of theyear as risk appetite has recovered.EMs lost momentum during 2011 asdeveloped markets struggled. Weforecast a soft landing in China,despite problems in the housingmarket.Growth in 2012 will be constrained bysluggish OECD demand. EMs will stillcomfortably outperform their peers inthe developed world in 2012-16.
  • Oil consumption growth will beconstrained in 2012 by the weakOECD economic outlook. It willaverage nearly 2% year on year in2013-16, led by rising demand in thedeveloping world.The prospect of a resumption ofLibyan output in the next 1-2 yearshas improved the supply outlook.Geopolitical risk remains high,however.Prices will average around US$110as supply concerns offset thenegative impact of weaker demand.
  • Consumption growth is expected toslow in 2012, constrained by weak EUand growth and somewhat slowergrowth in the developing world.However, rising emerging marketincomes and urbanisation will underpinmedium-term demand growth.Years of underinvestment, particularlyin agriculture, will support prices.Nominal prices will remain historicallyhigh in 2012-16, but prices will easeback in real terms.
  • Faced with persistently highunemployment, the Federal Reservewill keep its policy rate atexceptionally low levels until late2014. Another round of quantitativeeasing (QE) is possible.The ECB cut rates twice in late 2011,reversing the two rate rises earlier inthe year. In 2012 we expect the ECBto cut its policy rate from 1% to0.75%.The ECB’s injection of large amountsof liquidity into the euro zone financialsystem has alleviated fundingstresses.
  • As funding stresses on euro zonebanks and sovereigns have eased, theeuro has rebounded. Having bouncedfrom a recent low of US$1.26, thesingle currency appears to beestablishing a new trading range aboveUS$1.30:€.The yen has weakened as risk appetitehas recovered. But it is likely to remainwell supported until the global economicoutlook becomes clearer.EM currencies have rebounded. Overthe medium term they will be supportedby positive growth and interest ratedifferentials with OECD economies.
  • - The global economy falls into recession 20- Oil prices remain at extremely high levels 16+ Unprecedented policy response after Greek exit prevents contagion 16- The euro zone breaks up 15- The Chinese economy crashes 15
  • - Resumption of monetary stimulus leads to new asset bubbles 12- Tensions over currency manipulation lead to protectionism 12- US dollar crashes 10- Economic upheaval leads to widespread social and political unrest 9+ Stronger than anticipated US growth boosts the global economy 8
  • Access analysis on over 200 countries worldwide with the Economist Intelligence Unit The analysis and content in our reports is d erived from our extensive econom ic, financial, political and business risk analysis of over 203 countries world wid e. You m ay gain access to this inform ation by signing up, free of charge, at www.eiu.com C lick on the country nam e to go straight to the latest analysis of that country: able from Econom ist Intelligence Unit and can be d ownl ed at www.eiu.com Further reports are avail oad G8 Countries * Canada * Germany * Japan * United Kingdom * France * Italy * Russia * United States of America BRIC Countries * Brazil * Russia * India * China CIVETS Countries * Colombia * Vietnam * Turkey * Indonesia * Egypt * South Africa O r view the list of all the countries. Should you wish to speak to a sales representative please telephone us: Am ericas: + 1 21 2 698 971 7 Asia: + 852 2585 3888 Europe, M id d le East & Africa: + 44 (0)20 7576 81 81 Master Template 13 www.gfs.eiu.com
  • Access analysis and forecasting of major industries with the Economist Intelligence Unit In ad d ition to the extensive country coverage the Econom ist Intelligence Unit provid es each m onth ind ustry and com m od ities inform ation is also available. The key ind ustry sectors we cover are l isted bel with links to m ore inform ation on each of them . ow Automotive Analysis and five-year forecast for the autom otive ind ustry throughout the world provid ing d etail on a country by country basis Commodities This service offers analysis for 25 l ing com m od ities. It d elivers price forecasts for the next two years with forecasts of factors ead influencing prices such as prod uction, consum ption and stock l evels. Analysis and forecasts are split by the two m ain com m od ity types: “Ind ustrial raw m aterials” and “Food , feed stuffs and beverages”. Consumer goods Analysis and five-year forecast for the consum er good s and retail ind ustry throughout the world provid ing d etail on a country by country basis Energy Anal ysis and five-year forecast for the energy ind ustries throughout the world provid ing d etail on a country by country basis Financial services Analysis and five-year forecast for the financial services ind ustry throughout the world provid ing d etail on a country by country basis Healthcare Anal ysis and five-year forecast for the healthcare ind ustry throughout the world provid ing d etail on a country by country basis Technology Anal ysis and five-year forecast for the technol ogy ind ustry throughout the world provid ing d etail on a country by country basis Master Template 14 www.gfs.eiu.com
  • Media Enquiries for the Economist Intelligence Unit Europe, Middle East & Africa Asia Grayling PR The Consultancy Jennifer C ole Tom Engel + 852 31 1 4 6337 / + 852 9577 71 06 Tel: + 44 (0)20 7592 7933 tengel@consultancy-pr.com.hk Sophie Kriefm an Ian Fok Tel: + 44 (0)20 7592 7924 + 852 31 1 4 6335 / + 852 9348 4484 Ravi Sunnak ifok@consultancy-pr.com.hk Tel : + 44 (0)207 592 7927 Rhond a Taylor + 852 31 1 4 6335 M obile: + 44 (0)751 5 974 786 rtaylor@consultancy-pr.com.hk Em ail allgraylingukeiu@grayling.com : Americas Australia and New Zealand Grayling New York Cape Public Relations Ivette Al eid a m Telephone: (02) 821 8 21 90 Tel: + (1 ) 91 7-302-9946 Sara C rowe Ivette.almeida@grayling.com M: 0437 1 61 91 6 sara@capepublicrelations.com Katarina Wenk-Bod enm iller Luke Roberts Tel: + (1 ) 646-284-941 7 M: 0422 855 930 Katarina.Wenk-Bodenmiller@grayling.com luke@capepublicrelations.com Master Template 15 www.gfs.eiu.com