12.09.20 cbi international economic outlook (sep)

7/28/2019 12.09.20 CBI International Economic Outlook (Sep)

1/20

International Economic Outlook

QUARTERLY september 2012

Uncainy o uild houghauunTh gb vy m v

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CBI international forecasts

2011 2012 2013US 1.7 2.0 2.3Eurozone 1.5 -0.5 0.3

Germany 3.1 1.1 1.7

France 1.7 0.0 0.6

Italy 0.5 -2.1 0.0

Spain 0.7 -1.4 -2.8

UK 0.8 -0.3 1.2Japan -0.7 2.8 1.9China 9.3 7.8 8.5India 7.5 5.3 6.7Brazil 2.7 2.4 5.0Russia 4.3 4.0 3.0World 3.8 3.4 3.7

EuoEuz

Deep recessions in the periphery

2-4

UK

Subdued prospects for growth

5-7

Oh Eup

Outlook contingent on the Euro area

8-9

USFed acts on persisting unemployment

10-12

JaanDomestic demand shows loss of momentum

13Eging akCh

Slowdown continues into Q3

14

Id

Questions over long-term growth potential

15

Bz

Tentative signs of a pick-up in activity

16

Ru

Softer growth likely in H2 2012

16

Gloal iuFood and oil pricesthe only way is up?

17-18

pg:


2/20

international economic outlook - september 2012

2

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EurozoneCBI Eurozone forecast

12mth% unless otherwise stated 2 011 2 012 2 013Gr ow t h and consumpt ionReal GDP, of which: 1.5 -0.5 0.3

Germany 3.1 1.1 1.7

France 1.7 0.0 0.6

Italy 0.5 -2.1 0.0

Spain 0.7 -1.4 -2.8

Household consumption 0.2 -0.7 0.0

Fixed investment 1.6 -3.1 0.6

Government consumption -0.3 -0.5 -0.8

External TradeExports 6.3 3.2 2.4

Imports 4.1 0.0 1.6

CPI inflat ion 2.7 2.4 2.1Unemployment rate (%) 10.2 11.3 11.9Gov e r nme nt balance (% of GDP ) -4.1 -3.5 -2.5ECB refi rate (%)* 1.0 0.5 0.5*end year


3/20


3

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p Tk,

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q .

The Eurozone recovery has stalledT , p

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M, E p -

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Contributions to Quarterly Eurozone Real GDP Growth

Rebalancing Intra-Eurozone TradeDvg -E k

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GDP Q1 2007 0.8% Q1 2012. F

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Trade Balances with the Rest of the Eurozone

-14

-12

-10

-8

-6

-4

-2

0

2

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

% of GDP

Germany France Italy

Spain Portugal Greece

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

Q1-11 Q2 Q3 Q4 Q1-12 Q2

pp

Consumption Government Investment Inventories Net Trade


4/20


4

25.1%. Ev G k

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p M,

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The periphery is not benefitting frommonetary stimulusAg , E HICP

v ECB g Ag

Sp 2011, 2.4% 2.6%. C

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Recovery depends on crisis progressAv gg E v

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p g p g

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I ). Ag pg vg ,

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Interest Rates on Short-Term Loans to NFCs

0

1

2

3

4

5

6

7

2005

2006

2007

2008

2009

2010

2011

2012

%

Germany France Italy Spain


5/20


5

O 2012 2013

. F 2012,

fl w

w ,

w fi . Ifl

2013,

. T w

w , w

,

.

Underlying conditions close to flat in Q2T

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w,

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w fl Q2, w w

CBI .

I , GDP 1.1

- . Hw,

w , w

9%, w

fl. I, 60%

GDP

, j 7%

.

Some bounce-back expected in Q3W CBI

fl ,

GDP w w, J

ff w. A O

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w 0.1 w. B

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F 2012 w, UK

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GDP w 1.2%, w w

2.0%, T

w w

, fl

.

Uncertainty likely to build furtherT . W

--

w -ff w- ,

w w

UKCBI UK forecast

12mth% unless otherwise stated 2011 2012 2013Growth and consumptionReal GDP 0.8 -0.3 1.2

Household consumption -1.0 -0.1 1.4Fixed investment -1.4 1.1 3.7

Government consumption 0.1 2.7 -0.6

External TradeExports 4.4 -0.4 3.5

Imports 0.5 2.1 3.7

CPI inflation 4.5 2.6 2.2Unemployment rate (%) 8.1 8.1 8.4Public sector net borrowing (% of GDP) 8.2 8.8** 7.7Bank Rate (%)* 0.5 0.5 0.5*annual average; ** excludes transfer of Royal Mail pension assets

UK GDP (q/q%)

0.5

-0.1

0.6

-0.4-0.3

-0.5

0.6

0.2

0 .3 0 .3

0 .4 0 .4

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

CBI forecast


6/20


6

. Mw,

US fi ff, ,

w .

Inflation to fall furtherS M , fl

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S, w

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w , w w fl

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fl w 2013,

w w w ww . Hw,

fl w, ,

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Labour market proves resilientC

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J, 236, w

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W w (431)

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J.Squeeze on household incomes to lessenA w w w,

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2013, . O

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N,

2013

w ,

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Household consumption (% change since pre-recession peak)

Employment (Quarterly Change, Thousands)

-200

-100

0

100

200

300

-7

-5

-3

-1

1

3

5

7

9

11

0 2 4 6 8 10 12 14 16 18 20 22

time in quarters, pre-recession GDP peak = 0

1990s present

CBIforecast


7/20


7

5% w Q1

2008.T fl z

w .

Weakness in services exportsMw, ww

UK fi , w ( )

1.7% fi .

T , w, w

, , w

( Q1 2012)

1% , w w

4% w.

I, Q1 2008,

6%, w

4%. T fl

,

w , w

w ,

fi , w UK

. I fl

fi

w.

O , I T S

fl, w

w

, w fl

.

I ,

w 2013,

, w

w M.

Investment intentions remain subduedT ,

w . I

, fi w (1.7%)

.

T CBI w- . A ,

w w

5% 4% 2013.

More QE remains on the agendaS ,

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B E F

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w fi

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Mw I J, MPC

50, z

375 (25% GDP).

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MPC

, w

w QE,

Ifl R.

Exports (% change since Q1 2008)

cbi investment intentions composite (% balance)

-60

-50

-40

-30

-20

-10

0

10

20

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-15

-10

-5

0

5

10

2008 2009 2010 2011 2012

Goods Se rvic es


8/20


8

T N

E, S

S ff

. A

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.

M, E

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.

Norways growth still quite robust, Swedensless soN , H2 2010 ,

, K,

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N 4.8% Q2 2012,

3%. G

q 1.5% 1.2% q q

. M GDP, ,

, 3.6% -- 1.2%

q . E ,

-- - 4.4%

q,

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D

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M ,

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0.2% ,

K

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M, J.

S :

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S GDP 1.4%

q 2012, , -

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1.1% --;

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q--q,

2010.

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50.6 45.1 A, ,

EC E S I (ESI)

j - 100.7 A,

A.

M, K M

A, 9.16 8.21,

-

1992 . T

R,

Other EuropeScandinavia & Switzerland: Real GDP Growth

Scandinavia & Switzerland: Nominal Effective Exchange Rate

-1

0

1

2

3

4

5

6

Q1-11 Q2 Q3 Q4 Q1-12 Q2

% yr/yrNorway Sweden Denmark Switzerland

80

90

100

110

120

130

140

2008 2009 2010 2011 2012

2008=100

NO Krone SE Krona DK Krone CH Franc


9/20


9

2008 S

. N,

S, 1.5%.

Growth still weak in SwitzerlandS GDP 0.1% Q2,

- . W

q, q , --

0.6%, Q4 2009. T

S

2011 ,

Q1 2011. T

F , 1.20

S N B (SNB), .

T - S . B

PMI KOF 2012

,

, 48.6 46.7 A,

- A,

. U ,

S , 2.9% J, ( CPI

0.7% J) ,

. L

SNB

F.

Outlook for emerging Europe is bleakO E -

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fi

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A

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Mixed picture in PolandM

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fi ,

Q3 . F ,

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), M J.

Ifl ,

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fi

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T

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Turkey holding up wellT E

. GDP

1.8% q Q2,

(-0.1% Q1). N- j

- , T ff

E N A,

M E C A 29%

Q2, I.

Emerging Europe budget deficits in 2011 (% of gdp) Turkey export growth (y/y%)

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0Hungary Lithuania Slovakia Slovenia Serbia Romania

CzechRepublic Croatia Latvia Poland Turkey

-15

-10

-5

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


10/20

international economic outlook - march 2012

10


T

F

R B,

QE3. B

fi

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x.

Ey s gwg swy b sdyUS 1.7%

, fi 2%. P

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C fi fi

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7% . H, x,

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x

x -

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2012.

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fi J. T

2010. T

,

(

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,

( $3.85 ),

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ffi

x 2% .

Ipvs sg M j

A . J 2.3%

C/S H x

20-

x . T 2.3%

2000. CL

21% z , 60%

2012, 14% .

Ud SsCBI United States forecast

GDPcontributions to growth

12mth% unless otherwise stated 2011 2012 2013Growth and consumptionReal GDP 1.7 2.0 2.3

Household consumption 2.2 2.0 2.2Fixed investment 3.8 3.7 6.0

Government consumption -1.2 -0.2 0.1


Imports 4.9 4.3 6.6

CPI inflation 3.1 2.1 2.1Unemployment rate (%) 9.0 8.3 7.8Federal Balance (% of GDP) -8 .8 -7.4 -5.4Federal Funds Rate (%)* 0.1 0.1 0.1*annual average

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2011 Q2 Q3 Q4 Q1 Q2

2011 2012

Private spending Govt spending GFCF Inventories Net exports


11/20


11


T z

23% S

54 H T. T

- fi N

A R (E A)

(

F M, F M

HUD

).

N x

2008, ,

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,

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,

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2011 (

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.

H, x

USA x

-. T

ffi

2.2

2006.

N,

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,

,

.

B py dsppgA

S M, -

. T

94,000,

. T

8.1% A 8.3% J. H,

x

j ,

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, ,

, 375,000,

659,250 M

2009

369,000. T x -

- x (x

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7 A 2010,

j 2 .

I j

, j

,

- .

Ad gv bdgs d pssA ,

. S fi

, x ,

x, .

T

. T F

G

( fi ff).

M

$600 $700 , 4% GDP. I

, x

x ,

. T $200

Housing starts (y/y%)

-60

-40

-20

0

20

40

60

2004 2005 2006 2007 2008 2009 2010 2011 2012

0

5

10

15

20

25

30

35

40

45

Average duration of unemployment (weeks)


12/20


12


$250 , 1.5% GDP,

, x

x.

My py s dvT F R C

x , . T F ,

8%.

S ,

. B

ffi

. B

NAIRU (-fl j )

5%; 6

6.5%.

R ,

fi

fi. U

. T , F

. S

,

fi ,

.

S x

, F

, .

T ( 13 S)

. I F z

2015, C B - (

J 2014 ). T

.

C ff j

- - ffi

$40 , ,

. H

R F

O fi

.

T

. A

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-. T -

A F P

L ,

x

QE . M x

x

F ,

(MBS).

I F

MBS,

,

,

x . I F ,

2%,

.

SyT x

. I ffi 1.5

2.5% . F

x, fi ff

, ,

. T

,

2012.

M, z

,

, ,

. C

, x

. P

fi ,

x 2% 2013.

US GDP growth (q/q% annualised)

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13

CBI forecast


13/20


13

J m wh

mky h , wh h

wh v m h w

m v 1.1% h h

0.2%. Mv, mb

m hv wk

h h .

Th k 2013

wy m m m

-x v x.

Slowing growthJ my w by v 0.2% h fi

( 0.7%) Th fiy wk h

h 1.3% wh ( 5.3%)

h fi . I h by 4.3%

m Mh k Jy, w b-

v.

Pv m w by 0.1% h , h h wh. Lw

m E A h x,

x 0.1% m GDP wh,

b 0.1% h fi h mh. Gwh

b m m vm (0.1%) fix

m (0.2%). Pv m h b

m x by b by -y

- by x A. M

m hv . C

wk h h h mh, v h

m k A My, h

m hm, mhy

hh, yh m, h k.

Fm w , h v m wh

ky b 1% 2013, v by

m, mm wh m fl. O v

h y h h h .

Fh , m my m w h

2013 2014 h m x

m 5% 8% A 2014. Smy, x b h

my y m m h vm, wy

k hh h x m 2015 h

vb x m h by

hm, b vy w v.

O fi hv b m h 2011,

h flw vy hhy, h k

hh h 2008. Th h my vm

w. Hwv, w hh -

m y y, k

w ky m wh v vm 3 4%

m.

Th x h wy b h 2012 2013 w

h my mk h m

m m x m. Th

h v w k h h

m ww E, A USA bm

. I , h h J mv -

vy, wh wh x

m .

JapanCBI Japan forecast

Japan gdp (q/q annualised, %)

12mth% unless otherwise stated 2011 2012 2013Growth and consumptionReal GDP -0.7 2.8 1.9


Government consumption 1.9 1.8 0.0

External TradeExports -0.2 5.1 7.3

Imports 5.9 7.4 5.8

CPI inflation, excl. energy -0.7 0.0 0.2Unemployment rate (%) 4.6 4.4 4.1Government balance (% of GDP) -9.5 -9.0 -7.7Overnight Call Rate (%)* 0.1 0.1 0.1*annual average

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

2005 20 06 2007 2008 20 09 2010 2011 2012


14/20


14

C m ud l,

lbl vm mpud

k dm du. Hv,

xp pk up d

d , ff pvu

m pl l kk d

mplm ud vm

uu b. Hv,

uxpdl pld ld uld

mp u u

m bl C m.

Growth in China continues to slow...C m ud l m, GDP

l u Q2 ( 7.6%). R

d u ld ud Q3

bl, dul pdu ll Auu (9.0%

) l M 2009, bd b

k Auu muu PMI.

...compounded by a deteriorating externalenvironmentS lbl d mpud C dm

ld. Gd xp b ju 2.7%

Auu, ll bl dubl-d v

p dd. Mu b d ll xp

EU (d b 12.7% Auu), bu mj

d p v l kd. A u d

lbl m uld mp C d,

uld dp u.

But pro-growth policy measures shouldensure a pick-up later this yearHv, xp pk up b d

, pvu m mulu b d

u. I dd, Nl Dvlpm d Rm

Cmm (NDRC) l ppvd Rmb1

uu pd (ud 2% GDP). Wl

b ll dbd mulu pk, d

m ll b lld u v vl ,

um d pmm v C pp.

I l dd dbl mu m mbu pd

um m ll vm,

v ud pj. Au

lkl m ud mul m d

ldp l ; xp

7.8% 2012, ll bv vm

(7.5%). T l l uul,

u bl C m.

However, focus must remain on rebalancingNl, k m pll m pldld u ll u m

bl, .. m v-l vm d

xp d m ubl dm dv

, u um pd. F xmpl, ld

um vm,

C ll b mpd ll mb

dp upp xp. Wl uld pv

uppv -m, uld l

xb mbl bul up .

ChinaCBI China forecast

China GDP growth (y/y%)





Imports 2.7 5.5 9.4

CPI inflation 5.4 3.2 3.2Unemploymen t rate (%) 4.1 4.0 4.0Government balance (% of GDP) 0.1 -1.4 -1.0Policy rate (%)* 6.56 5.64 5.07*end year

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

20 02 2 00 3 2 004 2 00 5 20 06 2 00 7 2 00 8 2 00 9 20 10 2 01 1 20 12


15/20


15

Whl I GDP gwh k

gll h q 2012, h

l h gg

whh h lww h

ll . I h h ll

gwh, h h ll

l , h hgh

l bl l .

A b gg l h

l q I lg-

l gwh.

Has Indias slowdown bottomed out?Whl I GDP gwh k hgh Q2 2012 ( 5.5%

g, 5.3% h q), h

bkw h w ll g. Gwh

bh g g w (0.2%

0.1%), whl gwh h

( 6.9%), g lw x 2002.

S b x

, l l hw lg

l gwh ( 4.0%).

Th l g g

g h h b h gwh

bh x bg b

bg glbl , wh h l h

b ll .

Little room for further policy easingShl lw h, I h ll

llw h h j EME b g

l. Il bl hgh (

9.9% Jl), kg h lkl.

I, h l bk l h

l . A wk l

l l l g g.

Th, whl w x h k- gwh

gll h glbl gh, l

ll bk wk

h lg w k h .

Structural issues raise questions overIndias long-term potential growthS h w k b

h h l h I glbl g.

W w Jl hghlgh h g

I kg ,

lkl h b w Q3. Pll

g k h h b fi

l lggh gwh

fix Q2 (0.7%). Hw, h h b

g h g, wh h g g

h l FDI g h

l (h g l l b).

Hw, h l :

h l w l g

l 2011, l h g bkk

hl . A l, q

g I lg- l gwh,

bl k wh Ch, l.

IndiaCBI India forecast

India GDP and private consumption (y/y%)

12h% l hw 2011 2012 2013Growth and consumptionRl GDP 7.5 5.3 6.7

Hhl 5.3 4.9 7.9Fx 3.6 -2.7 5.9

G 7.6 5.7 5.6

External TradeEx 19.2 11.3 4.3

I 22.4 3.0 9.9

CPI inflation 8.9 9.0 6.1Unemployment rate (%) 8.0 8.1 8.1Government balance (% of GDP) -6.8 -5.3 -4.9Policy rate (%)* 8.5 8.4 7.5*

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2005 2006 2007 2008 2009 2010 2011 2012

GDP Private consumption


16/20


16

Brazils slowdown looks to be bottoming outTh nv gn h h wdwn n B

bmng . Wh ggh, GDP gwh pkd p n

ny-djd qy b 0.4% n h nd

qh n y. Th hv bn m h

pv gn n hn, wh nd pdn ng

h nd mnh nnng n Jy (by 0.3%), ng

m 2012.

Th ff n fi m pp dm

dmnd pp b dng hgh. F xmp,

nmn m vh ngy n Jn (13.3%

SA), wng h mpmnn x bk n

ph. Th gvnmn ny nnnd

$66bn m pkg b n nvmn,

gy hgh nn h pv . Gvn h

p n h bn mj bnk B

gwh, h nnnmn ngng, hgh m

nny mn v h ffiny h

mpmnn.

Th m, mbnd wh h ggd mp

v n , hd pp gwh n h

n m. Hwv, h bd p n nflny

p ky, dy byd by gh b mk

ndn. A wh m h mgng nm, B

vnb h wk gb nvnmn, whh h

dy bn bng dwn n xp gwh nd nd

p.

BrazilCBI Brazil forecast

RussiaRussian growth likely to soften in H2 2012R nmy h mnnd dy gwh n h fi

h h y, wh y m hwng 4.0% y-n

-y n GDP n Q2. A g p h n ngh n

gwh h m m nm pndng, whh h n

n vg nd 6.6% n md-2010. Spndng

h bn ndpnnd by b gwh n h b

mk, wh h nmpymn ny d w.

Lkng hd, m dn n gwh n ky. R

vnb dvpmn n h En, nd h

pp nd n wd ngy p wd

dp xp vn. Fhm, nfln ky

pk p n H2 2012, dyd n hng, pb

np nd y p m n ff. Indd, CPI

nfln jmpd n Jy (m 4.3% 5.6% n y g),

dvn by hp n hng & , nd h

n Ag ( 5.9%).

Sng p d d m h n ngh

n nm pndng, by ng n nm

nm. Indd, y-n-y gwh n d

mwh n Jy ( 5.1%, h w n Jny 2011).

Anh ky dvpmn R jnng h Wd

Td Ognn h nd Ag. Fm ng-m

ppv, h hd b nm pph

Wd Bnk h md n ddn $49bn y (

3% GDP) h nmy n h n-m, ng $162bn

n h mp n h nvmn m d n.

CBI Russia forecast


Household consumption 4.1 3.9 5.5

Fixed investment 4.7 -0.6 8.7



Imports 9.8 6.4 10.1

CPI inflation 6.6 5.4 6.1Unemploymen t rate (%) 6.0 5.7 5.7Government balance (% of GDP) -2.6 -1.6 -1.3Policy rate (%)* 11.0 7.5 9.1*end year


Household consumption 6.7 4.9 4.3

Fixed investment 8.0 8.2 5.3

Government consumption 1.5 -0.9 1.7


Imports 20.3 11.6 7.8

CPI inflation 8.4 5.5 7.4Unemploymen t rate (%) 6.6 5.7 5.5Government balance (% of GDP) 2.1 -1.0 -0.7Policy rate (%)* 8.0 8.0 8.7*end year


17/20


17

F v k gfi , k f .W g v, w k

x g

w . Hwv, g- f

j g j g .

I , f f

v k , v gwg (w,

, v ) v q. A

k k f g .

Food prices have risen...Ov , w USw

Mw w w g 50

v, g f f . S

f J, f 40% (g w

g f $8.49 gg f Ag),

f w 30%. T

ggg f f ,

v 2008- g f .

...which could have a much broader impacton other industriesT , w

f g . T f

w w f, w

f vk f, , f, . A

g f US ( 40%)

f . Gv US w q

f ,

g f , w w v w-

g . T

f

xg g g v f

w.

Oil prices are also picking up again...Af fg k w A J, v

g g, v

v $100 Ag. O

g, g fl ,

f EU US I f

gg f J. T w

I g g, gk x v

I g w k. I , I

v ff S f Hz,

k ww g f k. T , f

f k j g, gv

S g f 20% f g .

reflecting supply shortagesT I v ff

Global issues

Food prices ($/bushel, may 2012=100) Brent crude oil prices ($/barrel)

Commodities: Food and oil pricesthe only way is up?

80

85

90

95

100

105

110

115

120

125

130

Jan Feb Mar Apr May Jun Jul Aug80

90

100

110

120

130

140

May Jun Jul Aug

C orn Soy ab ea ns W hea t


18/20


18

w . D f US Eg If

A (EIA) w g f I

J J ( 2.8 ).

Ov, G S ff f

v v 1.4 / f

k. F, k

f w: S A w

g g g

v v 30 w OPEC (

f j ) w. F w

k g x f

g ( g ),

g ffi f ff.

Rising commodity prices present a furtherrisk to the outlookIf , f

g v g v

: g g f fi

g fi, g w

fl, g .

T f g g gw

gfi: IMF 10%

v ff 0.2% f g gw

fi f . C w g f ,

g. Egg

v g f , gv w

g

f; 2008 w g vg w.

...but recent rises appear temporaryT ff g

k f

.

F k k g

2008, gv v

fw . P f k

w, w

f . Uw f

g f x, f

f f w g

gw, xv, .

Sg v v

f f

w , wkg fl .

D k f gg

w . F f EIA w

2013.

F, v f

v w. I k

ff S f Hz, gv w

f w, w

g g . B v ,

g f j g g

f ; S A UAE v

ffv S.

and demand pressures remain subduedR f v v

. D f , gv

g gw . F f-

, g

k g f v

, w w f

. F x, w kg v f

, fi k k

f US.

Ev f g

, j g, w

k g . M v

g w f 2012, v

w gw C, w g .

However, short-term trends mask longer-term price volatilityI -, f, f

k . B kg g-

v, g w

x g ,

g f gg w

, ; x f

w q v; f

ff g

v.

Metals prices (January 2012=100)

80

90

100

110

120

130

140

Jan 2012 Feb Mar Apr May Jul Aug Sep

Aluminium Copper Tin Nickel


19/20


19

Notes


20/20

20


Further informationContact details

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