Ekonomiska utsikter 4 sept 2013

■ Innehåll
2 EKONOMISKA UTSIKTER │SEPTEMBER 2013 NORDEA MARKETS
Vändpunkt
ÖVERSIKT 04
VÄNDPUNKT
SVERIGE 08
LJUSNING
USA 16
BRIGHT FUTURE AHEAD
EURO AREA 18
PROGRESS ON A LONG HARD ROAD
RUSSIA 25
PREPARE TO FIGHT SLOWDOWN
CHINA 29
NOT A CYCLICAL SLOWDOWN
OIL AND COMMODITIES 33
THE TRIPLE DIGIT BARREL IS HERE TO STAY
EKONOMISKA
UTSIKTER
S E P T E M B E R 2 0 1 3
Sverige tar täten i Norden
Tilltagande återhämtning
■ Den globala ekonomin står på tröskeln till en
vändning. För första gången på många år syns
tecken på stigande aktivitet i den ”gamla” industria-
liserade världen samtidigt som utvecklingen i till-
växtländerna dämpas.
■ Svensk ekonomi stärks då tillväxten breddas.
Danmark skymtar äntligen ljus i tunneln medan
Finland fortfarande saknar tillväxtmotorer.
Norge tappar ledartröjan i tillväxtligan då en het
bostadsmarknad kyls av.

■ Innehåll
3 EKONOMISKA UTSIKTER │SEPTEMBER 2013 NORDEA MARKETS
Tabellsamling
Nyckeltal.................................6
Räntor och valutor ...............7
Besök oss på:
www.nordeamarkets.com
Redaktör
Annika Winsth
Chefekonom
annika.winsth@nordea.com
Tel +46 8 614 8608
Gått till tryck
30 augusti 2013
SVERIGE
Ljusning....................................................................................................... 8
NORWAY
Higher inflation but somewhat weaker growth ..............................................10
DENMARK
Sudden thaw ...............................................................................................12
FINLAND
Down to the last card ...................................................................................14
Norden
USA
Bright future ahead......................................................................................16
EURO AREA
Progress on a long hard road.......................................................................18
GERMANY
Rebalancing towards private consumption ...................................................20
FRANCE
Some structural and cyclical progress..........................................................21
UK
Broadening recovery ...................................................................................22
JAPAN
Decision time ..............................................................................................23
Större industriländer
POLAND
On recovery path .........................................................................................24
RUSSIA
Prepare to fight slowdown ...........................................................................25
ESTONIA
Export-based (gradual) recovery in sight ......................................................26
LATVIA
Domestic demand unseats exports as key growth driver...............................27
LITHUANIA
Baltic tiger is showing its teeth ....................................................................28
CHINA
Not a cyclical slowdown...............................................................................29
INDIA
Glass half empty..........................................................................................31
BRAZIL
Gradual but bumpy recovery on track...........................................................32
Övriga länder
OIL
The Triple Digit barrel is here to stay............................................................33
METALS
Glimpse of optimism....................................................................................34
Råvaror
Reuters EcoWin, officiell nationell
statistik och egna beräkningar om
inget annat anges.
Källor:
ÖVERSIKT
Vändpunkt.................................................................................................... 4

■ Översikt
4 EKONOMISKA UTSIKTER │ SEPTEMBER 2013 NORDEA MARKETS
Vändpunkt
 USA:s tillväxt över den potentiella
 Kina en riskfaktor
 Europa på rätt väg, men det går trögt
 Sverige har passerat botten
Bättre fart, men inte utan risker
Det är nu fem år sedan Lehmankraschen. De akuta pro-
blemen är lösta och en hel del av saneringsarbetet har fal-
lit på plats. Nya regelverk håller på att tas fram för att
undvika framtida finansiella kriser, samtidigt som flera
länder har gjort strukturförändringar för att öka sin kon-
kurrenskraft. Fortfarande brottas emellertid många län-
der, inte minst inom euroområdet, med svag tillväxt eller
recession. Återhämtningen efter en finanskris tar tid och
en del av det ekonomiska tappet är förlorat för alltid. Nu
tycks emellertid vändpunkten vara på väg och vi progno-
serar en ljusare global konjunkturbild framöver.
USA är redan på god väg tillbaka och vi räknar med en
tillväxttakt på 3 procent nästa år. Det är ett gott tecken
och USA väntas därmed bli en viktig motor för världse-
konomin. Amerikanska centralbanken Federal Reserve
(Fed) har under 2013 aviserat minskade stödköp av obli-
gationer. Det är bra att Fed nu bedömer att den ameri-
kanska ekonomin är så stabil att den kan stå på egna ben.
Men riskerna med nedtrappningen kan inte negligeras.
Fed:s agerande påverkar alla finansiella marknader och
därmed tillväxten runt om i världen. På finansmark-
naderna orsakade beskedet först oro och kraftigt minskad
riskvilja. Börser runt om i världen föll i början av som-
maren. Sedan dess har Fed nyanserat bilden, vilket lett
till att riskaptiten kommit tillbaka. Räntor med längre
löptider är klart högre idag än före uttalandet. Sommaren
inleddes turbulent, men har därefter varit betydlig lug-
nare än övriga somrar efter finanskrisen 2008 och den ef-
terföljande skuldkrisen.
På lite sikt slår högre räntekostnader igenom och dämpar
konjunkturen globalt. Mindre likviditet i omlopp lär
också slå mot tillväxtländerna, vars ekonomier redan är
under press. Hur centralbankerna väljer att agera på
högre räntekostnader lär bli en viktig fråga mot slutet av
prognosperioden. Andra orosmoment är en lägre tillväxt i
Kina och oroligheter i Syrien och Egypten. Efterfrågan
på råvaror antas bli mer dämpad under de närmaste åren.
Det påverkar i sin tur prisbilden och därmed råvarupro-
ducerande länder negativt. Euroområdet står fortsatt
också för nya utmaningar där både Grekland och eventu-
ellt Portugal kan behöva ytterligare stöd, samtidigt som
banksystemet inom euroområdet kan komma under press.
På den ljusa sidan kan nämnas att ett bättre ekonomiskt
klimat globalt kan få ökad spridning och leda till en posi-
tiv spiral. USA har överraskat många gånger och flexibi-
liteten i ekonomin är en styrka. Något långsammare ned-
trappning av Fed, men också en mindre åtstramande poli-
tik i Europa skulle kunna lyfta tillväxttalen ytterligare.
Lyckas Japan med sin ambition att få fart på ekonomin
kan det också bidra till den globala tillväxten. Världstill-
växten väntas bli cirka 4,0 procent både 2014 och 2015.
BNP, procentuell förändring årstakt
2012 2013E 2014E 2015E
Världen 3,3 3,1 3,8 4,0
USA 2,8 1,7 2,9 3,2
Euroområdet -0,5 -0,5 1,0 1,5
Japan 2,0 1,6 1,3 1,0
Kina 7,8 7,5 7,3 7,0
USA – står på egna ben
En tydlig återhämtning i USA gör landet till den motor
omvärlden så väl behöver. Mycket har fallit på plats trots
åtstramande finanspolitik. Den inhemska politiska risken
har minskat betydligt. Riskerna tycks nu större utanför
landet. På hemmaplan ser det emellertid ljust ut. Efter
flera tuffa år finns ett uppdämt behov hos såväl företag
som hushåll. Högre räntor kan komma att utgöra en
broms. Samtidigt har tillgången på likviditet ökat. Hus-
hållen har goda förutsättningar att öka konsumtionen då
dess balansräkningar ser klart bättre ut. Samtidigt fortsät-
ter sysselsättningen att öka i god takt och arbetslösheten
väntas komma ned till 6 procent redan i slutet av 2014.
Ingen vet exakt hur nedtrappningen av Fed:s stödköp ska
gå till, men vi räknar med att centralbanken minskar kö-
pen redan i september och att köpen avslutas helt under
första kvartalet 2014. Därefter dröjer det ytterligare innan
Fed låter lån gå till förfall, det vill säga att de faktiskt
drar tillbaka kapital. I början av 2015 antas banken inleda
en räntehöjningscykel. Centralbankschefen, Ben Ber-
nanke, avgår i början av nästa år och vem ersättaren blir
spelar stor roll. Just nu lutar det mot vice ordförande Ja-
net Yellen, som klassas som än duvaktigare än Bernanke,
eller Larry Summers som arbetat mycket nära Obama.
Bättre fart i USA än i euroområdet och högre räntor bi-
drar till att dollarn förstärks mot euron. I slutet av pro-
gnosperioden väntas dollarkursen vara 1,20 mot euron.
Kina – viss oro
Redan i våras stod osäkerheten om styrkan i den kine-
siska ekonomin i fokus och sedan dess har farhågorna för
en svagare tillväxt ökat något. Det står allt mer klart att
den nya kinesiska politiska ledningen med Li Keqiang i
spetsen står fast vid strukturförändringar oavsett vad det
kostar i form av dämpad tillväxt på kort sikt. Överkapa-
citet och oro för en alltför generös kreditgivning ligger
bakom ledningens nya fokus. En tillväxt runt målet på
7,5 procent bedöms rimlig i närtid och ner mot 7 procent
i slutet av prognosperioden. För att undvika överhettning

■ Översikt
bromsas produktionen inte minst i statliga företag. Kapa-
citetsutnyttjandet i industrin har därmed fallit till låga 60
procent. Svagare efterfrågan från Kina medför en dämp-
ning av råvarupriserna. Kina är en stor konsument av rå-
varor. På lång sikt är det emellertid bra att Kina genom-
för strukturförändringar för att stärka ekonomin.
Euroområdet – trög återhämtning
Euroområdet fortsätter att hanka sig fram. Överraskande
stark tillväxt i såväl Tyskland som i Frankrike och en
mindre nedgång i Italien och i Spanien under andra kvar-
talet lyfte euroområdet ur recessionen. Tyskland och
möjligen Frankrike skapar optimism, men en tillväxt nå-
got bättre än förväntat förklaras till viss del av återhämt-
ningen efter en kall vinter. Den långsiktiga tillväxtför-
mågan är fortsatt låg. Den privata sektorn har fortfarande
behov av att spara och i flera av länderna är den offent-
liga sektorns skulder höga, vilket talar för fortsatt
åtstramning. Det gör att den inhemska efterfrågan är svag
inom euroområdet förutom i Tyskland där inhemsk kon-
sumtion tillsammans med ökad global efterfrågan bidrar
till tillväxten.
Arbetslösheten är oroväckande hög på många håll och
pristrycket lågt. Vårt huvudscenario är att den europeiska
centralbanken ECB ligger still med styrräntan fram till
andra halvåret 2015. Inflationen har emellertid kommit
ned och risken ökar för deflation. Det kan sätta press på
ECB att vidta ytterligare åtgärder. Skillnaderna mellan
länderna är dock stora där Tyskland spelar i en klart
högre division än flera av medelhavsländerna. Tyskland
går till val den 22 september. Sannolikt sitter Angela
Merkel kvar som förbundskansler och den politiska in-
riktningen lär därmed inte ändras nämnvärt.
BNP, procentuell förändring årstakt
2012 2013E 2014E 2015E
Sverige 0,7 1,3 2,5 2,5
Norge, fastland 3,4 2,0 2,3 2,4
Danmark -0,4 0,3 1,3 1,7
Finland -0,8 -0,5 1,5 2,3
Danmark – på rätt spår
Drygt fyra år av stagnation går mot sitt slut. Hushållens
efterfrågan är tillbaka, vilken väger tungt i dansk eko-
nomi. Mycket låg inflation, den lägsta på 40 år, och en
expansiv finanspolitik gör att reallönerna ökar samtidigt
som framtidsförväntningarna ljusnar. Bostadsmarknaden
är under fortsatt konsolidering, men i Köpenhamn ökar
priserna igen. Omsättningen är dock fortsatt låg och ut-
budet högt. Ökad global efterfrågan är positivt för expor-
ten och investeringarna väntas öka igen men från en
mycket låg nivå.
Finsk ekonomi – nära botten
Finsk ekonomi påbörjar återhämtningen, men från en låg
utgångspunkt. Det räcker inte heller för att undvika re-
cession i år och tillväxten blir måttlig även framöver. Än
så länge finns inga tydliga drivkrafter för tillväxt. Fram-
över antas dock exporten bidra positivt, medan hushållen
är fortsatt återhållsamma. Arbetslösheten är hög och för-
väntas fortsätta stiga ytterligare i år. Hushållens köpkraft
ökar mycket måttligt. Löneökningarna väntas bli låga
och flera skattehöjningar är att vänta. Trots låga räntor
väntas därmed efterfrågan på krediter vara låg och där-
med även bostadsbyggandet.
Norge – bromsar in
Norsk ekonomi bromsar in något under prognosperioden.
Framför allt är det hushållens efterfrågan som dämpats.
Lägre reallöneökningar, högre ränta, en något försämrad
arbetsmarknad samt en avkylning av bostadspriserna ta-
lar för en dämpning av privat konsumtion. Inflationstak-
ten steg överraskande mycket under sommaren. Den
högre nivån gör att Norges Bank inleder räntehöjningar-
na redan under första halvåret 2014. Oljepriset väntas
ligga stabilt och så även den norska kronan. Mer markant
fallande bostadspriser och ett klart lägre oljepris utgör de
största riskerna för norsk ekonomi.
Sverige – ökad export och valår ger god tillväxt
Svensk ekonomi har passerat vändpunkten och tillväxten
tilltar gradvis under prognosperioden. Ljusare globala ut-
sikter gör att exporten går från att vara ett sänke till att
bidra positivt till tillväxten redan under hösten. Hushålls-
sektorn utgör dock fortfarande den främsta motorn. Hus-
hållen har haft det väl förspänt en längre tid, men varit
försiktiga och ökat sparandet. I takt med att osäkerheten
om global och svensk ekonomi, samt oron för stigande
arbetslöshet minskar tilltar privat efterfrågan. Regeringen
väljer dessutom att föra en expansiv politik 2014, där en
stor del av reformutrymmet riktas mot hushållen.
Regeringens expansiva budget för 2013 och 2014 bidrar
till underskott i de offentliga finanserna på cirka 1,5 pro-
cent av BNP både i år och nästa år. Vi har haft en djup
lågkonjunktur i Sverige och mot den bakgrunden är sti-
mulanserna befogade. Tidpunkten kunde dock varit
bättre och stimulanserna hade sannolikt gjort större nytta
tidigare. För att inte tappa förtroendet för överskottsmålet
på längre sikt är det centralt att röra sig mot målet 2015.
Samtidigt som finanspolitiken är expansiv, i synnerhet
mot hushållen, oroar sig flera ledamöter i Riksbanken för
hög skuldsättning hos hushållen. Penningpolitiken är
därmed mindre expansiv än den annars kunde ha varit.
Att Finansinspektionen från och med nästa år får ökat an-
svar för finansiell stabilitet bör på lite sikt bidra till att
Riksbanken lägger mindre fokus på hushållens skuldsätt-
ning. På kort sikt ändrar det dock inte förutsättningarna
för Riksbanken. En bättre konjunktur och oro för hushål-
lens skuldsättning är skälen till att Riksbanken höjer rän-
tan i april trots att inflationen är låg. Kronan stärks mot
euron under prognosperioden, men försvagas mot dollarn
då återhämtningen i USA blir ännu mer påtaglig.
Annika Winsth
annika.winsth@nordea.com +46 614 8608

■ Översikt
Growth, % Inflation, %
2011 2012 2013E 2014E 2015E 2011 2012 2013E 2014E 2015E
World1) 4.0 3.3 3.1 3.8 4.0 World1) 5.0 4.0 3.5 3.7 3.8
USA 1.8 2.8 1.7 2.9 3.2 USA 3.1 2.1 1.6 2.1 2.3
Euro area 1.5 -0.5 -0.5 1.0 1.5 Euro area 2.7 2.5 1.4 1.3 1.7
China 9.3 7.8 7.5 7.3 7.0 China 5.4 2.6 3.0 3.5 4.0
Japan -0.6 2.0 1.6 1.3 1.0 Japan -0.3 0.0 0.2 0.8 1.3
Denmark 1.1 -0.4 0.3 1.3 1.7 Denmark 2.8 2.4 0.9 1.3 1.7
Norw ay 2.5 3.4 2.0 2.3 2.4 Norw ay 1.2 0.8 2.2 1.6 2.0
Sw eden 3.7 0.7 1.3 2.5 2.5 Sw eden 3.0 0.9 0.1 1.3 2.1
UK 1.1 0.2 1.2 1.8 2.0 UK 4.5 2.8 2.3 1.7 1.9
Germany 3.4 0.9 0.5 1.6 2.0 Germany 2.5 2.1 1.6 1.7 2.0
France 2.0 0.0 0.2 1.0 1.5 France 2.3 2.2 1.1 1.5 1.3
Italy 0.5 -2.4 -1.5 0.6 1.0 Italy 2.9 3.3 1.5 1.5 1.7
Spain 0.1 -1.6 -1.6 0.8 1.5 Spain 3.1 2.4 2.0 1.2 1.6
Finland 2.7 -0.8 -0.5 1.5 2.3 Finland 3.4 2.8 1.6 1.8 2.0
Estonia 8.3 3.2 1.9 3.6 3.7 Estonia 5.0 3.9 3.3 2.8 3.1
Poland 4.5 1.9 1.4 2.5 3.5 Poland 4.3 3.7 1.1 2.5 2.5
Russia 4.4 3.4 2.4 2.7 2.8 Russia 8.5 6.6 6.4 6.0 5.8
Latvia 5.5 5.6 3.9 4.4 3.2 Latvia 4.4 2.3 0.7 3.0 2.3
Lithuania 5.9 3.6 4.0 3.8 4.0 Lithuania 3.4 2.8 1.7 2.5 2.8
India 7.5 5.1 5.0 6.0 6.5 India 9.5 7.5 6.0 6.5 7.0
Brazil 2.8 0.9 2.0 2.7 2.6 Brazil 6.6 5.2 6.2 5.8 5.6
Rest of World 4.5 3.7 3.6 4.1 4.3 Rest of World 6.8 6.4 5.7 5.5 5.3
Public finances, % of GDP Current account, % of GDP
2011 2012 2013E 2014E 2015E 2011 2012 2013E 2014E 2015E
USA -8.4 -6.8 -3.9 -3.1 -2.4 USA -2.9 -2.7 -3.0 -3.0 -3.0
Euro area -4.1 -3.7 -2.9 -2.7 -2.5 Euro area 0.3 1.8 2.5 2.7 2.3
China -1.1 -1.6 -2.3 -2.0 -2.0 China 2.8 2.6 2.2 1.5 1.0
Japan -10.0 -10.2 -10.0 -9.5 -9.0 Japan 2.0 1.0 1.5 1.0 0.5
Denmark -2.0 -4.2 -1.4 -1.6 -2.0 Denmark 5.6 5.6 5.7 4.8 3.8
Norw ay 13.6 14.3 11.5 12.1 11.1 Norw ay 12.8 14.2 11.4 12.4 11.8
Sw eden 0.0 -0.6 -1.4 -1.4 -0.6 Sw eden 7.3 6.7 6.2 6.3 6.3
UK -7.8 -6.3 -6.5 -5.0 -3.0 UK -1.5 -3.8 -3.9 -3.5 -2.5
Germany -0.8 0.2 0.2 0.4 0.2 Germany 5.6 6.4 6.3 6.1 5.0
France -5.3 -4.9 -4.0 -3.8 -3.0 France -2.6 -1.8 -1.6 -1.7 -1.5
Italy -3.7 -2.9 -2.7 -2.3 -2.0 Italy -3.1 -0.5 1.0 1.1 1.3
Spain -9.4 -10.6 -6.5 -5.5 -4.1 Spain -3.7 -0.9 1.6 2.9 3.5
Finland -0.7 -1.8 -2.2 -2.0 -1.5 Finland -1.5 -1.8 -1.5 -1.4 -1.2
Estonia 1.2 -0.3 -0.6 -0.1 0.0 Estonia 2.1 -1.2 -0.8 -1.2 -1.3
Poland -5.0 -3.9 -4.4 -3.3 -2.9 Poland -4.8 -3.5 -0.8 -1.9 -2.5
Russia 7.0 -0.2 -0.3 -0.4 -0.4 Russia 5.4 4.3 2.5 2.0 1.7
Latvia -3.5 -1.5 -1.0 -0.5 0.0 Latvia -2.2 -1.7 -1.5 -2.2 -2.7
Lithuania -5.5 -3.0 -2.8 -2.4 -2.0 Lithuania -3.7 -0.5 -0.5 -1.5 -2.0
India -6.7 -5.5 -5.3 -5.5 -5.0 India -3.4 -5.1 -5.5 -5.3 -4.5
Brazil -2.6 -2.1 -3.3 -3.6 -3.0 Brazil -2.1 -2.6 -3.5 -3.2 -2.7
1) Weighted average of 184 countries. Weights for all countries and data for Rest of World are from the most recent World Economic Outlook, by the IM F. The weights are calculated from PPP-
adjusted GDP-levels

■ Översikt
Monetary policy rates Monetary policy rate spreads vs Euro area
30.8.13 3M 30.6.14 31.12.14 31.12.15 30.8.13 3M 30.6.14 31.12.14 31.12.15
US 0.25 0.25 0.25 0.25 1.25 US -0.25 -0.25 -0.25 -0.25 0.25
Japan 0.10 0.10 0.10 0.10 0.10 Japan1
-0.15 -0.15 -0.15 -0.15 -1.15
Euro area 0.50 0.50 0.50 0.50 1.00 Euro area - - - - -
Denmark 0.20 0.20 0.35 0.50 1.25 Denmark -0.30 -0.30 -0.15 0.00 0.25
Sw eden 1.00 1.00 1.25 1.50 2.00 Sw eden 0.50 0.50 0.75 1.00 1.00
Norw ay 1.50 1.50 1.75 1.75 2.25 Norw ay 1.00 1.00 1.25 1.25 1.25
UK 0.50 0.50 0.50 0.50 1.25 UK 0.00 0.00 0.00 0.00 0.25
Sw itzerland 0.00 0.00 0.00 0.00 0.75 Sw itzerland -0.50 -0.50 -0.50 -0.50 -0.25
Poland 2.50 2.50 2.50 3.50 4.50 Poland 2.00 2.00 2.00 3.00 3.50
Russia 8.25 8.00 7.75 7.50 7.50 Russia 7.75 7.50 7.25 7.00 6.50
China 6.00 6.00 6.00 6.50 6.50 China 5.50 5.50 5.50 6.00 5.50
India 7.25 7.00 6.75 6.75 7.00 India 6.75 6.50 6.25 6.25 6.00
Brazil 9.00 9.00 9.50 9.50 9.50 Brazil 8.50 8.50 9.00 9.00 8.50
1) Against the US
3-month rates 3-month spreads vs Euro area
30.8.13 3M 30.6.14 31.12.14 31.12.15 30.8.13 3M 30.6.14 31.12.14 31.12.15
US 0.26 0.30 0.35 0.55 1.60 US 0.04 0.10 0.05 0.20 0.60
Denmark 0.28 0.30 0.45 0.50 1.20 Denmark 0.05 0.10 0.15 0.15 0.20
Sw eden 1.22 1.25 1.60 1.85 2.35 Sw eden 1.00 1.05 1.30 1.50 1.35
Norw ay 1.71 1.70 1.95 1.96 2.45 Norw ay 1.49 1.50 1.65 1.61 1.45
UK 0.52 0.50 0.50 0.60 1.40 UK 0.29 0.30 0.20 0.25 0.40
Poland 2.71 2.75 2.80 3.75 4.70 Poland 2.49 2.55 2.50 3.40 3.70
Russia 6.80 6.75 6.55 6.45 6.50 Russia 6.58 6.55 6.25 6.10 5.50
Latvia 0.27 0.20 0.30 0.35 1.00 Latvia 0.05 0.00 0.00 0.00 0.00
Lithuania 0.40 0.50 0.50 0.35 1.00 Lithuania 0.18 0.30 0.20 0.00 0.00
10-year government benchmark yields 10-year yield spreads vs Euro area
30.8.13 3M 30.6.14 31.12.14 31.12.15 30.8.13 3M 30.6.14 31.12.14 31.12.15
US 2.77 2.55 2.90 3.25 3.90 US 0.94 0.80 0.80 0.85 1.15
Denmark 2.02 1.90 2.20 2.50 2.85 Denmark 0.18 0.15 0.10 0.10 0.10
Sw eden 2.44 2.15 2.85 3.15 3.50 Sw eden 0.61 0.40 0.75 0.75 0.75
Norw ay 2.98 2.84 3.29 3.50 3.59 Norw ay 1.15 1.09 1.19 1.10 0.84
UK 2.76 2.60 2.80 3.00 3.50 UK 0.92 0.85 0.70 0.60 0.75
Poland 4.43 4.50 4.80 5.00 5.20 Poland 2.60 2.75 2.70 2.60 2.45
Exchange rates vs SEK Exchange rates vs EUR and USD
30.8.13 3M 30.6.14 31.12.14 31.12.15 30.8.13 3M 30.6.14 31.12.14 31.12.15
EUR/SEK 8.732 8.450 8.200 8.200 8.200 EUR/USD 1.32 1.30 1.25 1.25 1.20
USD/SEK 6.594 6.525 6.560 6.560 6.833 EUR/JPY1) 130 126 131 138 132
JPY/SEK1
6.724 6.727 6.248 5.964 6.212 EUR/GBP 0.85 0.83 0.82 0.82 0.80
DKK/SEK 1.171 1.133 1.100 1.100 1.100 EUR/CHF 1.23 1.25 1.25 1.30 1.35
NOK/SEK 1.079 1.083 1.051 1.058 1.065 EUR/SEK 8.73 8.45 8.20 8.20 8.20
GBP/SEK 10.23 10.18 10.00 10.00 10.25 EUR/NOK 8.09 7.80 7.80 7.75 7.70
CHF/SEK 7.094 6.760 6.560 6.308 6.074 EUR/PLN 4.27 4.15 4.05 4.00 3.95
PLN/SEK 2.045 2.036 2.025 2.050 2.076 USD/JPY 98.1 97.0 105.0 110.0 110.0
RUB/SEK 0.198 0.198 0.200 0.201 0.210 GBP/USD 1.55 1.56 1.52 1.52 1.50
LVL/SEK 12.43 12.03 11.67 11.67 11.67 USD/CHF 0.93 0.97 1.00 1.04 1.13
LTL/SEK 2.529 2.447 2.375 2.375 2.375 USD/SEK 6.59 6.53 6.56 6.56 6.83
CNY/SEK 1.077 1.070 1.093 1.103 1.168 USD/NOK 6.11 6.02 6.24 6.20 6.42
1) Per 100 units USD/PLN 3.23 3.20 3.24 3.20 3.29
USD/CNY 6.12 6.10 6.00 5.95 5.85
USD/INR 66.6 60.0 60.0 58.0 53.0
USD/BRL 2.36 2.25 2.30 2.35 2.40

■ Sverige
Ljusning
 Tillväxten breddas när exporten vänder upp
 Valbudget gynnar hushållen
 Riksbanken höjer räntan nästa år
 Kronan stärks mot euron
Återhämtning i sikte
Svensk ekonomi har utvecklats svagt de senaste två åren.
Avmattningen var påtaglig under första halvåret i år då
BNP ökade med måttliga 1 procent jämfört med ett år ti-
digare. Orsaken är den dämpade internationella efterfrå-
gan och det turbulenta läget i Europa. Som en följd har
exporten minskat och den ökade osäkerheten har även
hämmat företagens investeringar.
Mycket tyder på att tillväxten i den svenska ekonomin är
på väg att växla upp. Den inhemska ekonomin stimuleras
av en expansiv ekonomisk politik och hushållen fortsätter
att vara den främsta tillväxtmotorn. Samtidigt sker en
vändning i exportindustrin. Offentlig konsumtion ökar
och nästa år vänder även investeringarna upp i samband
med att produktionen stiger. BNP växer därmed i god
takt, och från och med andra halvåret i år något snabbare
än den potentiella tillväxttakten. Tillväxten dämpas 2015
då stimulanserna avtar både i Sverige och internationellt.
Ljusare utsikter för exportörer
Marknadstillväxten för svensk exportindustri dämpades
markant i fjol. Efter en trög start på året faller den ytterli-
gare i år till den långsammaste tillväxten på 20 år, bort-
sett från det unika raset 2009. Den nästan två år långa
nedgången i exporten av varor bryts dock nu då efterfrå-
gan på viktiga avsättningsmarknader som Tyskland, USA
och Storbritannien stärks igen. Exporten av tjänster har
utvecklats betydligt bättre än exporten av varor och är en
allt viktigare drivkraft i ekonomin. Under de senaste 10
åren har tjänsteexporten vuxit med i genomsnitt 6 procent
per år och den väntas växa förhållandevis starkt även
kommande år.
Starka hushåll men röda siffror i statsbudgeten
De goda förutsättningarna för hushållen består. Sparandet
är högt, förmögenheten har förbättrats av stigande hus-
priser och högre börskurser. Dessutom ökar de reala in-
komsterna med i genomsnitt 2,5 procent per år 2013-
2015. Hushållens oro för konjunkturen i allmänhet och
arbetsmarknaden i synnerhet har också börjat klinga av.
Det är således upplagt för en god konsumtionsutveckling.
En bidragande orsak till hushållens inkomstökning nästa
år är sänkta skatter. I år har ofinansierade finanspolitiska
reformer på 25 miljarder kronor sjösatts, motsvarande 0,7
procent av BNP. Vi räknar med ytterligare ofinansierade
reformer i samma storleksordning valåret 2014 med mer-
parten riktade till hushållen. Medaljens baksida är att re-
formerna tynger de offentliga finanserna och orsakar ett
underskott i det finansiella sparandet motsvarande ca 1,5
procent av BNP både 2013 och 2014. Under 2015 mins-
kar underskottet då återhämtningen i ekonomin har
kommit längre. Underskotten till trots kommer den of-
fentliga sektorns skuld att ligga kvar på nära 40 procent i
förhållande till BNP samtliga prognosår.
Sverige: Makroekonomiska nyckeltal (årlig tillväxt i procent om inget annat anges)
2010 (mdkr) 2011 2012 2013E 2014E 2015E
Privat konsumtion 1 617 2,2 1,5 2,0 2,7 2,4
Offentlig konsumtion 890 1,1 0,7 1,0 1,3 0,9
Fasta bruttoinvesteringar 602 6,4 3,2 -3,3 2,8 3,6
- industri 74 11,4 7,5 -6,2 2,8 4,9
- bostadsinvesteringar 110 14,7 -8,2 0,6 4,9 3,7
Lagerinvesteringar* 23 0,5 -1,1 0,5 0,0 0,0
Export 1 651 7,1 0,8 -2,0 3,9 4,6
Import 1 445 6,3 0,0 -2,5 3,6 4,3
BNP 3 338 3,7 0,7 1,3 2,5 2,5
BNP, kalenderkorrigerad 3,7 1,1 1,3 2,6 2,3
Nominell BNP (mdr SEK) 3 338 3 500 3 562 3 638 3 783 3 942
Arbetslöshet (% av arbetskraften) 7,8 8,0 8,0 7,8 7,6
Sysselsättning 2,3 0,7 0,9 0,7 0,7
Konsumentpriser (årsgenomsnitt KPI) 3,0 0,9 0,1 1,3 2,1
Underliggande inflation (årsgenomsnitt KPIF) 1,4 1,0 1,0 1,2 1,5
Timlöner (nationalräkenskaper) 2,7 2,9 3,1 2,8 3,2
Bytesbalans (mdr SEK) 258 238 224 238 246
- % av BNP 7,3 6,7 6,2 6,3 6,3
Handelsbalans (% av BNP) 2,6 2,6 2,3 2,5 2,5
Offentligt finansiellt sparande (mdr SEK) 1 -20 -52 -53 -24
- % av BNP 0,0 -0,6 -1,4 -1,4 -0,6
Offentlig bruttoskuld, % av BNP 38,4 38,1 41,2 41,2 40,5
* Bidrag till BNP-utvecklingen, procentenheter

■ Sverige
Lägre produktivitetstillväxt
Produktiviteten har utvecklats långsamt de senaste två
åren. Det förklaras sannolikt till stor del av den dämpade
konjunkturen då en svag produktionsutveckling normalt
medför att maskinparken inte utnyttjas fullt ut. Anmärk-
ningsvärt är dock att antalet arbetade timmar har ökat
under det senaste året trots den låga BNP-tillväxten. Fak-
tisk och förväntad dämpning av löneökningstakten kan
ha bidragit till en mer arbetskraftsintensiv produktion och
även till att den långsiktiga produktivitetstillväxten har
sjunkit. Antalet sysselsatta har ökat ännu mer än antalet
arbetade timmar under de senaste två åren då frånvaron
ökat och medelarbetstiden minskat. Det medförde bland
annat att sysselsättningen steg nästan lika snabbt som
BNP under 2012, vilket är ovanligt.
De oväntade och till synes nya trenderna på arbetsmark-
naden ökar osäkerheten i prognosen. Vi räknar med att
frånvaron minskar något och att tillväxten i produktivite-
ten delvis återhämtar sig under prognosperioden, vilket
dämpar uppgången i sysselsättningen. Befolkningen i ar-
betsför ålder fortsätter att öka och arbetslösheten sjunker
därmed långsamt.
Riksbanken höjer räntan trots låg inflation
Fortsatt lediga resurser på arbetsmarknaden borgar för
dämpade löneökningar och ett måttligt inhemskt kost-
nadstryck. I kombination med den ihållande nedgången
av importpriserna innebär det att KPIF-inflationen ligger
kvar under 2-procentsmålet hela prognosperioden.
Trots låg inflation och stigande arbetslöshet har Riksban-
ken låtit reporäntan varit oförändad i år. Riksbanken
framhåller att penningpolitiken redan är expansiv och har
ögonen på hushållens skuldsättning. Då konjunkturen fö-
refaller ha bottnat och ljusglimtar skymtar även i den
globala ekonomin är ytterligare räntesänkningar inte tro-
liga. Nästa år höjer Riksbanken räntan för att bromsa
hushållens skulduppbyggnad samtidigt som det då finns
tecken på stigande resursutnyttjande. Den envist höga ar-
betslösheten och dämpade inflationen talar för att räntan
endast höjs gradvis under prognosperioden.
Kronan undervärderad mot euron
Kronan har apprecierat mot ett flertal valutor under
sommaren, dock inte mot euron. Euron har varit överras-
kande stark med tanke på det sköra ekonomiska läget i
euroområdet. Med en högre tillväxt och med förhållan-
devis stabila offentliga finanser förutspås den svenska
ekonomin bibehålla sin relativa styrka under prognospe-
rioden. Tidiga räntehöjningar från Riksbanken medför att
ränteskillnaderna mot euroområdet ökar, vilket i sin tur
talar för att kronan stärks mot euron. Däremot försvagas
kronan, liksom flera andra valutor, mot dollarn i takt med
att den amerikanska ekonomin återhämtar sig.
Torbjörn Isaksson
torbjorn.isaksson@nordea.com +46 614 8859
Återhämtning av exporten
Viss förbättring i näringslivets produktivitet
Arbetslösheten sjunker långsamt
KPIF-inflationen parkerar under målet

■ Norway
Higher inflation but somewhat weaker growth
 Uptick in inflation earlier than expected
 But growth outlook somewhat weaker
 Tentative rate hikes from 2014
The biggest surprise since our June forecast is the sharp
uptick in core inflation. We have therefore revised up our
2013 and 2014 inflation forecasts. This could result in a
rate hike in H1 2014, somewhat sooner than forecasted in
June.
The growth outlook has dimmed somewhat, though.
Mainland GDP for Q2 was significantly lower than ex-
pected and weaknesses in the housing market have be-
come more evident. We have revised down our 2013 and
2014 growth forecasts somewhat, mainly as a conse-
quence of weaker growth in household demand. In 2015,
which is included in our forecast for the first time, we
look for a more expansionary fiscal policy that will help
drive growth slightly higher. Mainland GDP is projected
to grow by 2-2 ½% in 2014 and 2015.
Less impetus from consumers
Consumer spending disappointed in Q2 after very strong
growth in Q1. We believe that the underlying trend in
consumer spending is still positive and expect growth to
accelerate somewhat again in the autumn. Next year con-
sumer growth is expected to be somewhat lower due to
significantly lower real wage growth and slightly higher
interest rates. A somewhat weaker labour market and a
cooler housing market could also curb consumers’ pro-
pensity to spend. The same trend of moderate consumer
spending growth is likely to continue in 2015.
This summer house price trends were somewhat weaker
than expected and we now look for a slight decline in
prices in the autumn. Tighter bank credit standards and a
high price level are probably the main reasons for the
slowdown. We expect the moderate decline to continue
throughout 2014 and 2015, resulting in an average price
drop of 2-3% both years. This year price growth is esti-
mated at roughly 4%. The subdued housing market will
lead to lower residential construction and investment in
residential construction will reverse from a strong in-
crease to having a moderately negative effect on GDP
growth in 2014 and 2015.
But business investment will rebound
While consumer spending disappointed in Q2, mainland
business investment rose quite sharply after some weak
quarters. Investment activity is at relatively low levels
both in the service sector and in the manufacturing indus-
try, suggesting that business investment will increase ad-
ditionally given the moderate growth in activity in the
overall economy.
For oil investment the picture is the opposite. Investment
growth is currently sky-high, but oil companies’ plans for
2014 indicate considerably lower growth next year. In
2015 growth will likely decline further, but the picture is
very uncertain this far into the future. If, for example, oil
prices decline, oil investment trends in 2015 could be
much weaker.
The momentum to the Norwegian manufacturing indus-
try from domestic and international oil investments will
abate. This may to some degree be offset by an expected
upturn in Norway’s traditional export markets. But given
the high cost level, Norway will not be able to benefit
fully from this upturn.
Norway: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010(NOKbn) 2011 2012 2013E 2014E 2015E
Private consumption 1,132 2.5 3.0 2.6 2.4 2.5
Government consumption 591 1.8 1.8 2.3 2.5 3.0
Fixed investment 537 7.6 8.0 5.7 1.6 2.0
- gross investment, mainland 383 8.5 3.7 2.7 0.5 1.5
- gross investment, oil 141 9.8 19.1 13.0 4.0 3.0
Stockbuilding* 126 0.1 -0.2 -0.8 0.3 0.0
Exports 1,141 -1.8 1.8 -1.4 1.7 1.0
- crude oil and natural gas 562 -6.2 0.9 -4.5 2.0 0.0
- other goods 316 0.0 2.6 1.2 1.5 2.0
Imports 776 3.8 2.4 1.0 2.5 2.4
GDP 2,750 1.2 3.1 1.2 2.2 1.9
GDP, mainland 2,090 2.5 3.4 2.0 2.3 2.4
Unemployment rate, % 3.3 3.2 3.6 3.8 3.9
Consumer prices, % y/y 1.2 0.8 2.2 1.6 2.0
Core inflation, % y/y 0.9 1.2 1.6 1.8 2.0
Annual w ages, % y/y 4.2 4.0 3.6 3.7 3.5
Current account (NOKbn) 351.0 413.2 335.7 391.6 388.9
- % of GDP 12.8 14.2 11.4 12.4 11.8
Trade balance, % of GDP 13.3 13.2 10.5 11.5 10.9
General govt budget balance (NOKbn) 373.6 417.7 340.0 380.0 365.0
- % of GDP 13.6 14.3 11.5 12.1 11.1
* Contribution to GDP growth (% points)

■ Norway
Expansionary fiscal policy in 2015
Waning growth in oil investment and consumer demand
in the mainland economy suggests that growth will be
relatively moderate going forward. Moreover, we expect
immigration to remain relatively high in net terms, which
means that unemployment could increase somewhat.
With decelerating growth and slightly higher unemploy-
ment, we expect fiscal policy to turn more expansionary
regardless of who wins the next election. The spending
rule for oil revenues will not be a hindrance since oil rev-
enue spending is well below the limit. Notably in 2015
growth in public spending and investment could be high.
Higher but stable inflation
A presumably more expansionary fiscal policy will curb
the decline in employment growth and make the uptick in
unemployment more moderate. Wage growth is estimat-
ed to remain just under 4% and core inflation should be
roughly 2%. We assume that the NOK will remain rea-
sonably stable so that growth in price on imported goods
will pick up further. Rent increases, which account for
nearly 20% of inflation, have accelerated sharply this
year. We expect that growth in rents will remain relative-
ly high as existing rents are gradually revised up in step
with the sharp increase in new rents.
Slightly earlier rate hike
Inflation rising earlier than expected suggests that Norges
Bank will bring its first rate hike forward to H1 2014.
Slowing growth and somewhat higher unemployment in-
dicate that interest rates will be raised very cautiously.
International interest rate movements will to a large ex-
tent determine interest rate levels also in Norway. In H2
2014 markets are expected to price in higher interest
rates internationally, and during 2015 policy rates are
projected to be hiked in both the US and the Euro area.
This will likely be one of the factors prompting further
rate hikes from Norges Bank.
Stable EUR/NOK over time
The NOK took a dive in June when Norges Bank sig-
nalled a high probability of a rate cut in September. The
NOK weakening and higher inflation suggest that the
policy rate is left unchanged and that Norges Bank will
revise up its interest rate path. This should boost the
NOK to some degree. Subsequently, EUR/NOK is ex-
pected to remain relatively stable. Oil prices will move
sideways, and even in case of an earlier Norwegian poli-
cy rate hike than in the Euro area, the expected interest
rate differential, measured for instance by 2-year swap
rates, will not change much. Changes in this interest rate
differential usually have a large impact on the EUR/NOK
performance.
Erik Bruce
erik.bruce@nordea.com +47 2248 4449
Katrine Godding Boye
katrine.boye@nordea.com +47 2248 7977
Weaker housing market
Low business investment – practically everywhere
Is retail price growth about to give in?
A rather weak NOK

■ Denmark
Sudden thaw
 Consumers waking up
 Tentative improvement in fragile housing market
 Risk of jobless upswing
 Investment knot unravelling
After more than four years of zero growth, a thaw is un-
derway in the Danish economy. The harbinger of this can
mainly be seen in the household sector where the combi-
nation of higher disposable incomes and growing opti-
mism paves the way for increased consumption. At the
same time we see good chances of consumer spending
growth being accompanied by an upturn in investment
activity and higher exports in step with rising activity in
key export markets.
Viewed in this light we reiterate our forecast of accelerat-
ing growth in the Danish economy in the years ahead –
more specifically a growth rate of 0.3% this year, rising
to 1.3% next year and 1.7% in 2015.
Consumers waking up
Since the crisis really took hold in late 2008, household
consumption has been stagnant. As it makes up about
50% of GDP, this is a crucial reason for recent years’ ze-
ro growth in the Danish economy. However, recent
months’ data for consumer confidence and Dankort debit
card sales indicate a renewed increase in activity among
Danish households. The reasons are higher disposable
incomes thanks to tax cuts and positive real wage growth
as well as households’ stronger confidence in the eco-
nomic outlook. Coupled with a positive trend in house-
hold wealth, the higher disposable incomes and growing
optimism mean that consumer spending will once again
become the main driver of economic growth.
The higher consumer spending will also cause imports to
accelerate and viewed in isolation this will put downward
pressure on the currently very substantial current account
surplus. However, this pressure will partly be offset by a
renewed uptick in exports as the economic upswing gath-
ers momentum in key export markets such as Sweden,
Germany, the UK and the US.
Upswing aided by low inflation
During the summer the year-on-year rate of increase in
Danish consumer prices has fallen to a 40-year low. The
declining rate of inflation is due to several factors coin-
ciding: energy prices have stagnated, lower taxes and du-
ties have curbed increases in food prices and weak de-
mand and low wage growth have made it tougher for
businesses to pass price increases on to consumers. The
low inflation is definitely good news for the Danish
economy; in addition to ensuring positive real wage
growth, it also helps boost Denmark’s competitiveness.
Risk of jobless upswing
The paradox in the Danish labour market is growing in-
creasingly larger. For quite some time unemployment has
been falling in gross terms, although growth in the Dan-
ish economy has been below the level that is normally
required for a stable number of unemployed. The devia-
tions in employment and unemployment indicate a sig-
nificant outflux from the labour market that artificially
drives unemployment lower.
Given the contracting labour force it is currently very dif-
ficult to assess how much damage the long period of fall-
ing employment and low number of vacancies has done
Denmark: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (DKKbn) 2011 2012 2013E 2014E 2015E
Private consumption 858 -0.5 0.5 0.7 1.4 2.0
Government consumption 510 -1.5 0.7 0.2 0.5 0.7
Fixed investment 300 2.9 -0.1 -0.2 3.6 1.4
- government investment 38 4.2 10.7 -9.4 5.4 -7.9
- residential investment 71 14.6 -8.6 -4.5 2.0 3.8
- business fixed investment 191 -1.6 1.2 3.4 3.8 2.4
Stockbuilding* -5 0.5 -0.4 0.5 0.0 0.0
Exports 887 6.5 0.2 -0.2 2.5 3.7
Imports 789 5.6 1.0 1.0 3.0 3.9
GDP 1.1 -0.4 0.3 1.3 1.7
Nominal GDP (DKKbn) 1,761 1,792 1,824 1,845 1,893 1,959
Gross unemployment level, '000 persons 159.7 161.8 155.2 156.3 153.0
Hourly earnings, % y/y -2.8 1.5 1.5 1.7 1.9
Nominal house prices, one-family, % y/y -2.8 -3.2 2.2 2.4 2.9
Current account (DKKbn) 101.2 101.6 105.4 90.0 75.0
- % of GDP 5.6 5.6 5.7 4.8 3.8
General govt. budget balance (DKKbn) -34.9 -77.5 -25.0 -31.0 -40.0
- % of GDP -2.0 -4.2 -1.4 -1.6 -2.0
Gross public debt, % of GDP 46.4 45.6 44.1 43.8 44.4

■ Denmark
to the Danish labour market. And in turn it is also very
difficult to assess the current scope for fiscal policy ac-
tion in the Danish economy. Given this uncertainty, the
growing signs of improvement in consumer spending and
the risk of loss of credibility in the financial markets, we
still believe that fiscal policy should not be eased further
at this point. Not even although we do not expect em-
ployment to rise until mid-2014.
Tentative improvement in fragile housing market
The housing market is still undergoing the necessary
consolidation following recent years’ price plunge. Nota-
bly in the greater Copenhagen area this has resulted in
price increases, led by the market for owner-occupied
flats. The rising prices give reason to hope that this posi-
tive trend will gradually spread to other parts of the coun-
try. A trend that is supported by continued very low
mortgage rates, a historically low increase in new homes
for sale and prospects of labour market stabilisation.
However, the risk of a new setback still lurks beneath the
surface. The rising prices are thus based on a very low
turnover and the number of unsold homes is very high
(both homes currently for sale and homes expected to be
put on the market when prices begin to rise). We there-
fore expect nominal housing prices measured by the na-
tional average rate to increase moderately in the coming
years. However, we will still see major geographical dif-
ferences. Improvements will mainly be concentrated in
demographically growing areas of the country that sup-
port stronger demand.
Investment knot unravelling
Despite historically low interest rates and the opening of
a temporary tax window, business investment activity
has stagnated at a very low level. This poses a major
problem, as it leaves a vacuum in demand and reduces
future growth opportunities. However, going forward we
see good chances of business investment shifting into a
higher gear. Until the turn of the year this growth will
chiefly be driven by activity brought forward before the
investment window closes. In 2014 we expect the up-
trend in investment activity to continue as a result of the
low interest rates, growing demand and a large pent-up
need. The prospect of higher investment activity is also
supported by a renewed increase in business loan demand
concurrently with the banks no longer tightening their
credit standards. However, it should be pointed out that
Danish investments are often made outside rather than
inside the country owing to the high domestic cost level
– a trend that has been evident over several years by now.
Helge J. Pedersen
helge.pedersen@nordea.com +45 3333 3126
Jan Størup Nielsen
jan.storup.nielsen@nordea.com +45 3333 3171
Growth returns
Prospect of rising household consumption
Slow labour market reversal
Investment overhang

■ Finland
Finland: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (EURbn) 2011 2012 2013E 2014E 2015E
Private consumption 99 2.6 0.2 0.4 1.1 1.8
Government consumption 44 0.5 0.6 0.5 0.5 0.5
Stockbuilding* -1 1.5 -1.3 -0.2 0.2 0.0
Exports 72 2.7 -0.2 -1.4 3.9 5.8
Imports 70 6.2 -1.0 -2.1 3.8 5.5
GDP 2.7 -0.8 -0.5 1.5 2.3
Nominal GDP (EURbn) 178.7 188.7 192.5 197.3 203.1 211.3
Industrial production (output), % y/y 3.8 -2.1 -5.0 2.0 4.0
Hourly w ages, % y/y 2.7 3.2 2.0 1.6 1.5
Current account (EURbn) -2.7 -3.6 -2.9 -2.8 -2.6
- % of GDP -1.5 -1.8 -1.5 -1.4 -1.2
Trade balance (EURbn) -1.3 0.1 0.8 0.7 1.0
- % of GDP -0.7 0.1 0.4 0.4 0.5
General govt budget balance (EURbn) -1.3 -3.4 -4.3 -4.1 -3.2
- % of GDP -0.7 -1.8 -2.2 -2.0 -1.5
Gross public debt (EURbn) 92.8 103.1 111.2 119.2 126.3
- % of GDP 49.2 53.6 56.4 58.7 59.8
Down to the last card
 GDP in 2015 will still be below the 2007 level
 Economic recovery depends entirely on exports
 Employment will continue to weaken
 Households will remain cautious
GDP in 2015 will still be below the 2007 level
The Finnish economy began to grow moderately in H1
2013. Initially, recovery will be very slow, gaining
momentum in 2014 and 2015 as international demand
recovers. The economic recovery will also be slower this
year than the decline that preceded it, which continued
for most of 2012. In light of this information, we
estimate overall production to shrink by 0.5% this year,
but to hit a growth figure of 1.5% in 2014 and 2.3% in
2015 due to an increase in exports. The growth forecasts
for 2013 and 2014 have been maintained.
The losses in overall production suffered in recent years
have been enormous. Under our forecast scenario, real
GDP in 2015 will still be slightly lower than what it was
in 2007, for example.
Widespread weakness
With overall production on a slight upward track, the
perception of current economic activity may be too
positive, as no clear-cut engine for growth has emerged
yet. The latest foreign trade figures indicate that both
exports and imports are still declining. Exports are
decreasing at a slower rate than imports, so technically
foreign trade should accelerate growth. Weak import
figures, on the other hand, signal that domestic demand
(especially private consumption and investment) has
remained lacklustre and, with production shrinking,
companies need less and less intermediate products.
Domestic production is hamstrung by the difficulties of
the manufacturing, retail and construction sectors. There
is no quick fix on the horizon, as new orders for the
manufacturing industry are still meagre. The lack of
economic growth will keep the employment rate low –
and unemployment high – well into next year, putting a
damper on growth in households' purchasing power.
Economic recovery depends entirely on exports
The economic data on Finland is mostly grim, with
hardly any bright spots. But we may be experiencing the
darkest hour just before dawn, as recent developments in
the global economy and a number of leading indicators
point to more positive forecasts for exports.
The outlook for the global economy as a whole is
brighter for a change. The OECD's leading indicator and
the global purchasing managers' index have been
forecasting a moderate recovery in the world economy
and global trade for a while. Now these forecasts are
finally gaining traction. Economic activity has clearly
started to pick up in markets that are important for
Finland, such as the United States, the euro area, Sweden
and the United Kingdom. We believe that strengthening
international demand will put exports on an upward track
towards the end of this year. Initially, however, the
recovery will be limited by a slowdown in Russia's
economic growth and the considerable proportion of
investment goods in exports. Investment across the globe
will only start to recover once old capacity is being
utilised sufficiently. How big a slice the Finnish export
industry will gain from increased global demand will
eventually be determined by its competitiveness.
The trade balance will remain in a mild surplus, as weak
domestic demand continues to slow down the import of
goods. The current account remains in a deficit becauseof
deficits in the trade in services and income transfers.

■ Finland
Employment will weaken further
The economic recession will weaken employment with a
lag. We expect the labour market to continue to
deteriorate, and the unemployment rate, adjusted for
seasonal changes, to rise to 8.5% at the end of this year.
Unemployment will remain high well into 2014 before
brisker activity begins to increase labour demand again.
The official statistics are confounding, as they indicate a
steep decline in the number of unemployed, the labour
force and the unemployment rate in June and July. We
believe this to be more of a case of a temporary drop due
to higher-than-normal fluctuation in the labour force
survey than a permanent exit of the unemployed from the
labour market. Observations in the coming months are
likely to show a rising unemployment rate once again.
Households will remain cautious
Households' purchasing power will hardly improve this
year and next, as its rise is hampered by several factors.
Employment will deteriorate further. In order to improve
the competitiveness of Finnish companies, the collective
bargaining negotiations this autumn are expected to
result in very low wage increases over several years,
which will prevent incomes from rising much. Coupled
with modest inflation, this will also slow down the rise in
pensions in the near future. Tax hikes on income and
consumption are also on the agenda. Preliminary
decisions by the authorities indicate that income tax
brackets will not be adjusted for inflation next year. In
addition, many municipalities are expected to raise their
tax rate. Commodity taxes will be selectively raised.
The lack of improvement in purchasing power will keep
households cautious and growth in private consumption
slow. This cautiousness will most likely also curb
households' debt appetite and the volume of housing
transactions despite the fact that interest rates are
estimated to remain exceptionally low.
In H1 this year, the number of housing transactions
declined by more than 10% compared to the previous
year, partly due to higher taxes on such transactions, and
there has been no reversal in this trend yet. New housing
loans drawn down by households were similarly on a
decline of more than 20%.
Household cautiousness will keep construction
companies on their toes and construction project start-ups
below average for the time being. The shortage in the
supply of new residences will compensate for weak
demand, stabilising prices at a rise parallel to the increase
in households' disposable income.
Pasi Sorjonen
pasi.sorjonen@nordea.com +358 9 165 59942
There are early signs of a recovery
Euro area PMI suggests a pick-up in manufacturing
Export volumes lack symptoms of recovery
The fall in unemployment is temporary

■ USA
USA: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (USDbn) 2011 2012 2013E 2014E 2015E
Private consumption 10,201.9 2.5 2.2 2.0 2.8 2.9
Government consumption and investment 3,174.0 -3.2 -1.0 -2.4 -0.7 -0.2
Private fixed investment 2,039.3 6.2 8.3 4.7 7.8 8.0
- residential investment 381.1 0.5 12.9 13.3 12.4 12.6
- equipment and softw are 731.8 12.7 7.6 3.7 7.5 7.4
- non-residential structures 362.0 2.1 12.7 0.7 7.3 7.2
- intellectual property products 564.4 4.4 3.4 3.0 5.0 5.7
Stockbuilding* 61.5 -0.2 0.2 0.0 0.0 0.0
Exports 1,843.5 7.1 3.5 2.5 5.2 5.5
Imports 2,362.0 4.9 2.2 1.6 4.8 5.3
GDP 1.8 2.8 1.7 2.9 3.2
Nominal GDP (USDbn) 14,958.3 15,533.8 16,244.6 16,764.1 17,545.4 18,465.6
Industrial production, % y/y 3.4 3.6 2.5 3.5 3.8
Consumer prices ex. energy and food, % y/y 1.7 2.1 1.8 2.2 2.4
Hourly earnings, % y/y 2.0 1.9 2.0 2.5 2.8
Current account (USDbn) -457.7 -440.4 -502.9 -526.4 -554.0
- % of GDP -2.9 -2.7 -3.0 -3.0 -3.0
Federal budget balance (USDbn) -1,295.6 -1,087.0 -650.0 -550.0 -450.0
- % of GDP -8.4 -6.8 -3.9 -3.1 -2.4
Bright future ahead
 Expect stronger growth despite fiscal tightening
 The US consumer is back – deleveraging is over
 Higher inflation pressures in 2014 and 2015
 First Fed rate hike in early 2015
US data releases over the summer have made us even
more confident in our optimistic economic outlook for
the US. Thus, the stronger-than-expected 2.5% GDP
growth rate in Q2 was the fastest pace in three quarters.
The fact that the recovery has gained momentum despite
sequester-related government spending cuts, higher taxes
for high-income earners and the expiration of the payroll
tax holiday suggests the economy should accelerate later
this year as the drag from fiscal tightening fades.
However, downward revisions to GDP over the past
quarters arithmetically necessitate reducing our overall
2013 growth forecast by 20 bp to 1.7% even though we
still expect 2½-3% growth in H2 2013.
In 2014 and 2015 fiscal policy will continue to act as a
drag on growth, but less so than in 2013. Moreover,
thanks to improved fundamentals in the private sector we
expect the recovery to gain even more pace over the next
few years as pent-up demand is released, especially in the
form of business investment but also stronger consumer
spending. GDP growth is therefore projected to strength-
en to 2.9% and 3.2% in 2014 and 2015, respectively.
We are not concerned that the likely upcoming scaling
back and subsequent termination of the Fed’s asset pur-
chases (QE) will harm the economy excessively. First,
the Fed has clearly communicated that it is only going to
start tapering its purchases if a stronger economy does
not require such further support. Second, even when the
Fed ceases to expand its balance sheet, US banks will
remain flush with liquidity, already added to the banking
system by the Fed in the form of excess reserves.
Finally, rising mortgage rates as imminent QE tapering
has been priced into the market should not derail the
housing recovery. All else equal, higher mortgage rates
will obviously act as a drag on growth. Thus for a mort-
gage on a median-priced single-family home (around
USD 200,000) with a 20% down payment, the recent rise
in mortgage rates represents an increase in the monthly
mortgage payment of about 3% of median family in-
come. However, in the current environment this negative
impact is likely to be at least partly offset by increased
incentives for banks to lend because recently rising home
prices and employment imply a lower risk that mortgages
turn delinquent. Moreover, because of earlier postponed
housing demand we see potential for pent-up demand to
be released before rates and prices rise even further.
The US consumer is back
In the absence of new shocks, we believe that the US is
facing a strong cyclical recovery over the next few years
compared to all other major advanced economies. The
main reason is that private-sector deleveraging seems to
be over. Households’ debt-to-disposable income ratio has
fallen to a decade low and along with still very low inter-
est rates the sharp debt reduction has reduced the debt-
service ratio to the lowest level since records started in
1980.
National homes price are expected to rise around 5% an-
nually over the next two years following the 10%+ pace
observed over the past year. Rising home prices, coupled
with gains in stock prices, low interest rates, an improv

■ USA
ing labour market and continued easing of banks’ lending
conditions are expected to lead to stronger consumption
growth going forward.
Moreover, with a very high level of corporate profit mar-
gins, stronger global growth, improved competitiveness,
partly due to a weak USD, easier credit conditions and
reduced uncertainty as the nightmares of the Great Re-
cession and Washington politics fade, the prospects for
business investments are also quite bright.
In addition, household formation growth suggests that
housing starts could double over the next few years,
reaching an annual pace around 2 million units.
First Fed rate hike in early 2015
Very encouragingly, the job market is clearly improving.
We expect employment growth to average 200,000 per
month in H2 2013, roughly in line with the trend so far
this year, and around 225,000 per month in 2014 and
2015. With an assumed steady labour force participation
rate, unemployment is forecast to reach 7% by end-2013,
6% by end-2014 and 5.2% by end-2015.
The Fed is expected to start reducing its monthly bond
purchases in September this year, with QE ending in Q1
2014. Given the Fed’s numerical rate guidance, the first
rate hike is expected in early 2015, and by end-2015 the
fed funds rate is projected at 1.25%. Fed Vice Chairman
Janet Yellen is our favourite to replace Bernanke as Fed
chairman in early 2014.
With full employment expected to be reached by late
2014 or so, signs of stronger inflation pressures are pro-
jected to emerge in the latter part of the forecast horizon.
Fiscal risks back in focus in H2 2013
In addition to continued global downside risks to the US
outlook, US fiscal risks are still a concern.
The debt ceiling is clearly the most important fiscal issue
in H2 2013. In case of no agreement to raise the debt
ceiling, the US government defaults. The final deadline
for raising the debt ceiling is most likely in October or
early November. Moreover, to avoid a partial govern-
ment shutdown Congress will have to pass a temporary
funding measure before the current authority expires on
30 September. The reason is that Congress – once again
– seems unlikely to pass a budget before the new fiscal
year starts on 1 October.
However, because fighting over the debt ceiling has
proven to be a popularity-losing effort, our expectation
continues to be that Congress will solve these fiscal is-
sues with relatively little drama this time. Any impact on
the economy is believed to be minimal.
Johnny Bo Jakobsen
johnny.jakobsen@nordea.com +45 3333 6178
Fiscal drag on growth expected to fade
The US consumer is back
Housing recovery has only just begun
Job market improvement expected to continue

■ Euro area
Progress on a long hard road
 Recession is over, the crisis is not
 Contraction in the periphery easing
 The policy response has changed just a bit
 ECB on hold, but low barrier for more easing
The good news about the Euro area is that the recession
seems to be over. The bad news is that the crisis is not
over and that conditions for strong growth in output or
employment are not yet in place. The recovery should
gradually gain some strength over time but it remains
vulnerable to shocks and will need support from a very
lenient monetary policy for a long time.
After six consecutive quarters of declining output, GDP
increased by 0.3% over the quarter in Q2. That was driv-
en by growth in Germany and France but also by Italy
and Spain contracting less than before. Construction
probably picked up, to a large part due to a catch-up ef-
fect after a long winter. Private consumption probably al-
so rose. Many sentiment indicators are compatible with
slow growth going forward, but catch-up effects should
have run out by now.
As GDP increased earlier this year than we expected, we
revised up our growth forecast for this year to -0.5%
from -0.8%. Actually, we are almost back to our March
forecast (-0.4%). We still expect around 1% for next
year, mainly driven by domestic demand. Our first glance
into 2015 assumes a further healing from the crisis with
growth strengthening to 1.5%. We expect the drivers for
that to be a less restrictive fiscal policy, further progress
on deleveraging and structural reforms and a slightly
weaker euro supporting exports.
Improvement on the financial side …
In our view, the relative calm in financial markets in re-
cent months contributed to the stabilisation of the econ-
omy. Marked declines of peripheral countries’ bond yield
spreads over German Bunds yields more than compen-
sated the 50 bp increase of 10Y Bund yields this year.
Moreover, although banks still tightened lending stand-
ards in Q2, they did not do so more than in Q1. So all in
all, there is improvement on the financial side that should
support growth going forward.
… but deleveraging still an impediment to growth
In contrast to the US, private sector deleveraging is not
over. Consequently, private households will remain re-
luctant to consume more – given very high unemploy-
ment and falling house prices in several countries – and
companies will remain reluctant to take on more debt to
finance investment. At the same, public debt is still on an
unsustainable path in several Euro-area countries. There-
fore, there still is a need for growth-enhancing structural
reforms and at the same time for restrictive fiscal policy.
However, in our view, tax increases and spending cuts
will be less of a drag on growth next year than this year –
which is good news.
Political risks and event risks not gone
Political stability is especially important for countries
that have to implement painful reforms over several
years. The risks to stability have not gone. Several gov-
ernments – for example those in Italy, Portugal and
Greece – look shaky and may fall. Greece may also need
more help with its public debt in one way or another.
And whether Portugal will be able to return to bond mar-
kets next year remains to be seen. Small countries can
cause irritation on financial markets. But they can proba-
bly not derail the Euro-area recovery if crisis manage-
ment by the ECB, European governments, the IMF and
the European Commission contains the damage – which
we expect to happen.
The policy response has changed just a bit …
The economic policy response seems to have changed
just a bit this year. Austerity, structural reforms and a
central bank not doing more than is absolutely needed is
still the mantra, but some countries have been allowed a
slower pace of budget deficit reduction and the ECB has
gone further than most would have expected to help the
economy back on a sustainable growth path.
Euro area: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (EURbn) 2011 2012 2013E 2014E 2015E
Private consumption 5,272 0.2 -1.3 -0.5 0.5 0.7
Government consumption 2,017 -0.1 -0.4 0.0 0.2 0.3
Fixed investments 1,740 1.5 -4.2 -2.5 3.5 4.5
Exports 3,769 6.5 2.9 1.0 4.0 5.0
Imports 3,648 4.3 -0.7 1.2 3.8 4.8
Net exports* 121 0.9 1.5 0.0 0.3 0.2
GDP 1.5 -0.5 -0.5 1.0 1.5
Nominal GDP, EUR bn 9,425 9,490 9,674 9,761 9,986 10,309
Current account, % of GDP 0.3 1.8 2.5 2.7 2.3
General government budget balance, % of GDP -4.1 -3.7 -2.9 -2.7 -2.5
General government gross debt, % of GDP 88.0 92.7 95.5 96.0 96.5

■ Euro area
What has changed? The significant drop in core inflation
during the early part of the year could be seen as a sign
that there is more slack in the economy than policy mak-
ers previously assumed. Estimates about the degree of
slack in the economy – the output gap – differ widely,
ranging from around 1% when using a simple trend mod-
el to 4% as estimated by the OECD. It is very difficult to
know what the structural rate of unemployment actually
is when unemployment rates differ hugely, from above
25% in Spain to a 25-year low of 6.8% in Germany. Still,
if the recent decline in price pressures is interpreted as a
sign of a slightly higher output gap, say about 2%, it
would explain why the economic policy response has
changed just a bit, with slightly more emphasis on fiscal
and monetary easing.
Looking ahead, more slack in the economy means that it
will take more time for inflation to return to target
(slightly below 2%) and hence that the first ECB rate
hike could come later. We have revised our inflation
forecast down for next year and now believe the ECB’s
first policy rate hike could come in the second half of
2015. It also means that core inflation and labour market
indicators will be even more important going forward. If
inflation falls too much the ECB should start to seriously
worry about the risk of deflation and being too far behind
the curve.
Low barrier for more monetary easing
We expect the ECB to keep its key interest rates un-
changed until the second half of 2015. However, we also
believe that the barrier for more monetary easing is fairly
low at least for the remainder of this year. One last refi
rate cut to 25 bp could be sanctioned if key figures sur-
prise on the downside and put to question the sustainabil-
ity of the recovery. It would also be the ECB’s likely first
response if market rates rise too fast.
ECB President Mario Draghi introduced forward guid-
ance in July. The ECB now intends to keep policy rates
at current or lower levels “for an extended period”. The
Frankfurt version of forward guidance is fairly soft com-
pared with other big central banks and is more about try-
ing to talk market rates down than about making any hard
commitments, in our view. Still, forward guidance is in
place and can easily be expanded. The easiest expansion
would probably be to indicate a time frame, where policy
rates are intended to be kept at low levels. Unemploy-
ment thresholds like the Fed and the Bank of England
have introduced are less likely, but could happen, espe-
cially if the ECB really starts worrying about deflation.
We believe that a dovish ECB with all tools in place will
limit the pace at which market rates will rise over the
forecast horizon.
Holger Sandte
holger.sandte@nordea.com +45 3333 1191
Anders Svendsen
anders.svendsen@nordea.com +45 3333 3951
Gradual recovery
No turnaround yet in bank lending
Low inflation for some time
One last interest rate cut still possible

■ Germany
Rebalancing towards private consumption
After a fairly weak period at the turn of the year, the
German economy returned to the growth path in Q2. Part
of the GDP increase (0.7% over Q1) was due to a catch-
up effect in construction after the unusually long winter.
The underlying trend is probably around 0.3%.
On the demand side, the single most important driver of
the German economy is now private consumption. Real
disposable income could rise by about 1% this year and
the next. In contrast to many other countries, consumer
confidence is at a healthy level, reflecting favourable la-
bour market trends with record-high employment. Given
the very low interest rates, households’ spending on
housing construction should support growth. On the oth-
er hand, favourable financing conditions have not yet
translated into strong capital spending on machinery and
equipment. By and large, companies are still reluctant to
invest as capacity utilisation rates in the industrial sector
are below normal levels and the uncertainty about the
outlook for the Euro area is still high.
We expect business activity in the Euro area to strength-
en gradually so that German exports to Euro-area coun-
tries should increase slightly over the coming quarters.
This should also have a positive impact on capex spend-
ing. We expect GDP to grow by 1.6% next year. Our first
estimate for 2015 is 2% – again the highest rate among
the larger Euro-area countries. Given the tightness of the
labour market, we expect wages and consumer prices to
increase by slightly more than the Euro-area average.
On 22 September, 61.8 mio eligible voters are called to
the polls to elect the new Bundestag. Judging from cur-
rent polls, Angela Merkel is likely to stay in office as
chancellor, either in the current centre-right/liberal coali-
tion or heading a Grand Coalition with SPD. For more on
the election and what it could mean for Germany and for
Europe, see our research note Four more years for Ange-
la?, which is available on Nordea's website.
Holger Sandte
Back to growth
Consumer confidence at a healthy level
Outlook for manufacturing improving
Germany: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (EURbn) 2011 2012 2013E 2014E 2015E
Government consumption and investment 488 1.0 1.2 1.0 1.0 1.0
Exports 1,173 7.9 4.5 1.0 4.6 6.0
Imports 1,034 7.5 2.6 1.4 5.0 7.0
Net exports* 139 0.6 1.1 -0.1 0.1 -0.1
GDP 3.4 0.9 0.5 1.6 2.0
Nominal GDP (EURbn) 2,495 2,610 2,666 2,720 2,788 2,899
General government budget balance, % of GDP -0.8 0.2 0.2 0.4 0.2

■ France
Some structural and cyclical progress
In France things are finally moving in the right direction,
albeit slowly. That applies both to progress on structural
matters and the business cycle. Driven by final domestic
demand, GDP increased more strongly than expected in
Q2 (0.5% q/q), ending a mild recession. The rise was on-
ly partly compatible with other data indicating a much
more subdued recovery that still needs to be confirmed.
While business confidence has risen from a low level,
consumer confidence is still near its all-time low held
back by a continued rise in unemployment.
However, conditions for strong growth are not in place.
One of the reasons is tight fiscal policy, as France is still
going through the Excessive Deficit Procedure. Tax
measures contribute most to the adjustment of the target-
ed adjustment of 1.8% points. In 2014 and 2015 fiscal
policy will probably be less restrictive. On a more posi-
tive note, the ECB’s easing has been transmitted to do-
mestic lending rates so that the banking sector is not
holding back growth. Continued momentum in Germany
and a gradual further easing of the recession in neigh-
bouring Italy and Spain should support French exports.
To tackle the structural problem of low profit margins,
the government introduced a special corporate tax credit.
This should support business investment mostly in 2014.
The shortfall in tax revenues will be partly funded by an
increase in VAT, probably from 1 January 2014. We ex-
pect GDP growth of 0.2% for 2013, followed by a gradu-
al strengthening in 2014 and 2015, mostly driven by do-
mestic demand.
On the structural side, pension reform will be this au-
tumn’s hot topic. The recent labour market reform was
lauded by the IMF as the “broadest since the 1980s”. It
goes some way in increasing companies’ flexibility and
reducing the duality between employees on short-term
contracts and those on permanent contracts. Incentivising
policies are still largely absent.
Holger Sandte
Growth: moderate expectations
Weak investment activity
Unemployment rate on the rise
France: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (EURbn) 2011 2012 2013E 2014E 2015E
Private consumption 1,045 0.5 -0.3 0.4 0.3 0.6
Government consumption and investment 444 0.4 1.4 1.4 1.0 1.0
Exports 466 5.6 2.5 1.0 4.0 4.5
Imports 509 5.3 -0.9 1.2 4.0 4.0
Net exports* -43 0.0 1.0 0.0 0.0 0.2
GDP 2.0 0.0 0.2 1.0 1.5
Nominal GDP (EURbn) 1,936 2,000 2,032 2,052 2,093 2,156
Current account, % of GDP -2.6 -1.8 -1.6 -1.7 -1.5

■ United Kingdom
Broadening recovery
Data so far this year offer some hope that a sustainable
recovery is materialising. GDP growth has picked up and
the recovery is broadening. The housing market is im-
proving, the labour market is improving and exports are
finally picking up – at least to countries outside the Euro
area. Consumer spending remains the key driver of the
recovery, while investment has yet to start recovering.
High-frequency indicators suggest that growth momen-
tum will remain decent in the remainder of 2013. We
have revised our GDP forecast upwards for this year and
for 2014 and see growth in 2015 around 2%.
We believe the labour market will be the key to a sus-
tainable recovery. In recent years, trend growth has been
close to zero and the recovery has been called the slowest
in 100 years. Still, employment has been growing and
was at an all-time high in May. Growing employment
with no growth in production means that the productivity
level has fallen – this unusual pattern has been dubbed
the productivity puzzle. We expect a continued moderate
improvement in the labour market going forward, but see
some risks that the recovery could be jobless, weak and
driven solely by a normalisation of the productivity level.
For that reason, we have been quite surprised to see the
Bank of England (BoE) adopting a forward guidance
framework based on an unemployment threshold. Indeed,
the central bank itself writes that the path of the unem-
ployment rate in the expected recovery scenario is highly
uncertain. The BoE intends to keep the Bank rate at the
current level and the Asset Purchase Programme at least
at the current level until the unemployment rate reaches
7%, unless there is a risk to financial stability or inflation
expectations rise too much. In August, the BoE projected
the threshold to be reached in 2016, which clearly signals
its intention of keeping the Bank rate low for long and
thereby support the economic recovery. We see the first
hike at the second half of 2015. We expect the GBP to
gradually strengthen against the EUR.
Anders Svendsen
anders.svendsen@nordea.com +45 3333 3951
Early signs of recovery
Non-Euro-area exports improving
The labour market is the key
United Kingdom: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (GBPbn) 2011 2012 2013E 2014E 2015E
Private consumption 959 -0.4 1.1 1.6 1.8 2.0
Government consumption 337 0.0 2.8 1.0 -0.4 -0.7
Fixed investment 221 -2.4 0.5 -2.3 5.5 4.1
Stockbuilding* 2 0.5 -0.3 -0.3 0.0 0.0
Exports 447 4.5 0.9 3.9 6.5 5.4
Imports 480 0.3 2.8 1.7 6.4 4.4
GDP 1.1 0.2 1.2 1.8 2.0
Nominal GDP (GBPbn) 1486 1537 1562 1608 1669 1744
General govt budget balance, % of GDP -7.8 -6.3 -6.5 -5.0 -3.0

■ Japan
Decision time
The first two arrows of Premier Shinzo Abe’s ambitious
three-pillar strategy, accommodative monetary and fiscal
policy, have successfully lifted growth momentum and
inflation. The JPY has lost 20% in effective terms and
regained its lost competitiveness. Household consump-
tion and net exports have been the main drivers. Lately
there have been signs of a turnaround in private invest-
ment, which is positive given the huge wealth accumula-
tion in the corporate sector. These factors are expected to
support growth in the coming quarters, and the calmer
diplomatic relation to China helps the export outlook.
While we acknowledge Abenomics’ positive effects on
short-term growth, we remain cautious on the underlying
strength in the medium to long run. Without structural re-
forms, the third pillar in Abe’s plan, addressing a shrink-
ing labour force and declining productivity, Japan’s po-
tential growth will remain at the current 1%. Unlike the
policies undertaken so far, the structural reforms, such as
hiking the consumption tax, opening up the agriculture
sector and encouraging female labour participation, are
politically unpopular. Considering many of Japan’s failed
reform attempts in the past, it is too early to label Abe the
great saviour of Japan’s economy.
The reforms announced in June were short of details and
failed to impress. Abe vowed to present another round of
reforms in the autumn. Although his party now enjoys
parliamentary majority after the July election, resistance
to reforms will be strong from within the party. Currently
all attention is on whether he decides to hike the con-
sumption tax as planned by the previous government.
The last hike occurred in 1997 and has been unreasona-
bly accused of having started Japan’s decade-long paral-
ysis. The decision is due in mid-September. We expect
Abe to give green light to the hike effective from April
2014. It will have little effect in reducing public debt but
is a first step towards fiscal consolidation. More im-
portantly, it shows Abe’s ability to make tough decisions.
Amy Yuan Zhuang
amy.yuan.zhuang@nordea.com +45 3333 5607
Strong momentum in the short term
Regained competitiveness
Sales tax hike: unpopular but necessary
Japan: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (JPYbn) 2011 2012 2013E 2014E 2015E
Government consumption 95,188 1.4 2.4 1.4 0.8 1.1
Gross fixed capital formation 96,398 1.2 4.3 1.1 1.0 1.6
Stockbuilding* -797 -0.5 0.0 -0.3 -0.2 -0.1
Exports 73,270 -0.4 -0.1 3.5 3.5 3.2
Imports 67,477 5.9 5.5 2.2 3.5 4.5
GDP -0.6 2.0 1.6 1.3 1.0
Nominal GDP (JPYbn) 482,442 470,774 475,713 485,228 494,932 504,831
Consumer prices, % y/y -0.3 0.0 0.2 0.8 1.3

■ Poland
On recovery path
Following a sharp slowdown in economic growth
throughout 2012, the Polish economy bottomed out in
early 2013. We predict that the recovery will continue in
the remainder of this year and further GDP growth accel-
eration should be seen in 2014-2015.
The key driver of the pick-up in economic activity will
be improvement in the external environment (strong ex-
posure to the Euro area, particularly Germany). Fixed in-
vestment should rebound on stronger investment activity
in the private sector (record-low interest rates, easier
lending conditions, reduced uncertainty regarding devel-
opments in the Euro area) and revived activity in public
investment (reduced pace of fiscal consolidation and in-
flow of fresh EU funds from 2014). Consumption growth
will be fostered by the already started improvement in
labour market conditions and increased consumer confi-
dence.
The sharp inflation drop in late 2012 and H1 2013 has al-
ready started to reverse. We predict that recovering do-
mestic demand and low base effects will lead to a gradual
rise in inflation towards the central bank’s 2.5% target.
However, as we do not expect the output gap to begin
closing until early 2015 (potential growth of about 3%
will not be exceeded by then), any significant underlying
inflationary pressures are unlikely to occur earlier.
Moderate economic recovery and constrained inflation-
ary pressures should allow the Polish MPC to keep inter-
est rates on hold well into 2014. We expect the first rate
hike in Q3 2014, and normalisation of Poland’s monetary
policy should be a gradual process with the key policy
rate at 3.5% at end-2014 and 4.5% at end-2015.
In the medium term the PLN will benefit from cyclical
recovery of the Polish economy, but in the short term it is
vulnerable to a possible sell-off of Polish bonds by for-
eign investors amid concerns about QE3 tapering.
Piotr Bujak
piotr.bujak@nordea.com +48 521 3651
Economic growth has started to gain momentum
Inflation bottomed out
PLN dependent on developments in bond markets
Poland: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (PLNbn) 2011 2012 2013E 2014E 2015E
Private consumption 856 2.6 0.8 0.5 1.3 2.5
Government consumption 268 -1.7 0.0 -0.1 0.5 2.5
Gross fixed capital formation 281 8.5 -0.8 -1.3 5.5 7.0
Exports 598 7.7 2.8 3.2 3.9 4.5
Imports 615 5.5 -1.8 0.3 3.6 4.5
GDP 4.5 1.9 1.4 2.5 3.5
Nominal GDP (PLNbn) 1,417 1,528 1,595 1,640 1,708 1,782

■ Russia
Prepare to fight slowdown
Markets and investors are unwillingly getting used to the
slowing economic growth in Russia. The threat of stag-
nation is not in our baseline scenario, however, decelera-
tion of growth appears to be more serious than previously
anticipated.
Household consumption, accounting for more than 50%
of GDP, still continues to be the major driver of econom-
ic growth. Robust wage growth and low unemployment
along with credit market activity spur consumption. The
sustainability of consumption growth is uncertain as sav-
ings may increase following weak business activity and
overall decreasing consumer confidence.
However, the major concern will be low investment ac-
tivity. Capital investment growth rates slowed almost to
0% from 6.7% growth last year. Big companies remain
reluctant to invest due to high interest rates and unpre-
dictable and stagnant commodity market dynamics. Eco-
nomic growth will be supported at the end of 2013 by the
farming sector and positive base effects. In H1 2014 the
Olympic Games may add two cents to growth but the
overall pace will likely be modest. We forecast 2.4%
GDP growth in 2013 and 2.7% in 2014.
In order to stimulate economic growth, higher budget
spending can be expected. The government is preparing
to allot about USD 40 billion (almost 2% GDP) from the
reserve fund to fund long-term infrastructure projects.
Moreover, until the end of 2013 the CBR will likely start
to cut key interest rates, supporting business confidence
and stimulating investment. Our oil market forecast is al-
so the supportive factor in the long run.
The rouble may stay under pressure near term given eco-
nomic growth concerns and prospects of a more dovish
monetary policy. We are less optimistic over the RUB in
the coming period, but we still see a relatively stable cur-
rency in the long run, as exporters’ activity and our oil
price forecast of USD 103-113/bbl for 2013 remain RUB
supportive, though periods with volatility may occur.
Dmitry Savchenko
dmitry.savchenko@nordea.ru +7 495 777 34 77 4194
CBR shifts target basket band upward
Consumption is still robust
Investment activity is dragging growth down
Russia: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (RUBbn) 2011 2012 2013E 2014E 2015E
Fixed investment 10,014 8.3 6.7 2.5 3.0 3.0
Exports 13,679 0.3 1.8 1.5 2.0 2.1
Imports 9,790 20.3 8.7 3.6 4.0 5.0
GDP 4.4 3.4 2.4 2.7 2.8
Nominal GDP (RUBbn) 46,309 55,799 62,599 68,668 75,459 82,924
Central govt budget balance, % of GDP 7.0 -0.2 -0.3 -0.4 -0.4

■ Estonia
Export-based (gradual) recovery in sight
The Estonian economy is experiencing a temporary stag-
nation with growth at about 1.1% y/y in the first half of
the year (Q2: 1.3% y/y), disappointing against already
pessimistic expectations. Robust domestic demand-led
growth has been over for some time. However, the out-
look is gradually improving. Exports are expected to re-
gain broad-based strength only towards the second half
of next year.
Slower growth is a result of exceptionally strong (state)
investment volumes from last year, but also due to per-
sistent economic uncertainty in key export markets (in-
cluding Finland, Sweden and Russia) and inflationary
pressures emanating from high energy prices. Despite re-
al growth of about 1%, the economy still expanded above
5% in nominal terms in the first half of the year.
Growth will remain underpinned by resilient consump-
tion, which is supported by real wage growth and im-
proving employment prospects. Unemployment will
reach 7.5% by 2015. Despite headwinds from slower
global trade, exports and manufacturing volume continue
to expand at a moderate pace. Exports and manufacturing
volume exceeded pre-crisis highs already at the end of
last year. The market remains challenging with weak ex-
port orders. Foreign companies are eager to expand busi-
nesses in Estonia at lower production costs.
High inflation remains an impediment for the economy.
As energy price effects fade and import prices trend low,
we expect inflation to moderate into 2014. Convergence
towards the Euro-area average inflation rate remains a
challenge since higher wage increases and volatile food
prices limit the disinflation process. Price pressures from
global energy and food prices are assumed to be limited,
but risks rise in 2015 as the economy regains strength.
Overall, the economy is expected to re-accelerate into
next year as export demand and investment appetite
gradually return. Due to the slow recovery of Euro-area
demand in H2, any pick-up in growth momentum for Es-
tonia will likely remain muted in 2013.
Tönu Palm
tonu.palm@nordea.com + 372 628 3345
Investments will cut into economic growth
Manufacturing outlook improves only gradually
Inflation decelerates into 2014
Estonia: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (EURbn) 2011 2012 2013E 2014E 2015E
Private consumption 7.50 3.6 4.4 3.2 3.6 3.7
Government consumption 2.99 1.4 4.0 0.8 0.9 1.0
Fixed investment 2.73 25.9 20.9 -2.2 5.6 4.5
Exports 11.38 23.4 5.6 5.0 6.3 5.1
Imports 10.41 25.0 9.1 4.0 6.4 4.7
GDP 8.3 3.2 1.9 3.6 3.7
Nominal GDP (EURbn) 14.32 16.0 17.0 17.9 19.0 20.5
Current account, % of GDP 2.1 -1.2 -0.8 -1.2 -1.3
General govt budget balance, % of GDP 1.2 -0.3 -0.6 -0.1 0.0

■ Latvia
Domestic demand unseats exports as key growth driver
According to the recent flash estimate, the economy of
Latvia grew by 3.8% y/y in Q2 2013 while the seasonally
adjusted q/q growth slowed down from 1.4% in Q1 to
0.5% in Q2. The slowdown was mainly caused by strong
headwinds in several key export markets as well as pro-
duction stoppage at the steel plant Liepājas metalurgs, a
key exporter. In Q2 services grew by 7% y/y, construc-
tion by 5% y/y and trade by 3% y/y, while the predomi-
nantly export-oriented processing industry recorded a de-
cline by 0.6% y/y.
The above data support our forecast that in 2013 domes-
tic demand will at least temporarily unseat exports as the
main driver of growth, and economic growth for the year
as a whole will be below 4% – considerably lower than
last year but still above most other EU member states.
Growth should accelerate slightly in 2014 due to both
improving demand for exports and positive effects from
euro introduction. On 9 July 2013 the Ecofin Council
voted to admit Latvia into the Euro zone from 1 January
2014 and fixed the changeover exchange rate at LVL
0.702804 per EUR, ie the mid-point rate maintained by
the Bank of Latvia since the end of 2004.
The consumer price index contracted in July m/m and in-
flation in y/y terms is still at just 0.3% while the 12-
month average inflation is at 0.8%. Annual inflation is
expected to stay below 1% in 2013, but to accelerate
considerably in 2014 due to basis effects and factors such
as liberalisation of the electricity market for households.
Latvia’s banking sector is well capitalised and liquidity is
abundant. Deleveraging is now in its fifth year, with
loans to residents declining further in H1 2013. Deposits
are growing at a moderate pace and no additional influx
of non-resident deposits as a result of the financial crisis
in Cyprus has been observed so far.
Andris Strazds
andris.strazds@nordea.com +371 67 096 096
Domestic demand driving growth in the short term
Unemployment sharply down, but still elevated
Steady increase in non-resident deposits
Latvia: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (LVLmn) 2011 2012 2013E 2014E 2015E
Government consumption 2,349 1.1 -0.2 1.0 1.5 1.5
Exports 6,847 12.7 7.1 2.5 4.0 5.0
Imports 7,020 22.7 3.1 2.8 4.5 6.0
GDP 5.5 5.6 3.9 4.4 3.2
Nominal GDP (LVLmn) 12,784 14,275 15,520 16,250 17,450 18,500
General govt budget balance, % of GDP -3.5 -1.5 -1.0 -0.5 0.0

■ Lithuania
Baltic tiger is showing its teeth
Lithuanian GDP increased by 4.2% y/y in the first half of
2013 driven by robust industrial production (7.9% y/y)
and retail sales (4.0% y/y) growth. This is in line with
our forecast of 4.0% expansion in 2013 as a whole,
which is truly impressive given an ongoing fiscal consol-
idation and weak performance of Lithuania’s main export
partners. Positive economic sentiment suggests that Lith-
uanian economic growth will continue to be among the
fastest in the European Union.
Exports were a key economic growth driver in the first
half of the year. However, they were boosted by tempo-
rary one-off effects: a record-high wheat harvest and re-
stored full oil refinery plant production capacity. Exclud-
ing those effects, export growth would have been 4% in-
stead of 14% in H1 2013. We expect export growth to
stall in H2 2013 as these effects will fade away.
Nevertheless, private consumption growth will keep
momentum and offset the negative effect of stagnating
exports on overall economic growth in 2013 H2. Rising
wages, falling inflation and declining unemployment are
boosting households’ real purchasing power. Consumer
confidence is at record-high levels, suggesting that pri-
vate consumption growth will remain robust.
Lithuania is likely to join the Euro zone in 2015 – one
year later than Latvia. Lithuania was not eligible to adopt
the euro in 2014 since it failed to meet inflation and
budget deficit criteria (both by a narrow margin of 0.2%).
However, falling inflation (annual inflation fell to 0.6%
in July) and rising tax revenues significantly strengthen
Lithuania’s chances of meeting both criteria this year.
The main challenges for the Lithuanian economy come
from the East. In particular, the weakening Russian
economy may have a significant negative impact on
Lithuania’s export performance, since Russia is the top
destination for Lithuanian exports.
Žygimantas Mauricas
zygimantas.mauricas@nordea.com +370 612 66291
Baltics were immune to the Euro-zone recession
Domestic consumption supported by fundamentals
Lithuania is likely to adopt the euro in 2015
Lithuania: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (LTLmn) 2011 2012 2013E 2014E 2015E
Fixed investment 15,589 18.3 -2.5 6.0 7.0 6.0
Exports 64,792 14.1 11.2 8.0 6.0 5.0
Imports 66,683 13.7 5.6 7.5 7.0 6.0
GDP 5.9 3.6 4.0 3.8 4.0
Nominal GDP (LTLmn) 95,323 106,370 113,471 119,371 126,892 135,774
General govt budget balance, % of GDP -5.5 -3.0 -2.8 -2.4 -2.0

■ China
Not a cyclical slowdown
 Growth stabilisation in H2
 The new premier has his heart set on reforms
 Declining potential growth on structural factors
 CNY liberalisation continues
Beijing’s unexpectedly radical change
The development of the Chinese economy in H1 has not
played out as we expected. Domestic and external de-
mand has been sluggish. Surprisingly the authorities have
chosen not to stimulate the economy to a larger extent us-
ing investment stimulus. It reflects their tolerance for
lower growth in order to rebalance the economy.
Beijing’s radical change of attitude was not easy to pre-
dict. China’s economic policy under Wen Jiabao, the
preceding premier, has placed a high importance on
maintaining economic stability and meeting growth tar-
gets. Li Keqiang, the new premier, has been Wen Jia-
bao’s right hand for five years. He was perceived to share
Wen’s cautious stance and not be a hard-line reformist as
he later proved to be.
We believe that “Likonomics” will set the agenda going
forward, aiming to control credit growth and bring down
overcapacity in manufacturing, but only if the growth
rate does not slip below the lower limit, which we still
believe to be 7.5% for this year. Currently we are close to
this pain threshold, which is the reason why the govern-
ment has announced some help over the summer to pre-
vent a further drop in economic activity.
Beijing’s new standpoint makes it harder to read China’s
crystal ball. It remains to be seen how much growth will
be allowed to decline in the next two years when the tar-
get is likely to be lowered to 7.0%, and whether local of-
ficials will follow the new guidelines. Local officials’
evasion of central policies has been seen before.
Improved cyclical sentiment in sight
Thanks to cyclical improvement and the mini stimulus,
such as tax breaks for small firms and eased credit to ex-
porters, the Chinese economy is unlikely to drop much
further in H2. We expect the recent pause in the CNY
strengthening and a brighter outlook for the advanced
economies to lead to higher export growth. Imports to
China will benefit as well given the relatively large share
of imports used in producing exports. Given the exten-
sive destocking during H1, manufacturers will soon pro-
duce again to refill inventories.
We only see a stabilisation and not a recovery for struc-
tural reasons. After years of rapid growth, the catching-
up effect becomes smaller and China’s growth potential
will naturally fall. In addition, the driving forces behind
the growth miracle created some problems, which require
a lower growth to be addressed.
Structural issues lower potential growth
According to the IMF’s calculation, capital has account-
ed for about half of China’s potential output growth over
the past 20 years. Most of the capital went cheaply to the
state-owned enterprises (SOE). This has caused overin-
vestment and overcapacity, particularly in the heavy in-
dustrial sectors such as steel, shipbuilding and mining,
which the SOEs dominated. The problem became worse
after the 4 trillion yuan investment stimulus in 2009.
The IMF has estimated the capacity utilisation rate in
China to be as low as 60% in 2011, compared to 76% in
the US and 86% in Germany. The evil twin to overcapac-
ity is deflation, which is reflected by the persistently neg-
ative growth in PPI, despite double-digit growth in la-
bour costs. The low pricing power is then followed by
shrinking profits. Several studies have shown that some
industrial SOEs are not profitable once government sup-
ports such as cheap loans, rent-free land and direct subsi-
dies are stripped away. In 2012 the SOEs realised profits
of 6% of GDP but employed 10% of the labour force,
implying relatively low productivity. Unfortunately there
is no painless solution to reduce overcapacity. It will lead
to higher bankruptcy and push up non-performing loans
(NPL). The regulators will be careful in designing the so-
lution, so NPL will be kept at a manageable level. Fur-
thermore, Beijing needs to curb the SOEs’ monopoly
China: Macroeconomic indicators (% annual real changes unless otherwise noted)
2010 (CNYbn) 2011 2012** 2013E 2014E 2015E
Stockbuilding* 999 0.7 -0.1 -0.6 0.0 -0.1
Exports 12,292 8.8 7.0 7.5 7.5 7.0
Imports 10,720 4.8 10.4 9.0 10.0 10.0
GDP 9.3 7.8 7.5 7.3 7.0
Nominal GDP (CNYbn) 40,151 47,310 51,932 56,606 61,418 66,331
* Contribution to GDP growth (% points), **National account details for 2012 still not released

■ China
power and promote fair competition with the private
businesses. This is the only way to obtain efficient capi-
tal distribution and investment.
Another issue keeping the leaders awake at night is shad-
ow banking. In a separate analysis we found China’s total
credit outstanding to be 220% of GDP at the end of 2012,
whereas non-official bank lending accounted for nearly
half. While the risk of a financial collapse is small be-
cause the state owns assets worth more than 300% of
GDP and holds the world’s largest foreign exchange re-
serves of USD 3.5 trillion, it would be a good idea to
keep it under control.
Overcapacity and shadow banking are the reasons why
we expect credit conditions to be tightened, especially in
the non-official financial sectors. All else equal, this will
cause the potential output to drop. A deteriorating demo-
graphic situation will also act as a drag, which is not easy
to reverse. Many researches have argued that China has
passed the Lewis turning point, which implies less sur-
plus labour. The manufacturing sector will slow down as
cheap labour is no longer available. The female labour
participation is already high. Relaxing the one-child poli-
cy will provide benefits only in the very long term. What
is left is to boost old-aged employment by lifting the re-
tirement age, currently 50 for female blue collars and 60
for male blue collars. Productivity needs also to be raised
to maintain a high potential growth. Productivity catch-
up related to industrialisation may have peaked already.
Even though the educated share of the labour force has
increased, the quality has reportedly fallen. Education
devaluation has become a widespread phenomenon.
CNY stays away from the currency war
Unlike most other Emerging Markets currencies, the
CNY has not been hit very hard by the speculation over
Fed tapering. The CNY has gained 5.7% year to date
(latest data from June) in effective terms, while the JPY
lost 20%. Beijing’s reluctance to weaken the CNY
against the USD can be interpreted as a wish to continue
the renminbi liberalisation.
Several official and unofficial stories during the spring
indicated that a series of reforms need to be in place be-
fore capital control can removed. The State Council said
in May that quotas on foreign investment in domestic fi-
nancial markets would be raised to give domestic com-
panies better access to foreign funding. Deputy Governor
at the PBoC revealed that the CNY trading band may be
widened from the current +/- 1% in the near future. The
benchmark lending rate floor was removed at the end of
July, a first step to liberalised interest rates. All in all, we
expect the financial liberalisation to continue and the
CNY to strengthen.
Amy Yuan Zhuang
amy.yuan.zhuang@nordea.com +45 3333 5607
Growth stabilisation in sight
Industrial turnaround fuelled by restocking
Serious overcapacity problem in China
CNY strengthening continues as wished

Ekonomiska utsikter 4 sept 2013

Ekonomiska utsikter 4 sept 2013

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