FOCUSECONOMICS
CONSENSUS FORECAST
Euro Area
Contents
Summary .................................... 2 Euro area ................................. 1 2 France ...................................... 2 1 Germany .................................. 2 9 Italy ........................................... 3 7 Spain ........................................ 4 5 Austria ..................................... 5 3 Belgium .................................... 5 9 Finland ..................................... 6 5 Greece ..................................... 7 1 Ireland ...................................... 7 7 Netherlands ............................ 8 3 Portugal ................................... 8 9 Slovakia ................................... 9 5 Slovenia ................................. 101 Cyprus ................................... 107 Luxembourg .......................... 109 Malta ....................................... 111 Notes ....................................... 113 Order Form ............................. 114
November 2010
Publication date: 2 November 2010 Information available: up to and including 31 October Forecasts collected: 26 - 29 October 2010 Next edition: 30 November 2010
Arne Pohlman Chief Economist Armando Ciccarelli Senior Economist
Gerardo Morán Senior Economist Ricardo Aceves Economist
Marcos Felipe Casarin Economist Joan Enric Domene Economist
© FocusEconomics 2010 ISSN 2013-9284
Economic Forecasts from the World’s Leading Economists
Gran Via 657 E-08010 Barcelona, Spain Phone: +34 932 651 040 Fax: +34 932 650 804
[email protected] www.focus-economics.com
FOCUSECONOMICS
Summary
November 2010
Summary
Strong Euro Clouds Outlook
•
Euro area
In Portugal, a budget crisis was averted when the minority government reached an agreement with the opposition on how to further reduce the fiscal deficit in 2011. However, concerns about the fiscal consolidation process in the Eurozone’s periphery persist. Moreover, the European Council agreed on a new crisis-prevention mechanism that will also involve the private sector in sharing the burden of rescuing insolvent countries, which is likely to push borrowing costs for countries at risk even higher. Meanwhile, recent economic data reports were mixed but, on balance, still positive, as resilient figures for Germany compensated for weaker numbers in Southern Europe. However, sluggish growth in the United States and Japan as well as the strengthening euro are raising doubts about the strength of the recovery going forward. Consensus Forecast panellists have raised their 2010 GDP growth forecast for the Euro area by 0.1 percentage points over last month to the current 1.6%, the fourth consecutive month of improving prospects. For 2011, panellists expect the Eurozone economy to expand by 1.4%. Inflation forecasts for 2010 remained unchanged at last month’s 1.5%. Moreover, forecasts for 2011 also remain contained at 1.6%, providing the European Central Bank with sufficient time to reach an agreement on exiting from the controversial bond purchase programme.
•
• Arne Pohlman
Chief Economist
Forecast Changes over last Month
Change in 2010 GDP Growth Forecast
Finland Slovenia Germany Portugal Malta Slovakia Luxembourg Netherlands Austria Euro area Cyprus Belgium France Ireland Italy Spain Greece -0.1 0.0 0.1 0.2 0.3
Change in 2010 Inflation Forecast
Ireland Greece Portugal Belgium Austria Germany Euro area Spain Finland Italy Slovakia Malta France Cyprus Luxembourg Netherlands Slovenia -0.2 -0.1 0.0 0.1 0.2 0.3 0.4
Note: Change between November and October 2010 in percentage points. Source: FocusEconomics Consensus Forecast.
Note: Change between November and October 2010 in percentage points. Source: FocusEconomics Consensus Forecast.
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Summary
November 2010
Current Developments On 29 October, leaders of the European Union member states agreed on an amendment of the Lisbon Treaty, creating a new permanent crisis-prevention mechanism aimed at avoiding the repetition of a Greek-style sovereign debt crisis. According to a preliminary estimate, inflation inched up from 1.8% in September to 1.9% in October. On 26 October, the French parliament approved a plan to reform the pension system, which raises the retirement age by two years. The reform triggered a wave of nationwide protests and strikes in the oil sector that brought oil refining and distribution to a virtual standstill. Nonetheless, Finance Minister Christine Lagarde stated that the consequences of protests will not alter the government’s economic growth forecast for this year. Inflation rose from 1.4% in August to 1.6% in September. Recent data suggest that the recovery shows no signs of cooling. In August, industrial production grew 1.7% month-on-month, exceeding even upbeat market expectations. Moreover, unemployment fell below 3 million in October, the lowest level in 18 years, buttressing consumer confidence and supporting household consumption. In addition, business confidence jumped to a new record high, bolstering the notion of accelerating domestic demand in the months ahead. In October, annual inflation remained unchanged at 1.3%, according to preliminary estimates. On 14 October, the government approved the draft budget for next year. The budget paves the way for a series of spending cuts and tax increases, totalling EUR 25 billion, which were already approved by the parliament during the summer, including a wage-freeze in the public sector. Preliminary data for October show inflation inching up from September’s 1.6% to 1.7%. The economic recovery remains fragile, even though the government’s commitment to cut the fiscal deficit to 6.0% of GDP in 2011 should restore some confidence in the country’s public finances. Meanwhile, labour market figures improved for the first time since the third quarter of 2007, as the unemployment rate fell from 20.1% in the second quarter to 19.8% in the third. Preliminary figures show that inflation rose from 2.0% in September to 2.2% in October. Industrial production rebounded in August, expanding 8.2% over the same month last year. Additional economic indicators point to a resilient recovery, suggesting that the economy is back on track, favoured by a strong external sector, which benefits from healthy growth in the country’s main trade partner, Germany. Inflation rose from 1.7% in August to 1.9% in September. Preliminary estimates confirm that the recovery is gaining steam, as gross domestic product rose 0.5% in the third quarter. In particular, the industrial sector is picking up, with output rising 7.1% annually in August, which marked the sixth consecutive month of growth. Inflation rose from 2.9% in September to 3.0% in October, which marked the highest level since November 2008. Indicators across the board point towards sustained growth in the coming quarters, as the recovery in the external sector is filtering to the domestic economy. That said, growth is expected to decelerate compared to the strong 1.9% quarter-on-quarter expansion tallied in the second quarter. In September, harmonised consumer price inflation increased a notch to 1.4%.
Forecasts 2010 2011
GDP
1.6 ↑
1.4 =
Euro area
Inflation
1.5 =
1.6 =
GDP
1.6 ↑
1.5 =
France
Inflation
1.6 ↓
1.5 ↓
GDP
3.3 ↑
2.2 ↑
Germany
Inflation
1.1 =
1.4 =
GDP
1.1 ↑
1.1 =
Italy
Inflation
1.6 =
1.7 =
GDP
-0.4 =
0.4 =
Spain
Inflation
1.6 =
1.4 =
GDP
1.7 ↑
1.7 =
Austria
Inflation
1.5 =
1.6 =
GDP
1.8 ↑
1.6 ↓
Belgium
Inflation
1.9 ↑
1.8 ↑
GDP
2.4 ↑
2.5 =
Finland
Inflation
1.3 =
2.0 =
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Summary
November 2010
Current Developments (continued)
Forecasts 2010 2011
Greece
On 4 October, the government presented the budget draft for 2011, which aims at reducing the fiscal deficit to 7.0% of GDP next year, following on an estimated 7.8% of GDP deficit this year. Final numbers for the 2009 deficit will be published by 15 November. The final deficit number is expected to be corrected from the current 13.6% of GDP to 15.5% of GDP. Inflation rose from 5.5% in August to 5.6% in September. On 6 October, international credit rating agency Fitch downgraded Ireland’s rating from A+ to AA-, as the cost of the Irish banking sector bailout is expected to weigh heavily on the country’s finances going forward. Inflation swung from minus 0.1% in July to a positive 0.2% in August. In August, the country continued to benefit from strong growth in the industrial sector, with output expanding 7.3% annually. Moreover, additional data confirm the healthy state of the economy, with unemployment at the lowest level in over a year. Inflation rose a notch from 1.5% in August to 1.6% in September. Government and opposition reached an agreement on the draft budget for 2011 after bond markets reacted nervously to the political stalemate, pushing borrowing costs to a temporary high on 29 October. Meanwhile, industrial production continued to recover in August, exiting negative territory for the first time in two years. In September, inflation remained unchanged at August’s 2.0%, which represents the highest level since October 2008.
GDP
-3.8 =
-2.2 ↓
Inflation
4.3 ↑
1.8 ↑
GDP
-0.3 ↑
1.4 ↓
Ireland
Inflation
-0.9 ↑
0.7 =
GDP
1.9 ↑
1.7 =
Netherlands
Inflation
1.0 =
1.3 ↓
GDP
1.3 ↑
-0.1 ↓
Portugal
Inflation
1.2 =
1.4 ↑
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Summary
November 2010
Quarterly Data | Economic Growth and Inflation | Q1 2009 - Q4 2011
Gross domestic product yoy var. in % Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area 2009 Q1 -5.4 -3.7 0.6 -9.1 -3.9 -6.6 -1.0 -9.2 -6.5 -5.4 -1.5 -4.5 -3.8 -5.7 -8.4 -3.5 -5.2 Q2 -5.7 -4.1 -1.8 -9.7 -3.1 -5.5 -1.9 -7.8 -6.2 -8.1 -2.9 -5.3 -3.1 -5.5 -9.4 -4.4 -4.9 Q3 -3.6 -2.7 -2.7 -8.1 -2.7 -4.4 -2.5 -7.4 -4.7 -3.1 -1.8 -3.7 -2.3 -4.9 -8.8 -3.9 -4.0 Q4 -0.9 -0.1 -2.9 -5.2 -0.5 -2.0 -2.5 -5.8 -2.8 2.1 1.8 -2.2 -1.0 -2.6 -5.7 -3.0 -2.0 Q1 0.0 1.7 -1.3 0.0 1.2 2.0 -2.3 -0.8 0.5 2.8 4.2 0.6 1.8 4.8 -1.1 -1.3 0.8 Q2 2.4 2.6 0.5 3.7 1.7 3.7 -3.7 -1.8 1.3 5.3 3.9 2.2 1.5 4.7 2.2 -0.1 1.9 2010 Q3 2.3 2.1 3.8 1.8 3.7 -4.5 0.9 1.1 2.3 1.1 2.9 1.8 -0.1 1.8 Q4 2.3 1.4 4.2 1.5 3.9 -4.5 0.5 1.2 2.1 1.3 2.7 1.0 0.1 2.0 Q1 2.6 1.7 4.0 1.6 3.8 -4.1 1.1 1.2 1.7 0.2 3.0 2.5 0.1 1.9 Q2 1.7 1.3 3.0 1.3 1.9 -2.6 1.5 1.1 1.3 0.0 3.0 2.3 0.1 1.2 2011 Q3 1.3 1.4 2.6 1.3 1.7 -1.5 2.0 1.1 1.4 0.0 3.5 1.5 0.6 1.1 Q4 1.3 1.4 2.3 1.4 1.6 -0.4 1.0 1.3 1.4 -0.7 3.6 3.3 1.0 1.2
GDP, yoy var. in %
8 Euro area Italy 4 France Netherlands Germany Spain 4 6
Inflation, yoy var. of quarterly avg. CPI in %
Euro area Italy France Netherlands Germany Spain
0
2
-4
0
-8 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11
-2 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11
Inflation, yoy var. of quarterly avg. CPI in % Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
2009 Q1 1.1 1.6 1.0 2.4 0.7 0.8 1.8 0.2 1.4 0.2 3.5 2.2 0.0 3.4 1.9 0.5 1.0 Q2 0.1 -0.2 0.5 1.7 -0.2 0.3 0.8 -1.6 0.9 -0.7 3.4 2.1 -1.1 2.2 1.0 -0.7 0.2 Q3 -0.1 -1.2 -1.0 1.2 -0.5 -0.2 0.8 -2.6 0.1 -0.7 0.9 1.3 -1.6 1.2 0.1 -1.0 -0.4 Q4 0.6 -0.2 0.9 1.2 0.4 0.4 2.0 -2.8 0.7 1.3 -0.3 1.0 -0.7 0.7 0.8 0.2 0.4 Q1 1.3 1.2 2.5 1.5 1.5 0.8 3.0 -2.4 1.3 2.8 0.9 0.6 0.3 0.8 1.5 1.2 1.1 Q2 1.8 2.4 2.0 1.4 1.8 1.1 5.1 -2.1 1.6 2.8 0.4 1.0 1.2 1.3 1.6 1.5
2010 Q3 1.7 2.6 3.1 1.3 1.6 1.2 5.6 -1.2 1.7 2.7 0.7 0.6 2.0 1.8 1.9 1.7 Q4 1.8 2.4 1.8 1.6 1.4 4.8 -0.8 1.7 1.3 2.9 2.1 2.2 2.0 1.8 Q1 1.8 2.1 2.1 1.4 1.4 4.2 -0.1 1.6 1.4 1.4 2.5 2.3 1.9 1.8 Q2 1.6 1.8 2.0 1.4 1.4 2.2 0.4 1.5 1.0 1.4 3.2 2.2 1.6 1.6
2011 Q3 1.8 2.0 2.1 1.6 1.5 0.7 0.6 1.6 1.5 1.3 3.3 1.9 1.2 1.6 Q4 1.7 2.1 2.1 1.7 1.5 0.6 0.9 1.7 1.4 1.4 3.4 2.1 1.3 1.6
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Gross Domestic Product, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
4 2008 2 2009
Summary
November 2010 GDP Growth, 2010
2008 2.2 1.0 3.6 0.9 0.2 1.0 2.0 -3.5 -1.3 0.0 1.7 1.9 0.0 6.4 3.7 0.9 0.6
2009 -3.9 -2.8 -1.7 -8.0 -2.5 -4.7 -2.0 -7.6 -5.1 -3.4 -1.5 -3.9 -2.6 -4.7 -8.1 -3.7 -4.1
2010 1.7 1.8 -0.1 2.4 1.6 3.3 -3.8 -0.3 1.1 2.2 1.5 1.9 1.3 3.4 1.1 -0.4 1.6
2011 1.7 1.6 1.4 2.5 1.5 2.2 -2.2 1.4 1.1 2.5 1.9 1.7 -0.1 3.4 2.1 0.4 1.4
2012 2.0 1.9 2.6 1.8 1.9 1.0 2.4 1.2 1.8 1.0 3.9 3.1 1.3 1.6
2013 2.0 2.1 2.5 1.8 1.9 1.8 2.8 1.4 2.0 1.5 4.2 3.2 1.7 1.8
2014 2.0 2.0 2.4 2.0 2.1 2.0 3.0 1.4 2.0 1.6 4.2 3.3 1.9 1.8
Slovakia Germany Finland Luxembourg Netherlands Belgium Austria Euro area France Malta Portugal Italy Slovenia Cyprus Ireland Spain Greece -4 -2 0 2 4
Notes and sources
2010 2011
Note: Gross domestic product, real annual variation in %. Sources: National statistical institutes and Eurostat.
0
-2
-4
-6 Euro area France Germany Italy Spain Netherlands
GDP per capita, EUR
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
40,000 2008 35,000 2009 2010 2011
GDP per capita, 2010
2012 35,760 34,404 35,727 32,731 32,439 21,278 32,352 26,930 37,729 16,537 13,830 19,279 23,206 29,260 2013 36,983 35,513 37,074 33,679 33,587 21,785 33,200 27,714 38,951 16,954 14,612 20,473 23,761 30,127 2014 38,255 36,630 38,424 34,741 34,873 22,416 34,209 28,533 40,237 17,428 15,423 21,829 24,406 31,040
Netherlands Austria Finland Belgium Ireland France Germany Euro area Italy Spain Cyprus Greece Slovenia Portugal Malta Slovakia 10,000 17,500 25,000 32,500 40,000
2008 33,957 32,378 21,853 34,752 31,227 30,218 21,311 37,169 26,298 81,332 13,839 36,166 16,200 11,824 19,620 23,582 28,195
2009 32,802 31,609 21,266 32,088 30,574 29,222 21,073 32,764 25,401 76,505 13,830 34,705 15,800 11,520 16,190 22,487 27,258
2010 33,669 32,543 21,153 33,034 31,067 30,209 21,088 31,721 25,616 78,681 14,308 35,591 16,094 12,436 17,523 22,576 27,767
2011 34,639 33,407 21,606 34,338 31,824 31,328 20,927 31,741 26,233 80,739 14,827 36,558 16,250 13,066 18,267 22,799 28,470
Notes and sources
Note: GDP per capita in current EUR. Chart excludes Luxembourg due to methodological inconsistencies. Sources: National statistical institutes, central banks and Eurostat.
30,000
25,000
20,000 Euro area France Germany Italy Spain Netherlands
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Private Consumption, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
2
Summary
November 2010 Private Consumption Growth, 2010
2008 0.7 1.5 8.4 1.7 0.6 0.7 2.3 -1.5 -0.8 3.2 5.1 1.1 1.8 6.1 3.0 -0.6 0.4
2009 0.4 -0.3 -3.0 -1.9 0.6 -0.2 -1.8 -7.0 -1.8 -0.7 1.3 -2.5 -1.0 -0.7 -0.6 -4.3 -1.1
2010 0.9 1.3 -1.5 2.1 1.4 0.1 -3.5 -0.9 0.5 1.0 1.1 0.5 1.5 0.5 -0.2 0.8 0.7
2011 1.0 1.1 1.8 1.9 1.2 1.2 -3.6 1.1 0.7 2.2 1.9 1.0 -0.4 1.9 1.9 0.1 0.9
2012 1.5 1.7 2.2 1.6 1.2 0.0 2.1 1.1 1.3 0.5 3.6 2.2 1.1 1.3
2013 1.7 2.0 2.4 2.0 1.6 0.6 2.4 1.5 1.6 1.3 4.0 2.9 1.4 1.7
2014 1.7 1.9 2.5 2.2 1.7 1.6 2.8 1.6 1.7 1.5 4.3 3.0 1.7 1.8
Finland Portugal France Belgium Malta Luxembourg Austria Spain Euro area Slovakia Italy Netherlands Germany Slovenia Ireland Cyprus Greece -4 -2 0 2 4
Notes and sources
Note: Private consumption. Sources: National statistical institutes and Eurostat.
0
-2
-4 2008 -6 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
Investment, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
6
Investment Growth, 2010
2013 3.7 3.3 4.3 3.5 3.9 3.5 4.0 2.6 3.1 2.9 5.0 4.3 2.8 3.2 2014 3.5 2.9 4.2 3.7 4.0 3.8 3.4 2.9 3.3 3.0 4.9 4.5 3.1 3.2
Malta Germany Slovakia Luxembourg Italy Finland Euro area Belgium Austria France Netherlands Portugal Slovenia Cyprus Spain Greece Ireland -18 -12 -6 0 6
2008 1.0 2.9 8.6 -0.4 0.1 2.5 -7.4 -14.3 -4.0 -0.1 -21.7 5.1 -1.8 1.8 8.5 -4.8 -1.0
2009 -8.1 -5.3 -12.0 -14.7 -7.1 -10.1 -13.9 -31.0 -12.2 -14.9 -18.8 -12.7 -11.9 -10.5 -21.6 -16.0 -11.3
2010 -1.8 -1.2 -6.3 0.6 -1.9 5.4 -10.8 -17.0 1.5 1.6 5.6 -3.2 -3.9 2.3 -4.4 -7.2 -0.5
2011 1.9 2.4 -0.3 4.6 2.2 3.6 -5.5 0.5 1.3 3.8 5.7 3.7 -2.6 3.6 4.5 -1.5 2.2
2012 3.2 3.1 4.8 3.0 2.9 1.9 2.8 2.0 2.8 2.1 5.3 3.9 2.0 2.8
Notes and sources
Note: Gross fixed investment, real annual variation in %. Sources: National statistical institutes and Eurostat.
0
-6
-12 2008 -18 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
FocusEconomics Consensus Forecast Euro Area
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FOCUSECONOMICS
Industrial Production, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
16
Summary
November 2010 Industrial Production Growth, 2010
2008 1.3 -0.8 -0.1 0.8 -2.7 0.6 -4.0 -2.2 -3.5 -5.3 -6.3 1.5 -4.1 7.4 2.5 -7.1 -1.8
2009 -9.3 -12.1 -7.5 -18.0 -12.1 -15.5 -9.2 -4.5 -17.5 -15.8 1.5 -7.4 -8.1 -13.1 -17.4 -16.2 -14.8
2010 4.8 3.0 -2.1 6.8 5.2 9.2 -4.1 -2.1 5.7 4.8 1.6 6.8 1.4 17.0 3.7 0.5 5.2
2011 3.8 2.0 4.6 5.4 2.9 3.6 -0.1 0.8 2.4 3.1 1.7 2.6 1.1 7.5 3.5 0.9 2.5
2012 3.7 3.2 4.8 3.2 2.7 2.6 4.2 2.1 2.4 1.7 6.6 4.0 2.7 2.4
2013 3.4 3.9 4.5 3.6 3.2 3.6 4.6 1.7 2.8 1.8 7.0 3.9 2.6 2.7
2014 3.5 3.5 4.8 3.7 3.3 3.0 4.9 1.7 2.9 1.7 6.4 3.9 2.8 2.9
Slovakia Germany Finland Netherlands Italy Euro area France Austria Luxembourg Slovenia Belgium Malta Portugal Spain Cyprus Ireland Greece -5 0 5 10 15 20
Notes and sources
Note: Industrial production, real annual variation in %. Sources: National statistical institutes and Eurostat.
8
0
-8
-16 2008 -24 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
Unemployment, % of active population
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
21 18 2008 15 12 9 6 3 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
Unemployment, 2010
2013 4.5 8.0 7.3 9.0 6.6 13.1 11.3 8.1 4.7 10.5 10.6 5.6 17.8 9.6 2014 4.4 7.7 7.1 8.6 6.3 12.9 10.7 7.7 4.6 10.1 10.3 5.3 16.8 9.2
Spain Slovakia Ireland Greece Portugal Euro area France Belgium Italy Finland Germany Slovenia Malta Cyprus Luxembourg Netherlands Austria 0 6 12 18 24
2008 3.8 7.0 3.6 6.4 7.8 7.8 7.7 6.3 6.8 4.4 5.9 3.9 7.6 8.7 4.3 11.3 7.6
2009 4.8 7.9 5.3 8.2 9.4 8.2 9.4 11.8 7.8 5.7 6.9 4.9 9.5 13.9 6.4 18.0 9.4
2010 4.5 8.7 6.3 8.5 9.9 7.7 12.2 13.7 8.5 5.9 7.1 5.5 10.9 14.3 7.4 20.1 10.1
2011 4.3 8.7 6.4 8.0 9.8 7.3 14.1 13.6 8.6 5.7 7.0 5.3 11.2 13.5 6.8 20.3 10.1
2012 4.4 8.2 7.6 9.5 7.0 13.6 12.1 8.1 4.9 10.8 11.8 6.3 18.9 9.7
Notes and sources
Note: Average unemployment rate for the year. Sources: National statistical institutes and Eurostat.
FocusEconomics Consensus Forecast Euro Area
| 8
FOCUSECONOMICS
Fiscal Balance, % of GDP
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
5 2008 0 2009 2010 2011
Summary
November 2010 Fiscal Balance, 2010
2008 -0.4 -1.2 0.9 4.2 -3.3 0.0 -7.7 -7.3 -2.7 2.9 -4.5 0.7 -3.0 -2.3 -1.7 -4.1 -2.0
2009 -3.4 -6.0 -6.1 -2.2 -7.5 -3.1 -13.6 -14.3 -5.3 -0.7 -3.8 -5.3 -9.3 -6.8 -5.5 -11.2 -6.3
2010 -4.5 -5.0 -6.8 -3.4 -7.7 -4.2 -8.6 -19.3 -5.0 -3.3 -4.2 -6.1 -7.7 -7.4 -5.9 -9.4 -6.3
2011 -4.0 -4.5 -7.0 -2.4 -6.3 -3.4 -7.6 -13.6 -4.3 -3.3 -3.8 -4.6 -6.0 -5.6 -4.4 -7.0 -5.2
2012 -3.2 -3.8 -1.4 -5.1 -2.8 -5.5 -7.9 -3.7 -3.9 -4.4 -3.9 -3.4 -5.7 -4.2
2013 -2.3 -3.3 -1.4 -3.6 -2.2 -3.4 -7.1 -3.5 -3.3 -3.6 -2.6 -2.3 -4.6 -3.3
2014 -2.1 -3.1 -1.6 -3.0 -1.8 -2.5 -6.1 -3.2 -3.0 -3.7 -2.2 -1.9 -3.6 -2.7
Luxembourg Finland Malta Germany Austria Belgium Italy Slovenia Netherlands Euro area Cyprus Slovakia France Portugal Greece Spain Ireland -20 -15 -10 -5 0
Notes and sources
Note: Fiscal balance as % of GDP. Sources: National statistical institutes, finance ministries and Eurostat.
-5
-10
-15 Euro area France Germany Italy Spain Netherlands
Public Debt, % of GDP
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
125 2008 100 2009 2010 2011
Public Debt, 2010
2012 74.5 102.6 51.9 89.3 77.4 147.0 98.6 121.0 69.3 91.7 76.4 88.6 2013 75.5 102.7 53.1 87.6 79.3 147.6 99.2 121.7 69.6 93.6 79.1 89.0 2014 75.7 102.4 53.5 87.3 79.8 150.7 102.2 121.7 70.6 95.4 80.3 89.1
Greece Italy Belgium Euro area Ireland Portugal France Germany Malta Austria Netherlands Spain Cyprus Finland Luxembourg 0 25 50 75 100 125 150
2008 62.6 89.8 48.4 34.2 67.5 66.0 99.2 43.9 106.3 13.7 63.7 58.2 65.3 27.7 22.6 39.7 69.4
2009 66.5 96.8 56.2 44.0 77.6 73.2 115.1 64.0 116.0 14.5 69.1 60.9 76.1 35.7 35.7 53.2 78.7
2010 70.5 99.6 62.1 49.3 83.1 78.6 132.4 83.4 118.5 18.7 70.7 65.2 83.2 64.9 85.3
2011 72.8 100.9 66.4 51.8 87.9 79.9 141.5 98.6 119.6 21.1 71.8 68.3 88.7 72.0 88.4
Notes and sources
Note: Public debt as % of GDP. Sources: National statistical institutes, finance ministries and Eurostat.
75
50
25 Euro area France Germany Italy Spain Netherlands
FocusEconomics Consensus Forecast Euro Area
| 9
FOCUSECONOMICS
Summary Inflation, 2010
2014 1.8 1.9 1.7 1.8 1.6 1.2 1.9 2.0 1.6 1.6 2.6 2.7 1.7 1.7
Greece Cyprus Luxembourg Malta Belgium Slovenia Spain France Italy Austria Euro area Finland Slovakia Portugal Germany Netherlands Ireland -2 0 2
November 2010
Inflation, annual average variation of consumer prices in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
6 2008 4 2009 2010 2011
2008 3.2 4.5 4.4 3.9 3.2 2.6 4.2 3.1 3.5 4.1 4.6 2.2 2.6 4.6 5.7 4.1 3.3
2009 0.4 0.0 0.2 1.6 0.1 0.3 1.3 -1.7 0.8 0.0 1.7 1.0 -0.9 1.6 0.9 -0.2 0.3
2010 1.5 1.9 2.6 1.3 1.6 1.1 4.3 -0.9 1.6 2.4 1.9 1.0 1.2 1.2 1.7 1.6 1.5
2011 1.6 1.8 2.4 2.0 1.5 1.4 1.8 0.7 1.7 1.9 2.1 1.3 1.4 2.6 2.2 1.4 1.6
2012 1.7 1.9 2.0 1.7 1.5 1.1 1.4 1.9 1.7 1.1 3.0 2.3 1.3 1.7
2013 1.8 1.8 1.7 1.7 1.6 0.9 1.7 1.9 1.5 1.5 2.6 2.5 1.5 1.7
4
6
Notes and sources
Note: Annual average variation of consumer prices in %. Cyprus, Germany, Portugal, Slovakia and Slovenia refer to national consumer price indices (CPI). All other countries are based on harmonised index of consumer prices (HICP). Sources: National statistical institutes, central banks and Eurostat.
2
0
-2 Euro area France Germany Italy Spain Netherlands
10-year Bond Rate, %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
5 2008 2009 2010 2011
10-year Bond Rate, 2010
2012 4.3 3.5 3.6 4.0 3.2 5.4 5.6 4.4 5.0 3.4 5.1 4.7 3.6 2013 4.4 3.9 3.9 5.2 3.7 5.5 6.3 5.1 4.9 3.8 5.2 4.9 4.0 2014 4.4 4.4 4.3 5.2 4.2 5.6 6.5 5.5 4.9 3.9 4.9 4.9 3.9
Portugal Greece Cyprus Malta Spain Ireland Italy Austria Belgium Finland France Germany Netherlands Euro area 2 3 4 5 6
2008 4.3 4.4 4.6 3.7 3.4 2.9 5.1 4.6 4.5 4.8 3.6 4.0 3.9 3.9
2009 3.9 3.9 4.6 3.6 3.6 3.3 5.5 4.9 4.1 4.5 3.4 3.9 3.8 3.9
2010 3.0 3.0 4.6 3.0 2.8 2.6 4.6 4.1 3.7 4.2 2.6 5.3 4.2 2.3
2011 3.4 3.4 4.9 3.5 3.2 3.2 4.7 4.6 4.0 5.1 3.3 4.9 4.5 3.1
Notes and sources
Note: 10-year bond rate in %, end of period. Sources: National central banks and European Central Bank (ECB).
4
3
2 Euro area France Germany Italy Spain Netherlands
FocusEconomics Consensus Forecast Euro Area
| 10
FOCUSECONOMICS
Current Account Balance, % of GDP
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
10 2008 5 2009
Summary
November 2010 Current Account Balance, 2010
2008 3.3 -2.9 -17.7 2.9 -2.3 6.7 -14.6 -5.2 -3.6 5.3 -5.6 4.6 -11.6 -6.5 -6.1 -9.7 -1.7
2009 2.3 0.3 -7.9 2.7 -1.9 4.9 -11.2 -2.9 -3.2 6.8 -3.9 5.0 -10.0 -3.2 -1.0 -5.5 -0.8
2010 2.7 1.3 -7.7 1.6 -2.0 5.1 -9.9 -0.5 -3.2 4.6 -5.7 6.0 -9.6 -3.1 -1.0 -4.5 -0.4
2011 3.0 1.3 -7.3 1.8 -1.9 5.3 -7.9 0.1 -2.7 5.0 -6.2 5.7 -8.5 -3.2 -1.7 -3.5 -0.1
2012 2.4 0.8 1.8 -2.2 5.1 -5.2 0.6 -2.6 5.5 -7.9 -3.8 -1.4 -3.7 0.2
2013 2.4 1.9 1.9 -1.9 4.6 -3.6 -0.5 -2.5 5.8 -7.6 -3.7 -1.0 -3.6 0.2
2014 2.2 2.3 1.9 -1.9 4.5 -3.4 -0.5 -2.3 5.7 -7.0 -3.5 -1.0 -3.6 0.3
Netherlands Germany Luxembourg Austria Finland Belgium Euro area Ireland Slovenia France Slovakia Italy Spain Malta Cyprus Portugal Greece -12 -8 -4 0 4 8
Notes and sources
2010 2011
Note: Current account balance as % of GDP. Sources: National statistical institutes and Eurostat.
0
-5
-10 Euro area France Germany Italy Spain Netherlands
Exports, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
20
Export Growth, 2010
2012 10.6 4.4 9.3 7.7 8.8 6.9 3.6 7.0 7.8 5.5 10.2 6.3 8.6 7.4 2013 9.0 3.1 9.6 7.0 8.2 5.1 3.1 6.9 6.7 7.4 7.4 3.9 8.8 7.5 2014 6.6 3.0 8.1 6.4 7.8 6.3 2.1 5.8 5.0 7.6 7.4 2.9 7.5 7.0
Germany Netherlands Slovakia Spain France Euro area Finland Austria Belgium Slovenia Italy Luxembourg Cyprus Greece Portugal Ireland Malta -5 0 5 10 15 20
2008 2.3 2.0 9.9 -0.2 2.8 0.7 13.6 -3.1 1.1 8.1 -4.0 6.8 1.7 13.3 1.9 3.7 3.8
2009 -19.9 -17.3 -19.1 -31.3 -17.5 -18.4 -22.7 -4.3 -20.9 -23.1 -11.5 -17.0 -18.7 -16.4 -19.6 -15.9 -18.3
2010 9.7 8.9 4.6 9.8 10.8 16.9 3.9 3.0 8.2 6.6 -0.3 12.4 3.0 11.0 8.4 11.0 10.4
2011 8.2 6.0 8.4 8.2 6.5 9.8 6.2 3.3 6.0 7.1 6.7 6.2 5.0 11.9 16.0 6.4 7.7
Notes and sources
Note: Nominal annual variation in % of merchandise exports. Sources: National statistical institutes and Eurostat.
10
0
-10
-20 2008 -30 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
FocusEconomics Consensus Forecast Euro Area
| 11
FOCUSECONOMICS
Imports, annual variation in %
Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Euro area
25
Summary
November 2010 Import Growth, 2010
2008 4.0 5.6 15.9 3.8 5.3 3.5 8.3 -10.3 2.6 11.5 -2.8 9.1 7.1 13.3 6.1 0.6 8.4
2009 -18.5 -20.3 -23.2 -29.0 -17.8 -17.2 -27.8 -21.4 -21.9 -24.6 -16.5 -17.7 -20.2 -20.1 -26.1 -26.2 -21.6
2010 8.9 8.3 2.6 8.7 8.3 16.1 -2.8 0.7 7.3 1.5 7.6 14.1 2.0 12.4 9.1 8.2 10.4
2011 7.2 5.7 5.5 7.8 6.2 9.4 -5.5 2.4 4.7 3.1 7.1 6.3 4.0 11.6 16.7 3.0 6.7
2012 9.0 4.6 9.6 8.2 8.6 2.6 4.1 6.3 7.4 4.1 11.2 6.4 6.6 6.5
2013 8.6 4.6 11.4 7.5 8.5 3.6 3.0 7.7 5.3 3.4 8.2 3.0 5.3 7.1
2014 6.0 4.4 8.4 6.0 8.7 4.4 3.9 5.7 4.5 5.1 7.4 3.2 6.3 6.6
Germany Netherlands Slovakia Euro area Slovenia Austria Finland Belgium France Spain Malta Italy Cyprus Portugal Luxembourg Ireland Greece -5 0 5 10 15 20
Notes and sources
Note: Nominal annual variation in % of merchandise imports. Sources: National statistical institutes and Eurostat.
0
-25 2008 -50 Euro area France Germany Italy Spain Netherlands 2009 2010 2011
FocusEconomics Consensus Forecast Euro Area
| 12
FOCUSECONOMICS
Euro area
November 2010
Euro area
Euro area
Outlook improves
• On 29 October, leaders of the European Union member states agreed on an amendment to the Lisbon Treaty, creating a new permanent crisis-prevention mechanism aimed at avoiding the repetition of a Greek-style sovereign debt crisis. The second GDP estimate confirmed that the economy expanded 1.0% in the second quarter. The result represented the fastest pace in four years. On the back of the positive result, Consensus Forecast panellists upgraded their growth forecast by 0.1 percentage points and now see the economy expanding 1.6% in 2010. For 2011, the panel sees economic growth reaching 1.4%, which is unchanged from last month’s forecast. According to a preliminary estimate, inflation inched up from 1.8% in September to 1.9% in October. Panellists expect inflation to average 1.5% this year, which is unchanged from last month’s projection. In 2011, the panel expects inflation to inch up to 1.6%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 318 7,316 23,025 1.9 -2.1 68.8 2.2 -0.1 2005-09 327 8,791 26,891 0.8 -2.5 70.5 2.0 -0.5 2010-14 335 9,824 29,333 1.7 -4.3 88.1 1.7 0.0
•
•
Armando Ciccarelli
Senior Economist
FISCAL POLICY | European Commission unveils new set of fiscal rules On 29 October, the European Council agreed to amend the Lisbon Treaty and create a new permanent crisis-prevention mechanism, aimed at maintaining financial stability in the region. The proposed new mechanism will entail the creation of a permanent “bail-out” facility, providing support to countries hit by a Greek-style debt crisis in the future. The new facility will replace the existing EUR 750 billion IMF-backed temporary fund (the so-called European Stabilisation Mechanism), which was created in May in the wake of the Greek crisis and which will expire in 2013.
90
Fiscal Deficit vs Public Debt | % of GDP
8
Fiscal Deficit
6
Public Debt
80
4
%
70
%
2
Moreover, according to the new provisions, an “orderly default” process should be implemented, in a way that will also involve the private sector (i.e. bondholders) in sharing the burden of rescuing insolvent countries. The proposals will require the modification of the existing Lisbon Treaty, as they go against the so-called “no bail-out” clause. Details on how to implement treaty changes will be discussed in the coming months and should be ready for the next meeting of the European Council in December. In addition, EU leaders agreed on a set of measures aimed at tightening budget rules for EU countries. According to the new set of rules, sanctions for countries exceeding the deficit (3% of GDP) and debt thresholds (60% of GDP) set in the Stability and Growth Pact (SGP) will be punished at an earlier stage in the surveillance process, compared to the existing framework. Moreover, EU leaders stressed that stronger attention should be paid to the debt criterion, in addition to the current focus on the deficit criterion. Finally, member states will be also assessed on a “scoreboard” of internal and external macroeconomic indicators in order to assess risks stemming from
0 1995 1999 2003 2007 2011 2015
60
Note: Annual fiscal deficit and public debt as percentage of GDP. Source: Eurostat and FocusEconomics Consensus Forecast.
FocusEconomics Consensus Forecast
| 13
FOCUSECONOMICS
Euro area
November 2010
Gross Domestic Product | variation in %
2.0 1.0 0.7 0.4 0.2 0.3 0.4 0.3
divergences among EU members. Countries with “serious imbalances” will be put in a so-called “excessive imbalances position”, ultimately leading to sanctions in case of persistent imbalances. REAL SECTOR | Second estimate confirms Q2 growth Second estimates for GDP growth published on 6 October confirmed that, in the second quarter, the economy expanded 1.0% over the first quarter as previously reported. The reading came in line with market expectations and marked the strongest quarterly reading since the second quarter of 2006. On an annual basis, the Euro zone economy expanded 1.9%, the strongest annual result since the second quarter of 2008. The second GDP release reflected a deterioration in the contribution to growth of domestic demand, while the contribution from the external sector improved from the previous estimate. Private consumption expanded 0.2% over the previous quarter, which was down from the initial 0.5% estimate, while gross fixed investment rose 1.5%, down from the earlier 1.8% estimate. That said, a larger contribution from inventories helped offset slower growth in consumption and investment. In the external sector, growth in both exports and imports was revised down from the previous estimate. However, according to the revision, exports (first estimate: +4.4% quarter-on-quarter; second estimate: +4.3% qoq) grew more than imports (first estimate: +4.4% qoq; second estimate: +4.0% qoq). As a consequence, the net contribution from the external sector to overall quarterly growth rose from the 0.06 percentage points initially reported to 0.17 percentage points. Despite the persistent turmoil owing to the fiscal crisis in Europe, the economy should continue to grow, with Consensus Forecast participants expecting GDP to expand 0.4% in the third quarter, which is a notch below the 0.5% expansion expected by the European Commission. Nevertheless, strong downward risks persist, as most of the countries in the Euro zone are applying severe fiscal consolidation programmes after fiscal deficits reached unsustainable levels and the strong rally of the euro might hinder exports growth in the months to come. Consensus Forecast panellists anticipate GDP expanding 1.6% this year, which is 0.1 percentage points above last month’s projection. For 2011, the panel expects the economy to expand 1.4%.
1.0
0.0 % -1.0 -0.1 -0.4 -0.5
-2.0
-1.8 -2.5
-3.0 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10
Note: Quarter-on-quarter changes of seasonally adjusted GDP in %. Source: Eurostat and FocusEconomics Consensus Forecast.
GDP by Type Q2 2010 | variation in %
Imports Exports Gross fixed investment GDP Domestic demand Government consumption Private consumption 0.0 0.2 1.0 2.0 3.0 4.0 0.5 1.0 0.8 1.5 4.0
4.3
%
5.0
Note: Quarter-on-quarter changes of seasonally adjusted gross domestic product in %. Source: Eurostat and FocusEconomics calculations.
Industrial Production | variation in %
3.0 5.0
REAL SECTOR | Industrial production steps up in August In August, industrial production expanded 1.0% over the previous month in seasonally adjusted terms. The result was up from the 0.1% rise recorded in July (previously reported: +0.0% month-on-month) and beat market expectations, which had anticipated a 0.7% increase. On an annual basis, industrial production expanded 7.9%, which was up from the 7.2% increase recorded in July. That said, the positive annual figure was still favoured by a low calculation base, as industrial production had contracted 15.0% in August 2009. The main drivers behind the monthly reading were capital goods, which rose +3.0% month-on-month, as well as production of durable consumer goods, which was up 1.8% over the previous month. As a result of the positive monthly reading, annual average growth in industrial production climbed back into positive territory after 21 consecutive negative readings, rising from a 0.6% drop in July to a 1.1% increase in August.
MoM s.a. (left scale) Annual average YoY (right scale) 2.1
2.0 1.6 1.1 1.0 % 0.0 0.5
0.0 1.8 1.2 1.0 0.7 0.1 -0.1 -15.0 % -10.0 -5.0
-0.4 -1.0 Aug Sep Oct -0.8
-0.6 -20.0 Apr May Jun Jul Aug
Nov Dec Jan Feb Mar
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: Eurostat.
FocusEconomics Consensus Forecast
| 14
FOCUSECONOMICS
Euro area
November 2010
Consensus Forecast panellists see industrial production expanding 5.2% this year, which is down 0.8 percentage points from last month’s forecast. For 2011, the panel anticipates industrial production to accelerate to 2.5%. OUTLOOK | Economic sentiment rises more than expected in October
Economic Sentiment
120
110
The Economic Sentiment Indicator (ESI) published by the European Commission rose 0.9 points in October, stepping up from the 103.2 points recorded in September to 104.1 points. The figure overshot market expectations, which had seen the ESI rising to only 103.5 points. At the current level, the index remains above its long-term average of 100 points for a fourth consecutive month, after having fallen below the threshold for two straight months in May and June. Values greater than 100 indicate an above-average economic sentiment, whereas values below 100 indicate a below-average position. The increase was led by a more optimistic sentiment in industry and construction. Improving order books, in particular for exports, fuelled economic sentiment in the industrial sector. Meanwhile, the sentiment gauge remained unchanged in the other three categories composing the index (consumers, retail trade and services). MONETARY SECTOR | Inflation picks up in September Consumer prices in the Euro zone rose 0.2% over the previous month in September, which mirrored the result seen in the previous month. As a consequence of the monthly increase, annual headline inflation stepped up from 1.6% in August to 1.8%, which confirmed a previous estimate released by Eurostat on 30 September and marked the highest level in nearly two years. The monthly rise was driven by higher prices for clothing, which added 6.5% over the previous month, as well as for education, which added 0.6% over August. On an annual basis, the increase of consumer prices reflected the impact of higher energy prices, which rose 7.7% over the same month last year, with the sub-category relative to fuel for transport rising 10.9%.
2.0
100
Points
90
80
70
60 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: The Economic Sentiment Indicator (ESI) is based on surveys addressed to the manufacturing, services, retail trade and construction sectors, as well as to consumers. Values above 100 indicate an above-average economic sentiment, whereas values below 100 indicate a below-average position. Source: European Commission.
Inflation | Consumer Price Index
1.0 0.9
monthly (left scale) annual (right scale)
0.5 % 0.0 0.0 0.2 0.1
0.5 0.3 0.3 0.1 0.0 0.2 0.2 1.0
Meanwhile, the core inflation index, which does not include prices for energy and unprocessed foods, rose 0.2% over the previous month. Despite the monthly increase, annual core inflation remained unchanged at August’s 1.0%. At the current level, inflation remains under the rate of just below 2.0% aimed at by the European Central Bank (ECB). Accordingly, the ECB left the refinancing rate unchanged at 1.0% for the fifteenth consecutive time at its last meeting on 7 October, in a decision widely expected by the market. ECB President Jean Claude Trichet maintains that the current monetary policy stance is appropriate, as the ECB expects inflationary pressures to remain moderate over the medium-term horizon, as recovery in the region continues at a moderate and uneven pace. More recent data point to a situation of rising inflation. According to a preliminary estimate released by Eurostat on 29 October, inflation rose 1.9% over the same month the previous year, which if confirmed would mark an increase compared to September’s reading. Consensus Forecast participants see inflation averaging 1.5% this year, which is unchanged from last month’s forecast. For 2011, the panel anticipates average inflation rising to 1.6%.
% 0.0
-0.5
-0.3
-0.8 -1.0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep -1.0
Note: Year-on-year and monthly variation of consumer price index in %. Source: Eurostat.
FocusEconomics Consensus Forecast
| 15
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Money (annual variation of M3 in %) Inflation (HICP, eop annual variation in %) Inflation (HICP, ann. average variation in %) Producer Prices (annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (Eurostoxx 50, var. in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %)
Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) Private Consumption (s.a. qoq var. in %) Fixed Investment (s.a. qoq var. in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Inflation (HICP, ann. average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop)
Monthly Data Industrial Production (annual variation in %) Industrial Production (s.a. mom var. in %) Unemployment (% of active population) Consumer Confidence Index Econ. Sent. Indicator (100-point threshold) Inflation (HICP, mom variation in %) Inflation (HICP, eop annual variation in %) Exchange Rate (USD per EUR, eop)
Euro area
November 2010
2005 324 25,181 8,146 1.7 2.0 1.8 1.6 3.4 1.4 9.0 -2.5 70.1 7.3 2.2 2.2 4.4 2.25 2.49 3.41 21.3 1.18 1.24 0.2 15.4 43.3 1,222 1,179 8.7 14.4
Q3 09 -4.0 0.4 -0.1 -1.1 -14.4 9.7 -0.4 1.00 0.75 3.87 1.46
Jan-10 1.8 2.1 9.9 -15.8 96.0 -0.8 1.0 1.39
2006 325 26,303 8,554 3.0 3.0 2.2 2.1 5.7 4.2 8.4 -1.3 68.3 9.9 1.9 2.2 3.8 3.50 3.73 3.90 15.1 1.32 1.26 -0.1 -8.9 10.6 1,398 1,387 14.4 17.7
Q4 09 -2.0 0.2 0.2 -1.2 -7.4 9.9 0.4 1.00 0.70 3.87 1.43
Feb-10 4.2 -0.6 9.9 -17.4 95.9 0.3 0.9 1.36
2007 327 27,521 9,002 2.8 2.6 1.7 2.2 4.6 3.7 7.5 -0.6 66.0 11.6 3.1 2.1 4.7 4.00 4.68 4.38 6.8 1.46 1.37 0.1 8.9 47.5 1,518 1,471 8.6 6.0
Q1 10 0.8 0.3 0.2 -0.3 4.7 9.9 1.1 1.00 0.63 3.99 1.35
Mar-10 7.7 1.8 10.0 -17.3 97.9 0.9 1.4 1.35
2008 329 28,195 9,265 0.6 0.3 0.4 2.4 -1.0 -1.8 7.6 -2.0 69.4 7.6 1.6 3.3 1.2 2.50 2.89 3.89 -44.3 1.39 1.47 -1.7 -162 -18.3 1,576 1,594 3.8 8.4
Q2 10 1.9 1.0 0.2 1.5 9.0 10.0 1.5 1.00 0.77 3.70 1.22
Apr-10 9.2 0.7 10.0 -15.0 100.6 0.5 1.5 1.32
2009 330 27,258 8,987 -4.1 -3.4 -1.1 2.4 -11.3 -14.8 9.4 -6.3 78.7 -0.2 0.9 0.3 1.0 1.00 0.70 3.87 21.0 1.43 1.39 -0.8 -67.6 38.4 1,288 1,249 -18.3 -21.6
Q3 10 1.8 0.4 0.2 0.3 5.3 10.1 1.7 1.00 0.89 3.50 1.37
May-10 9.8 1.2 10.0 -17.8 98.4 0.1 1.6 1.23
2010 331 27,767 9,202 1.6 1.3 0.7 -0.5 5.2 10.1 -6.3 85.3 1.5 1.00 0.97 2.35 1.33 1.38 -0.4 -41.3 36.5 1,421 1,382 10.4 10.4
Q4 10 2.0 0.3 0.2 0.3 4.2 10.1 1.8 1.00 0.97 2.35 1.33
Jun-10 8.2 -0.1 10.0 -17.3 98.9 0.0 1.4 1.22
2011 333 28,470 9,483 1.4 1.2 0.9 2.2 2.5 10.1 -5.2 88.4 1.6 1.17 1.37 3.08 1.30 1.31 -0.1 -10.3 53.1 1,531 1,473 7.7 6.7
Q1 11 1.9 0.3 0.2 0.3 2.4 10.1 1.8 1.00 1.10 2.48 1.35
Jul-10 7.2 0.1 10.0 -14.0 101.1 -0.3 1.7 1.30
2012 335 29,260 9,797 1.6 1.8 1.3 2.8 2.4 9.7 -4.2 88.6 1.7 2.10 2.18 3.61 1.26 1.28 0.2 15.1 75.1 1,645 1,570 7.4 6.5
Q2 11 1.2 0.4 0.2 0.4 1.4 10.1 1.6 1.03 1.25 2.71 1.35
Aug-10 7.9 1.0 10.0 -11.4 102.3 0.2 1.6 1.28
2013 337 30,127 10,139 1.8 1.8 1.7 3.2 2.7 9.6 -3.3 89.0 1.7 2.80 2.90 3.95 1.26 1.26 0.2 22.2 86.5 1,768 1,682 7.5 7.1
Q3 11 1.1 0.5 0.3 0.5 1.4 10.0 1.6 1.07 1.39 2.89 1.34
Sep-10 10.1 -11.0 103.2 0.2 1.8 1.37
2014 338 31,040 10,500 1.8 1.9 1.8 3.2 2.9 9.2 -2.7 89.1 1.7 3.08 2.92 3.92 1.25 1.25 0.3 27.8 98.3 1,892 1,793 7.0 6.6
Q4 11 1.2 0.5 0.3 0.6 2.9 9.9 1.6 1.17 1.37 3.08 1.30
Oct-10 -11.0 104.1 1.9 1.39
FocusEconomics Consensus Forecast
| 16
FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1990 - 2014 | % variation
6
Euro area
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
6 G7 Euro area
Real GDP growth in %
3
3
0
0
-3
Euro area G7 World 1995 2000 2005 2010
-3
-6 1990
-6 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
3
4 | GDP 2011 | evolution of forecasts
3
2
2
1
1
0
Maximum Consensus Minimum
0
Maximum Consensus Minimum Jun Sep Dec Mar Jun Sep
-1 Jun Sep Dec Mar Jun Sep
5 | Consumption | % variation
4
6 | Investment | % variation
10
2
0
Individual Forecasts Allianz Barclays Capital BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Instituto Flores de Lemus Intesa Sanpaolo JPMorgan Lloyds TSB Nomura RBS Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts European Commission (Sep. 2010) ECB (Sep. 2010) IMF (Oct. 2010)
Notes and sources
2010 1.8 1.7 1.6 1.6 1.7 1.5 1.6 1.6 1.7 1.6 1.5 1.7 1.5 1.7 1.6 1.6 1.6 1.7 1.5 1.7 1.6 1.7 1.7 1.6 1.5 1.8 1.6 1.6 1.5 1.3 1.2 1.7 1.4 - 1.8 1.7
2011 1.7 1.7 1.2 1.5 1.1 1.1 1.5 1.2 2.5 1.4 1.0 1.2 1.5 1.8 1.4 0.9 1.7 1.5 1.4 1.6 1.0 1.2 1.9 1.3 0.9 2.5 1.4 1.4 1.4 1.4 1.4 0.5 - 2.3 1.5
0
-10
Euro area -2 1996 2001
G7 -20 2006 2011 1996
Euro area
G7
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All real sector data are from Eurostat. See below for details. Forecasts are based on the FocusEconomics Consensus Forecast.
2011
2001
2006
7 | Consumption | evolution of fcst
2 2010 2011
8 | Investment | evolution of forecasts
4
2 1 0 0 -2 2010 2011 -1 Jul Oct Jan Apr Jul Oct -4 Jul Oct Jan Apr Jul Oct
1 GDP, real annual variation in %. Source: Eurostat. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: Eurostat. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts during the last 18 months. 5 Private consumption, annual variation in %, 1996-2014. Source: Eurostat. 6 Gross fixed investment, annual variation in %, 1996-2014. Source: Eurostat. 7 Private consumption, evolution of 2010 and 2011 forecasts since July 2009. 8 Gross fixed investment, evolution of 2010 and 2011 forecasts since July 2009. 9 Industrial production, annual variation in %. Source: Eurostat. 10 Unemployment, % of active population, 1995-2014. Source: Eurostat. 11 General government balance, % of GDP, 1995-2014. Source: Eurostat. 12 Industrial production, evolution of 2010 and 2011 forecasts since July 2009. 13 Unemployment, evolution of 2010 and 2011 forecasts since July 2009. 14 General government balance, evolution of 2010 and 2011 forecasts since July 2009.
FocusEconomics Consensus Forecast
| 17
FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.6 0.8 0.7 1.3 0.7 1.1 0.8 0.6 0.4 0.7 0.8 0.9 0.9 1.7 0.7 0.8 0.7 0.3 0.6 1.1 0.3 0.8 0.8 1.1 0.8 0.6 0.7 1.0 0.5 0.9 0.5 0.7 0.6 0.9 0.6 0.6 0.8 1.1 0.9 1.0 0.6 0.6 0.3 0.9 0.7 0.7 0.6 0.2 0.1 0.3 1.7 0.9 0.9 0.8 0.8 0.8
Euro area
November 2010
Individual Forecasts Allianz Barclays Capital BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Instituto Flores de Lemus Intesa Sanpaolo JPMorgan Lloyds TSB Nomura RBS Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
9 | Industry | % variation
10
Investment % variation 2010 2011 -0.9 2.5 -1.1 2.0 -1.3 1.0 -0.6 2.0 -1.2 1.6 -0.5 3.8 -0.3 3.2 -0.7 1.8 -1.2 1.0 -0.7 2.2 -0.6 2.1 -0.8 2.6 4.8 1.3 -0.8 2.4 -0.7 3.3 -1.0 1.6 -0.8 2.2 -0.8 1.9 0.1 2.9 -0.3 4.0 -1.1 1.7 -1.3 4.8 -0.8 -0.5 -0.6 -1.7 -1.9 1.0 4.0 2.1 2.2 2.2 2.1 2.0
Industry % variation 2010 2011 6.7 3.6 2.1 4.6 7.0 0.8 1.4 1.8 5.4 2.8 4.0 3.5 2.7 -0.2 6.6 1.9 6.5 1.9 5.9 4.1 6.7 1.7 7.0 2.5 6.2 3.4 1.4 7.0 6.2 5.2 6.0 6.5 6.9 -0.2 4.6 2.5 2.5 2.6 2.7 2.7
Unemployment % of active pop. 2010 2011 10.0 9.9 10.0 9.5 10.1 10.2 10.0 9.7 10.0 10.3 10.0 9.7 10.0 10.4 10.0 9.9 10.1 10.6 10.1 10.4 10.3 10.1 10.3 10.1 10.3 10.3 10.7 10.4 10.1 9.9 10.0 9.9 10.1 10.3 10.1 10.3 10.2 10.2 10.0 9.8 9.9 9.6 10.1 10.1 9.9 10.7 10.1 10.1 10.2 10.2 10.2 9.5 10.6 10.1 10.1 10.2 10.2 10.2
Fiscal Balance % of GDP 2010 2011 -6.4 -5.4 -6.3 -4.9 -6.8 -5.5 -6.3 -5.1 -6.2 -4.9 -5.9 -4.9 -6.0 -4.6 -6.8 -5.0 -6.0 -4.7 -6.5 -5.3 -6.1 -4.8 -6.5 -5.5 -6.7 -5.9 -6.8 -5.5 -6.4 -5.3 -6.1 -5.3 -6.5 -5.2 -6.6 -6.1 -5.5 -4.2 -6.5 -5.2 -6.8 -5.5 -6.4 -6.3 -6.4 -6.4 -6.5 -6.1 -4.2 -5.2 -5.2 -5.3 -5.3 -5.4
Public Debt % of GDP 2010 2011 86.7 89.0 84.3 87.6 90.1 91.8 84.3 88.0 85.0 88.3 85.0 89.0 84.7 88.5 82.7 84.9 82.7 90.1 84.9 85.3 84.7 84.1 84.9 91.8 88.4 88.4 87.7 87.4 -
10 | Unemployment | % of active pop.
12 Euro area 10 G7
11 | Fiscal Balance | % of GDP
4
0
0 8 -10 6 Euro area -20 1990 1995 2000 2005 2010 G7 4 1995 2000 2005 2010 -12 1995 2000 2005 2010 -8 Euro area G7 -4
12 | Industry | evolution of forecasts
8 2010 2011 4
13 | Unemployment | evolution of fcst
12
14 | Fiscal Balance | evolution of fcst
-4 2010 2011
11
-5
0
10 2010 2011
-6
-4 Jul Oct Jan Apr Jul Oct
9 Jul Oct Jan Apr Jul Oct
-7 Jul Oct Jan Apr Jul Oct
FocusEconomics Consensus Forecast
| 18
FOCUSECONOMICS
Monetary Sector | Inflation and Exchange Rate
15 | Inflation | 1995 - 2014 | in %
4 Euro area 3
4
Euro area
November 2010
16 | Inflation | Q1 07-Q4 11 | in %
6 Euro area G7
Inflation and Exchange Rate
Consumer Prices Exchange Rate % var. USD per EUR Individual Forecasts 2010 2011 2010 2011 Allianz 1.5 1.6 1.40 1.45 Barclays Capital 1.6 1.9 BBVA 1.6 1.7 1.40 1.30 BMO Capital Markets 1.5 1.8 BNP Paribas 1.6 1.6 1.34 1.20 Citigroup 1.5 1.7 1.44 1.39 Commerzbank 1.5 1.7 1.35 1.28 Credit Agricole 1.6 1.5 1.42 1.30 Credit Suisse 1.6 1.6 DekaBank 1.5 1.4 1.24 1.24 Deutsche Bank 1.6 1.7 1.30 1.35 DZ Bank 1.5 1.4 1.27 1.35 Experian 1.4 1.5 1.12 1.15 Goldman Sachs 1.5 1.5 1.35 1.38 ING 1.5 1.7 1.40 1.40 Instituto Flores de Lemus 1.6 1.8 Intesa Sanpaolo 1.5 1.7 1.27 1.29 JPMorgan 1.5 1.1 1.30 1.25 Lloyds TSB 1.5 1.6 1.27 1.25 Nomura 1.6 1.9 1.35 1.35 RBS 1.6 1.8 1.32 1.22 Raiffeisen Research 1.5 1.6 1.40 1.20 UBS 1.6 1.8 1.25 1.10 Unicredit 1.5 1.7 1.43 1.46 Summary Minimum 1.4 1.1 1.12 1.10 Maximum 1.6 1.9 1.44 1.46 Median 1.5 1.7 1.35 1.30 Consensus 1.5 1.6 1.33 1.30 History 30 days ago 1.5 1.6 1.27 1.26 60 days ago 1.5 1.6 1.23 1.22 90 days ago 1.5 1.6 1.21 1.21 Additional Forecasts Eur. Comm. (Sep. 2010) 1.4 ECB (Sep. 2010) 1.5 - 1.7 1.2 - 2.2 IMF (Oct. 2010) 1.6 1.5 -
G7
2
2
1
0
0
-1 1995 2000 2005 2010
-2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3 Maximum Consensus Minimum 2
18 | Inflation 2011 | evolution of fcst
3
2
1
1 Maximum Consensus Minimum 0
Jun Sep Dec Mar Jun Sep
0
Jun
Sep
Dec
Mar
Jun
Sep
19 | Exchange Rate | 1990 - 2014
1.6
20 | Exchange Rate | Q1 07-Q4 11 |
1.6
1.4
1.5
1.2
1.4
1.0
1.3
0.8 1990 1995 2000 2005 2010
1.2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
Notes and sources
21 | Exchange Rate 2010 | evol. of fcst
1.8 Maximum Consensus Minimum
22 | Exchange Rate 2011 | evol. of fcst
1.8
1.6
1.6
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All monetary and external sector data are from Eurostat and European Central Bank (ECB). Forecasts based on the FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). Source: Eurostat. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer prices (HICP) in % (aop). Source: Eurostat. 17 Inflation, evolution of 2010 forecasts during the last 18 months. 18 Inflation, evolution of 2011 forecasts during the last 18 months. 19 Exchange rate, USD per EUR (eop). Source: ECB. 20 Quarterly exchange rate, USD per EUR (eop). Source: ECB. 21 Exchange rate, evolution of 2010 forecasts during the last 18 months. 22 Exchange rate, evolution of 2011 forecasts during the last 18 months.
1.4
1.4
1.2
1.2
1.0
Maximum Consensus Minimum Jun Sep Dec Mar Jun Sep
1.0 Jun Sep Dec Mar Jun Sep
0.8
FocusEconomics Consensus Forecast
| 19
FOCUSECONOMICS
Monetary Sector | Interest Rates
23 | Interest Rate | 2000 - 2014 | in %
6 Euro area G7 4 4
Euro area
November 2010
24 | Interest Rate| Q1 07-Q4 11 | in %
6 Euro area Japan United States
Interest Rates
Policy Rate in % 2010 2011 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.25 1.00 1.00 1.00 1.00 1.00 1.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.50 1.00 1.25 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.75 1.00 1.25 1.00 1.00 1.00 1.75 1.00 1.25 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.75 1.00 1.17 1.38 1.42 1.46 3-month Rate in % 2010 2011 1.00 1.60 1.02 1.27 1.00 1.25 0.90 1.30 1.15 1.40 1.00 1.30 1.00 1.10 1.00 0.90 1.30 1.00 1.20 0.90 1.60 0.88 1.29 0.82 0.69 0.90 2.02 1.10 1.20 0.90 1.85 1.00 1.55 0.82 1.15 1.00 0.97 0.95 1.00 1.00 0.69 2.02 1.30 1.37 1.50 1.65 1.70
2
2
0 2000 2005 2010
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
25 | Int. Rate 2010 | evolution of fcst
4 Maximum Consensus Minimum
26 | Int. Rate 2011 | evolution of fcst
5 Maximum Consensus Minimum
3
4
3
2
2
1
1
0 Jun Sep Dec Mar Jun Sep
0 Jun Sep Dec Mar Jun Sep
27 | 3-month Rate | 2000 - 2014 | in %
8 Euro area United States Japan
28 | 3-month Rate| Q1 07-Q4 11 | in %
6 Euro area Japan United States 4
Individual Forecasts Allianz Barclays Capital BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Instituto Flores de Lemus Intesa Sanpaolo JPMorgan Lloyds TSB Nomura RBS Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
6
4 2 2
0 2000 2005 2010
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
Notes and sources
29 | 3-m Rate 2010 | evolution of fcst
3.0 Maximum Consensus Minimum 2.0
30 | 3-m Rate 2011 | evolution of fcst
6 Maximum Consensus Minimum
General: Long-term chart period from 2000 to 2014 unless otherwise stated. All monetary and external sector data are from Eurostat and European Central Bank (ECB), Fed and BoJ. Forecasts based on the FocusEconomics Consensus Forecast. 23 Interest rate, policy rate in %. Source: ECB. 24 Quarterly interest rate, policy rate in %. Source: ECB, Fed and BoJ. 25 Interest rate, evolution of 2010 ECB refinancing rate forecasts during the last 18 months. 26 Interest rate, evolution of 2011 ECB refinancing rate forecasts during the last 18 months. 27 Interest rate, 3-month rate in % (eop). Source: ECB, Fed and BoJ. 28 Interest rate, 3-month rate in % (eop). Source: ECB, Fed and BoJ. 29 Interest rate, evolution of 2010 3-month Euribor forecasts during the last 18 months. 30 Interest rate, evolution of 2011 3-month Euribor forecasts since November 2009.
4
1.0
2
0.0 Jun Sep Dec Mar Jun Sep
0 Nov Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 20
FOCUSECONOMICS
External Sector | Current Account and Trade Balance
31 | Current Account | % of GDP
1
Euro area
November 2010
32 | Current Account | EUR bn
100
Current Account Balance | EUR bn
0 0 -1 -100 -2 Euro area G7 -3 2000 2005 2010 -200 2000 2005 2010
33 | Current Account 2010 | evol. of fcst
100
34 | Current Account 2011 | evol. of fcst
200 Maximum Consensus Minimum
0
100
-100
0
-200
Maximum Consensus Minimum Jun Sep Dec Mar Jun Sep
-100
-300
-200 Jul Oct Jan Apr Jul Oct
35 | Current Account | EUR bn
20
36 | Trade Balance | EUR bn
2,000 Trade Balance Exports Imports
Individual Forecasts Allianz Barclays Capital BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Instituto Flores de Lemus Intesa Sanpaolo JPMorgan Lloyds TSB Nomura RBS Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
2010 -46.4 -46.4 -50.0 -44.0 -45.0 -27.8 -102.1 -79.3 -36.8 9.3 -24.4 -42.0 -27.8 -37.1 -55.6 -46.2 -23.1 -18.5 -102.1 9.3 -43.0 -41.3 -39.3 -30.2 -25.1
2011 -28.9 -19.1 -20.0 -15.1 -20.0 28.6 -87.0 -75.0 0.0 47.9 22.6 -17.3 -19.1 19.2 -28.6 -19.0 36.5 9.5 -87.0 47.9 -18.2 -10.3 -5.2 0.1 1.9
0
1,500
1,000 -20 500 -40
0
-60 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
-500 1995 2000 2005 2010
37 | Exports | variation in %
30
38 | Imports | variation in %
40
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary and external sector data are from Eurostat and European Central Bank (ECB). Forecasts based on the FocusEconomics Consensus Forecast. 31 Current account, balance as % of GDP, 2000-2014. Source: Eurostat. 32 Current account, balance in EUR bn, 2000-2014. Source: Eurostat. 33 Current account, evolution of 2010 forecasts during the last 18 months. 34 Current account, evolution of 2011 forecasts since July 2009. 35 Quarterly current account balance in EUR bn. Source: Eurostat. 36 Trade balance in EUR bn. Source: Eurostat. 37 Exports, annual variation in %. Source: Eurostat. 38 Imports, annual variation in %. Source: Eurostat.
20
20
10 0 0 -20
-10
-20 1995 2000 2005 2010
-40 1995 2000 2005 2010
FocusEconomics Consensus Forecast
| 21
FOCUSECONOMICS
France
November 2010
France
France
Outlook improves
• On 26 October, the French parliament approved a plan to reform the pension system, which raises the retirement age by two years. The reform triggered a wave of nationwide protests and strikes in the oil sector that brought oil refining and distribution to a virtual standstill. Nonetheless, Finance Minister Christine Lagarde stated that the consequences of protests will not alter the country’s economic growth forecast for this year. Consensus Forecast panellists lifted their forecast by 0.1 percentage points and now see the economy growing 1.6% in 2010. For 2011, the panel expects economic growth to moderate to 1.5%. Inflation rose from 1.4% in August to 1.6% in September. Panellists expect inflation to average 1.6% this year, which is down 0.1 percentage points from last month’s estimate. Next year, panellists anticipate inflation to average 1.5%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 60.1 1,548 25,752 2.1 -2.8 60.2 2.0 1.3 2005-09 62.1 1,860 29,933 0.8 -3.7 67.8 1.7 -1.2 2010-14 64.0 2,102 32,808 1.7 -5.2 87.0 1.7 -2.0
•
•
Joan Enric Domene
Economist
OUTLOOK | French parliament approves reform despite strikes On 26 October, the French parliament approved President Nicolas Sarkozy’s pension reform plan, which will raise the minimum retirement age from 60 to 62 and the full retirement age from 65 to 67. In response to these changes, labour unions have announced further strikes, continuing a series of protests since early September. In October, strikes were focused in the oil sector and brought French oil refining and distribution to a virtual standstill. However, with the approval of the bill the strikes seem to have turned a corner, as workers at eight of 12 refineries voted to return to work by 29 October. Finance Minister Christine Lagarde stated that the protests and strikes cost the country between EUR 200 million and EUR 400 million (USD 280 - 560 million) a day. That said, Lagarde added that the protests would not alter the government’s economic growth forecast for 2010. The French government expects the economy to grow 1.5% this year. Consensus Forecast panellists are slightly more optimistic and see the economy growing 1.6% this year, which is 0.1 percentage points above last month’s projection. For next year, the panel forecasts GDP growth at 1.5%. REAL SECTOR | Industrial production stalls in August In August, industrial output remained unchanged over the previous month in seasonally adjusted terms. The monthly reading contrasted the 0.8% expansion tallied in July and undershot market expectations of a 0.3% rise. On an annual basis, industrial activity decelerated from a 5.6% rise in July to a 3.2% expansion.
Industrial Production | variation in %
3.0 2.3 MoM s.a. (left scale) 2.0 1.1 0.1 0.0 % -1.5 -1.1 -1.6 -0.3 -0.2 0.2 1.3 1.0 0.8 % 0.0 -5.0 0.0 Annual average YoY (right scale) 5.0
1.5
-10.0
-3.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
-15.0
Note: Month-on-month changes of seasonally adjusted industrial production and moving annual average growth rate in %. Source: National Institute of Statistics and Economic Studies (INSEE) and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 22
FOCUSECONOMICS
France
November 2010
The flat August reading was caused by manufacturing, which remained unchanged from July and contrasted the previous month’s expansion (July: +1.2% month-on-month). In addition, a 0.1% drop in construction offset a 0.1% increase in mining, energy, water and waste management. Despite the August reading, the trend continued to improve, with annual average growth of industrial output jumping from 0.3% in July to 1.5% in August, which represents the second positive reading since August 2008. Consensus Forecast panellists see industrial production rising 5.2% this year, which is up 0.6 percentage points from last month forecast. For next year, panellists expect an expansion of 2.9%. OUTLOOK | Business confidence improves in September
long-term average 100 Points
Business Sentiment
120
The Central Bank’s business sentiment indicator for manufacturers rose from 101 points in August to 102 points in September after four consecutive months without a change in business confidence. At the current level, the index is just slightly above its long-term average of 100. While inventories of final goods declined slightly, order books increased markedly and returned to a level comparable to that observed before summer 2008. In addition, capacity utilisation rose significantly and activity in the service sector rose sharply, buttressed by strong growth in temporary work and transport. More recent data for the economic climate in the manufacturing industry corroborate the improving outlook implied by the Central Bank’s indicator. The business sentiment measurement elaborated by the National Statistical Institute (INSEE) rose to 102 points in October from September’s 99 points, which continues the upward trend in place since March 2009 that was only briefly interrupted in June this year. The rise contrasted market expectations, which anticipated sentiment to fall to 98 points. The Central Bank’s monthly index of business activity (MIBA) expects the economy to expand 0.3% in the third quarter, which is 0.1 percentage points below the forecast elaborated by INSEE in its quarterly economic outlook from October. Consensus Forecast panellists maintain a slightly more optimistic view and see the economy growing 0.4% in the third quarter of 2010.
80
60 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: Value of monthly business sentiment indicator index; long-term aver. at 100. Source: Banque de France (BdF).
Consumer Confidence
-10 long-term average -20
OUTLOOK | Consumer confidence improves unexpectedly in October In October, the index of consumer sentiment from the National Statistical Institute (INSEE) rose to minus 34 points from minus 35 points registered in September. The unexpected rise contrasted market expectations, which had seen sentiment deteriorating to minus 37 points. Despite the increase, consumer confidence remains well below its long-term average level of minus 19. In October, households’ perceptions of unemployment improved, but remained above the long-term average. The sub-index regarding the general economic situation in the next 12 months improved from minus 47 points in September to minus 44 in October, while the sub-index regarding the personal financial situation in the next 12 months improved from minus 19 points to minus 17 points. Consensus Forecast panellists expect private consumption to grow 1.4% this year before decelerating moderately to 1.2% in 2011.
Points
-30
-40
-50 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: Value of monthly consumer confidence index; long-term average at minus 18. Source: National Institute of Statistics and Economic Studies (INSEE).
FocusEconomics Consensus Forecast
| 23
FOCUSECONOMICS
France MONETARY SECTOR | Inflation accelerates in September
November 2010
Inflation | Consumer Price Index
0.6 0.6 0.5 2.0
In September, consumer prices fell 0.1% over the previous month, which contrasted the 0.2% rise seen in August. Despite the monthly drop, annual inflation rose from 1.4% in August to 1.6%, which was below market expectations of a 1.8% increase. According to the National Statistical Institute (INSEE), the September reading was driven by a drop in the prices for services, which fell 0.8% over the previous month. The drop was only partially offset by the increase in the price of manufactured products (+0.7% mom). The core inflation index, which excludes more volatile categories such as oil, fruits and vegetables, remained flat in September, taking annual core inflation from August’s 0.8% reading to 0.6%. Finally, annual average harmonised inflation (HICP) increased from 1.2% in August to 1.4%. Consensus Forecast panellists expect inflation to average 1.6% in 2010, which is down 0.1 percentage points from last month’s forecast. Next year, panellists expect inflation to average 1.5%.
0.3 0.1 0.1 0.0 % -0.2
0.3
0.3 0.1
0.2 1.0
0.0 -0.2 -0.3 monthly (left scale) annual (right scale)
% -0.1 0.0
-0.3
-0.6 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
-1.0
Note: Year-on-year and month-on-month var. of consumer price index in %. Source: National Institute of Statistics and Economic Studies (INSEE).
FocusEconomics Consensus Forecast
| 24
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Retail Sales (annual variation in %) Car Registrations (mn) Housing Starts (mn) Hourly Wages (annual var. in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (CPI, annual variation in %) Inflation (HICP, annual variation in %) Inflation (HICP annual average variation in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (variation of CAC 40 in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2005 61.4 28,112 1,726 1.9 2.6 2.6 1.2 4.4 0.2 3.7 2.1 0.41 3.1 9.3 -2.9 66.4 1.5 1.8 1.9 3.5 2.25 2.49 3.37 23.4 1.18 1.24 -0.4 -7.3 -37.7 357 394 5.0 9.6 2006 61.8 29,244 1,806 2.2 2.5 2.4 1.3 4.1 1.3 2.7 2.0 0.42 3.0 9.3 -2.3 63.7 1.5 1.7 1.9 2.9 3.50 3.73 4.03 17.5 1.32 1.26 -0.5 -9.2 -44.4 391 435 9.6 10.4
France
November 2010
2007 62.1 30,507 1,895 2.3 3.1 2.4 1.5 6.5 1.2 3.6 2.1 0.43 2.9 8.4 -2.7 63.8 2.6 2.8 1.6 5.2 4.00 4.68 4.50 1.3 1.46 1.37 -1.0 -18.9 -58.8 401 460 2.7 5.7
2008 62.4 31,227 1,950 0.2 0.2 0.6 1.6 0.1 -2.7 3.5 2.1 0.40 3.1 7.8 -3.3 67.5 1.0 1.2 3.2 -0.2 2.50 2.89 3.44 -42.7 1.39 1.47 -2.3 -44.0 -72.2 413 485 2.8 5.3
2009 62.8 30,574 1,921 -2.5 -0.5 0.6 2.8 -7.1 -12.1 -4.6 2.3 0.33 2.9 9.4 -7.5 77.6 0.9 1.0 0.1 -3.0 1.00 0.70 3.60 22.3 1.43 1.39 -1.9 -36.8 -58.2 340 399 -17.5 -17.8
2010 63.2 31,067 1,964 1.6 0.9 1.4 -1.9 5.2 1.7 9.9 -7.7 83.1 1.6 1.00 0.97 2.80 1.33 1.38 -2.0 -38.7 -52.5 377 432 10.8 8.3
2011 63.6 31,824 2,025 1.5 1.2 1.2 2.2 2.9 2.2 9.8 -6.3 87.9 1.5 1.17 1.37 3.20 1.30 1.31 -1.9 -38.4 -56.4 402 458 6.5 6.2
2012 64.0 32,731 2,096 1.8 2.0 1.6 3.0 3.2 2.7 9.5 -5.1 89.3 1.7 2.10 2.18 4.03 1.26 1.28 -2.2 -47.1 -62.0 433 496 7.7 8.2
2013 64.4 33,679 2,170 1.8 2.2 2.0 3.5 3.6 2.7 9.0 -3.6 87.6 1.7 2.80 2.90 5.18 1.26 1.26 -1.9 -40.6 -65.7 463 533 7.0 7.5
2014 64.8 34,741 2,252 2.0 2.3 2.2 3.7 3.7 2.8 8.6 -3.0 87.3 1.8 3.08 2.92 5.23 1.25 1.25 -1.9 -42.1 -69.1 493 565 6.4 6.0
Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq s.a. var. in %) Unemployment (aop, % of active population) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Industrial Production (s.a. mom var. in %) Unemployment (% of active population) Consumer Conf. (long-term avg. -19) Business Sentiment (long-term avg.100) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop)
Q3 09 -2.7 0.3 9.6 -0.5 1.00 0.75 3.62 1.46 Jan-10 3.4 2.0 9.9 -31 102 -0.2 1.1 1.39
Q4 09 -0.5 0.6 9.8 0.4 1.00 0.70 3.60 1.43 Feb-10 4.4 0.2 9.9 -33 102 0.6 1.3 1.36
Q1 10 1.2 0.2 9.9 1.5 1.00 0.63 3.42 1.35 Mar-10 7.5 1.0 9.9 -34 103 0.5 1.6 1.35
Q2 10 1.7 0.7 9.9 1.8 1.00 0.77 3.55 1.22 Apr-10 8.4 -0.2 9.9 -37 101 0.3 1.7 1.32
Q3 10 1.8 0.4 9.7 1.6 1.00 0.89 2.67 1.37 May-10 8.1 1.3 9.9 -38 101 0.1 1.6 1.23
Q4 10 1.5 0.3 9.7 1.6 1.00 0.97 2.80 1.33 Jun-10 5.4 -1.6 9.9 -39 101 0.0 1.5 1.22
Q1 11 1.6 0.3 9.7 1.4 1.00 1.10 2.79 1.35 Jul-10 5.6 0.8 10.0 -38 101 -0.3 1.7 1.30
Q2 11 1.3 0.4 9.7 1.4 1.03 1.25 2.93 1.35 Aug-10 3.2 0.0 10.0 -37 101 0.2 1.4 1.28
Q3 11 1.3 0.4 9.7 1.6 1.07 1.39 3.10 1.34 Sep-10 -35 102 -0.1 1.6 1.37
Q4 11 1.4 0.4 9.5 1.7 1.17 1.37 3.20 1.30 Oct-10 -34 1.39
FocusEconomics Consensus Forecast
| 25
FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1990 - 2014 | % variation
6
France
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
1
Real GDP growth in %
3
0
0
-1
-3 France World -6 1990 1995 2000 2005 2010 G7
-2 France -3 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 G7
3 | GDP 2010 | evolution of forecasts
4
4 | GDP 2011 | evolution of forecasts
3
2
2
1
0 Maximum Consensus Minimum -2 Jun Sep Dec Mar Jun Sep
0 Maximum Consensus Minimum
-1 Jun Sep Dec Mar Jun Sep
5 | Consumption | % variation
6 France 4 G7
6 | Investment | % variation
10
0 2 -10 0 France -2 1990 1995 2000 2005 2010 -20 1990 1995 2000 2005 2010 G7
Individual Forecasts Asterès BBVA BMO Capital Markets BNP Paribas Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Intesa Sanpaolo JPMorgan Lloyds TSB Nomura Raiffeisen Research Société Générale Toronto-Dominion Bank UBS Unicredit Xerfi Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts European Commission (Sep. 2010) IMF (Oct. 2010) OECD (May 2010)
2010 1.7 1.6 1.5 1.6 1.6 1.5 1.7 1.7 1.5 1.7 1.5 1.6 1.4 1.5 1.6 1.5 1.6 1.6 1.5 1.5 1.7 1.5 1.3 1.3 1.7 1.5 1.6 1.5 1.4 1.4 1.6 1.6 1.7
2011 1.5 1.4 1.9 1.2 1.2 1.4 2.5 1.8 1.0 1.4 1.6 2.1 1.5 1.7 1.5 1.6 1.8 1.4 1.5 1.4 1.9 1.4 0.9 0.9 2.5 1.5 1.5 1.5 1.5 1.6 1.6 2.1
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All real sector data are from the National Statistical Institute (INSEE, Institut national de la statistique et des études économiques) and Eurostat. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (seasonally adjusted), quarter-on-quarter var. in %. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts since July 2009. 5 Private consumption, annual variation in %. 6 Gross fixed investment, annual variation in %. 7 Private consumption, change in 2010 and 2011 forecasts since July 2009. 8 Gross fixed investment, change in 2010 and 2011 forecasts since July 2009. 9 Industrial production, annual variation in %. 10 Unemployment, % of active population. Source: Eurostat. 11 Balance of non-financial public sector, % of GDP. 12 Industrial production, evolution of 2010 and 2011 forecasts since July 2009. 13 Unemployment, evolution of 2010 and 2011 forecasts since July 2009. 14 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since July 2009.
7 | Consumption | evolution of fcst
2.0 2010 2011
8 | Investment | evolution of forecasts
4 2010 2011 2
1.5 0 1.0 -2
0.5 Jun Sep Dec Mar Jun Sep
-4 Jun Sep Dec Mar Jun Sep
FocusEconomics Consensus Forecast
| 26
FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 1.9 2.0 1.4 1.2 1.3 0.8 1.3 1.0 1.1 0.6 1.3 1.4 1.3 1.3 1.3 1.1 1.5 1.4 1.4 1.1 1.4 1.4 1.3 1.5 1.6 1.7 1.5 1.0 1.0 0.4 1.0 1.6 1.3 1.4 1.3 1.1 1.1 0.4 1.7 1.1 1.2 1.2 1.1 1.1 Investment % variation 2010 2011 -2.0 2.2 -2.1 0.7 -1.7 2.6 -2.9 1.3 -2.0 2.0 -1.0 2.5 -1.7 1.9 -1.9 2.8 -1.9 2.5 -1.7 2.3 -1.8 2.4 -1.4 4.2 -2.1 1.9 -1.9 1.9 -2.9 -1.0 -1.9 -1.9 -2.1 -2.1 -2.2 0.7 4.2 2.3 2.2 2.2 2.2 2.4
France
November 2010
Individual Forecasts Asterès BBVA BMO Capital Markets BNP Paribas Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Intesa Sanpaolo JPMorgan Lloyds TSB Nomura Raiffeisen Research Société Générale Toronto-Dominion Bank UBS Unicredit Xerfi Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Industry Unemployment % variation % of active pop. 2010 2011 2010 2011 7.8 6.5 9.7 9.1 9.9 9.7 5.4 1.6 9.9 10.2 9.5 9.4 9.8 9.7 10.5 10.6 10.2 10.0 10.1 9.9 2.4 3.0 9.9 9.8 9.4 9.3 4.8 1.4 9.5 9.7 5.1 2.2 10.1 10.1 10.2 10.1 9.9 9.7 9.3 9.2 10.0 9.9 5.9 4.2 9.8 9.6 9.8 9.7 5.1 1.7 9.8 9.8 2.4 5.9 5.1 5.2 4.6 4.9 3.9 1.4 4.2 1.9 2.9 2.7 3.1 2.9 9.3 10.5 9.9 9.9 9.9 10.1 10.1 9.2 10.6 9.7 9.8 9.9 10.0 10.0
Fiscal Balance % of GDP 2010 2011 -6.5 -6.0 -7.5 -6.0 -7.2 -6.0 -8.2 -6.3 -7.5 -6.0 -7.7 -5.9 -7.6 -6.2 -8.0 -6.6 -8.0 -6.7 -7.7 -6.3 -8.0 -6.5 -8.3 -6.5 -7.6 -6.0 -8.0 -7.4 -7.8 -6.5 -6.8 -5.5 -7.7 -6.3 -8.0 -7.0 -8.3 -6.8 -7.7 -7.7 -7.8 -7.9 -7.9 -7.4 -5.5 -6.3 -6.3 -6.5 -6.4 -6.4
Public Debt % of GDP 2010 2011 85.0 89.0 84.1 88.4 83.0 87.0 83.9 88.4 83.6 88.6 82.8 86.2 78.1 83.6 84.6 88.9 82.4 85.6 82.9 93.0 84.0 88.0 78.1 84.6 83.3 83.1 83.6 83.7 83.8 83.6 93.0 88.2 87.9 88.8 88.5 88.5
9 | Industry | % variation
10
10 | Unemployment | % of active pop.
12
11 | Fiscal Balance | % of GDP
0
10 0 8
-2
-4
-6 -10 6 France -20 1990 1995 2000 2005 2010 G7 4 1990 1995 2000 2005 2010 France G7 -10 1990 1995 2000 2005 2010 -8 France G7
12 | Industry | evolution of forecasts
6
13 | Unemployment | evolution of fcst
11.0
14 | Fiscal Balance | evolution of fcst
-6
3
10.5
-7
0
10.0
-8 2010 2011
2010 2011 -3 Jun Sep Dec Mar Jun Sep 9.5 Jun Sep
2010 2011 Mar Jun Sep -9 Jun Sep Dec Mar Jun Sep
Dec
FocusEconomics Consensus Forecast
| 27
FOCUSECONOMICS
Monetary Sector | Inflation and Interest Rate
15 | Inflation | 1990 - 2014 | in %
6 France G7 4 4
France
November 2010
16 | Inflation | Q1 07-Q4 11 | in %
6
Inflation and Interest Rate
Consumer Prices variation in % 2010 2011 1.7 1.5 1.7 1.6 1.7 1.6 1.5 1.4 1.7 1.7 1.5 1.6 1.6 0.9 1.6 1.2 1.7 1.5 1.7 1.6 1.8 1.6 1.7 1.6 1.8 2.1 1.5 1.4 1.6 1.7 1.7 1.7 1.7 1.8 1.5 1.5 1.5 1.4 1.7 1.5 1.5 1.6 1.5 1.2 1.5 1.8 1.7 1.6 1.7 1.7 1.6 1.6 1.6 1.7 0.9 2.1 1.6 1.5 1.6 1.6 1.6 1.6 1.6 1.1 10-year Bond Rate in % 2010 2011 2.90 3.40 2.65 3.00 2.85 3.30 2.94 2.69 2.95 3.45 2.50 3.34 2.82 3.25 2.50 2.95 2.83 2.80 2.71 3.12 3.16 2.69 3.45 3.28 3.20 3.22 3.71 3.80 -
2
2
0
0 France G7
-2 1990 1995 2000 2005 2010
-2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
3 Maximum Consensus Minimum
2
2
1
1
0
-1 Jun Sep Dec Mar Jun Sep
0 Jun Sep Dec Mar Jun Sep
19 | 10-year Bond Yield | 1990-2014
12 France 10 Germany
20 | 10-year Bond Yield | Q1 07-Q4 11
5
4
8
Individual Forecasts Asterès BBVA BMO Capital Markets BNP Paribas Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Intesa Sanpaolo JPMorgan Lloyds TSB Nomura Raiffeisen Research Société Générale Toronto-Dominion Bank UBS Unicredit Xerfi Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Eur. Comm. (Sep. 2010) IMF (Oct. 2010) OECD (May 2010)
6
3
4
France Germany 2
1995 2000 2005 2010
2 1990
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
Notes and sources
21 | Policy Rate | Q1 07-Q4 11 | in %
6 Euro area United States Japan
22 | 3-Month Rate | Q1 07-Q4 11
6 Euro area United States Japan 4
4
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All monetary sector data are from the National Statistical Institute (INSEE, Institut national de la statistique et des études économiques), Bank of France (BdF, Banque de France), Federal Reserve Board (Fed), Bank of Japan (BoJ) and the European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual variation in harmonised index of consumer prices (HICP) in % (eop). Source: INSEE. 16 Quarterly inflation, year-on-year variation in consumer price index (CPI) in % (eop). Source: INSEE. 17 Inflation, evolution of 2010 forecasts during the last 18 months. 18 Inflation, evolution of 2011 forecasts since July 2009. 19 10-year benchmark bond yield (eop). Source: ECB, BdF. 20 Quarterly10-year benchmark bond yield (eop). Source: ECB, BdF. 21 Quarterly policy rate in % (eop). Source: ECB, Fed, BoJ. 22 Quarterly 3-month benchmark rate in % (eop). Source: ECB, Fed, BoJ.
2
2
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
FocusEconomics Consensus Forecast
| 28
FOCUSECONOMICS
External Sector | Current Account and Trade Balance
23 | Current Account | % of GDP
6 France G7
France
November 2010
24 | Current Account | EUR bn
50
Current Account Balance | EUR bn
3
0
0
-50
-3 1990 1995 2000 2005 2010
-100 1990 1995 2000 2005 2010
25 | Current Account 2010 | evol. of fcst
0
26 | Current Account 2011 | evol. of fcst
60 Maximum Consensus Minimum
-50
0
-100 Maximum Consensus Minimum -150 Jun Sep Dec Mar Jun Sep
-60
-120 Jun Sep Dec Mar Jun Sep
27 | Trade Balance | EUR bn
750 Trade Balance Exports Imports
28 | Trade Balance | evolution of fcst
-20 2010 2011 -40
Individual Forecasts Asterès BBVA BMO Capital Markets BNP Paribas Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING Intesa Sanpaolo JPMorgan Lloyds TSB Nomura Raiffeisen Research Société Générale Toronto-Dominion Bank UBS Unicredit Xerfi Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
2010 -41.0 -33.2 -35.6 -45.6 -31.8 -50.3 -37.4 -37.9 -39.6 -34.3 -50.3 -31.8 -37.6 -38.7 -41.8 -40.5 -44.0
2011 -48.0 -9.5 -36.7 -45.0 -22.6 -59.5 -40.6 -40.7 -38.7 -42.4 -59.5 -9.5 -40.6 -38.4 -42.1 -40.0 -45.1
500
250
-60
0
-250 1990 1995 2000 2005 2010
-80 Jun Sep Dec Mar Jun Sep
29 | Exports | variation in %
30
30 | Imports | variation in %
45
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All external sector data are from the National Statistical Institute (INSEE, Institut national de la statistique et des études économiques). Forecasts based on FocusEconomics Consensus Forecast. 23 Current account balance as % of GDP. 24 Current account balance in EUR bn. 25 Current account in EUR bn, evolution of 2010 forecast during the last 18 months. 26 Current account in EUR bn, evolution of 2011 forecast since July 2009. 27 Trade balance, imports and exports, in EUR bn. 28 Trade Balance in EUR bn, evolution of 2010 and 2011 forecasts since July 2009. 29 Exports, annual variation in %. 30 Imports, annual variation in %.
15
30
15
0
0
-15 France G7 -30 1990 1995 2000 2005 2010
-15 France -30 1990 1995 2000 2005 2010 G7
FocusEconomics Consensus Forecast
| 29
FOCUSECONOMICS
Germany
November 2010
Germany
Germany
Outlook improves
• Recent data suggest that the recovery shows no signs of cooling. In August, industrial production grew 1.7% month-on-month, exceeding even upbeat market expectations. Moreover, unemployment fell below 3 million in October, the lowest level in 18 years, buttressing consumer confidence and supporting household consumption. In addition, business confidence jumped to a new record high, bolstering the notion of accelerating domestic demand in the months ahead. Consensus Forecast participants lifted their forecasts by 0.2 percentage points over last month’s estimate and now expect the economy to expand 3.3% this year. In 2011, the economy is expected to grow 2.2%. In October, annual inflation remained unchanged at 1.3%, according to preliminary estimates. Consensus Forecast participants see inflation averaging 1.1% this year, which is unchanged from last month’s projection. Next year, inflation should rise to 1.4%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 82.5 2,139 25,938 1.1 -3.1 61.7 1.5 1.4 2005-09 82.2 2,376 28,900 0.6 -1.6 68.0 1.7 6.2 2010-14 81.8 2,657 32,487 2.3 -2.9 79.0 1.4 4.9
•
•
Ricardo Aceves
Economist
REAL SECTOR | Industrial output expands more than expected In August, industrial production expanded 1.7% in seasonal and calendar adjusted terms over the previous month. The monthly expansion came in well above the 0.1% increase observed in July and overshot market expectations, which had industrial production growing 0.5%. The strong monthly figure mainly reflected a sharp expansion in manufacturing, which grew 1.8% month-on-month, contrasting the 0.2% contraction tallied in July. In addition, investment goods production jumped 2.4% over the previous month (July: -1.0% mom), while durable goods production posted a strong 2.4% increase (July: -0.2% mom). As a result of August’s reading, the trend in industrial production continued to points upwards with annual average variation in industrial production jumping from 1.0% in July to 3.4% in August which marked the highest level since September 2008. Consensus Forecast panellists see industrial production rising 9.2% this year, which is 0.8 percentage points up from the last month’s estimate. For 2011, the panel expects industrial production to rise to 3.6%. Meanwhile, the Central Bank expects the economy to grow 3.0% this year, up from the previous 1.9% estimate. Consensus Forecast panelists are more optimistic than the Central Bank and see the economy growing 3.3% this year, which is 0.2 percentage points above last month’s projection. For next year, the panel forecasts GDP growth at 2.2%.
Industrial Production | variation in %
4.0 MoM s.a. (left scale) Annual average YoY (right scale) 3.0 1.9 3.7 2.9 5.0
0.0
2.0 % 1.0
1.9 1.1 0.8 0.4 0.1
1.7
-5.0 % -10.0
0.0 -0.5 -0.3 -0.5
-15.0
-1.0
-0.7 Aug Sep Oct
-20.0 Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: Federal Statistical Office and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 30
FOCUSECONOMICS
Germany
November 2010
OUTLOOK | Consumer confidence remains steady in November Consumer confidence remains stable, as the economy experiences a considerable upswing, sustained by a solid labour market. The forward-looking consumer confidence indicator for November, released by the GfK Institute remained steady at October’s 4.9 points, confirming consumer sentiment at highest level since May 2008. The figure nevertheless, fell short of private sector analysts’ expectations, which had seen consumer confidence rising further to 5.1 points.
GfK Consumer Climate
9.0
7.0
While the GfK’s overall consumer confidence indicator refers to November, the institute also published three sub-indices (economic expectations, income expectations and propensity to buy), which refer to October. According to the survey, economic expectations improved over the previous month, while income expectations and buying propensity deteriorated. The economic expectations index continued its positive trend and rose by 2.5 points in October, pushing the index to 56.0 points, which represents the highest level in more than three years. The optimistic assessment mainly reflected a rosier view of the economic recovery, aided by the positive trend in the labour market, with Consensus Forecast panellists expecting unemployment to decline from an average 8.2% in 2009 to an average 7.7% in 2010. Income expectations did not profit from improving economic prospects and fell by 9.2 points in October to 36.0 points, after rising to a nine-year high in September. According to Gfk, the fall may be due to an anticipated rise in electricity prices and the announcement of municipalities to increase fees and charges. Finally, the propensity to buy declined by 8.2 points in October to 22.5 points, amid less upbeat income expectations. Nevertheless, the sub-index is far above its 0-point long-term average. OUTLOOK | Business confidence climbs to the highest level in more than three years Business confidence continues to rise, suggesting that the recovery will remain strong. The Ifo Business Climate Index for industry and trade rose to 107.6 points in October from 106.8 points in September, defying market expectations, which had expected the index to fall to 106.4 points. The October reading marked the sixth consecutive month of improving sentiment, driving the index to the highest level since May 2007. Business confidence improved as both components increased over the previous month. The current business situation component increased from 109.8 points in September to 110.2 points in October, remaining on its positive trend started in February. In addition, the business expectations indicator jumped from 103.9 points in September to 105.1 points. At the sector level, firms in the manufacturing sector reported their current business situation to be slightly more favourable than in the previous month and were even more upbeat about their prospects. Meanwhile, businesses in the construction sector reported a somewhat less favourable current business situation compared to September, but they evaluated their future business prospects as more positive. Wholesaling businesses gave a more positive assessment of both their current and future business situation. Only retail respondents assessed their current business situation, as well as their future business expectations as less
5.0
3.0
1.0
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Note: GfK Consumer Climate Index. Source: The GfK Group.
Ifo Business Climate
110
105
100
95
90
85
80
Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: Ifo Business Climate Index, 2000=100. Source: Ifo Business Survey.
FocusEconomics Consensus Forecast
| 31
FOCUSECONOMICS
Germany
November 2010
favourable than in September. Nevertheless, retail firms still maintain a healthy business sentiment. MONETARY SECTOR | Inflation remains subdued in October In October, consumer prices rose 0.1%, according to a preliminary flash estimate released on 27 October by the Federal Statistics Office (Destatis). The monthly increase contrasted the 0.1% drop observed in September, but was in line with market expectation. Annual inflation remained unchanged at September’s 1.3%, which is the highest level since November 2008. At the current rate, inflation is still below the European Central Bank’s definition of price stability. Final results will be published on 9 November. According to the flash report, the main drivers of the October increase were higher prices for petroleum products, as well as for fruits and vegetables. Moreover, annual harmonised consumer price inflation (HICP) followed the developments of the consumer price index (CPI) and remained at September’s 1.3%. The federal government estimates inflation to average 1.3% this year and 1.4% in 2011, while the Bundesbank expects inflation to rise to 1.2% this year and to 1.6% in 2011. Consensus Forecast panellists see average inflation rising to 1.1% in 2010, which is unchanged from previous month’s forecast. For 2011, panellists expect inflation to reach 1.4%. EXTERNAL SECTOR | Exports decline in August Exports fell for a second consecutive month, amid signs of a slowdown in global demand and a strengthening euro. In August, exports slipped 0.4% in seasonally and working day adjusted terms over the previous month. However, the monthly reading came in above the 1.6% contraction observed in July and was virtually in line with market expectations of a 0.3% drop. Simultaneously, imports grew 0.9% over the previous month, contrasting the 2.2% decline registered in July.
Exports Imports
Inflation | Consumer Price Index
1.0 0.8 1.5
0.5 0.1 0.0 % -0.5 -0.6 -1.0 -0.1
0.5 0.4 0.1 0.1 0.3 0.0 -0.1 0.1
1.0
0.5 % 0.0
-0.1
monthly (left scale) annual (right scale) -0.5 Apr May Jun Jul Aug Sep Oct
Oct Nov Dec Jan Feb Mar
Note: Monthly and annual consumer price index variation in %. Source: Federal Statistical Office and FocusEconomics calculations.
Merchandise Trade | EUR bn
120
Trade Balance
100
80
60
40
On an annual basis, exports expanded 26.8% in August, up from the 18.6% increase tallied in July. Imports rose 29.2% in August, also above the 24.9% expansion recorded in July. As a result, the trade balance narrowed from EUR 9.1 billion in July to EUR 4.6 billion in August, which marked the second lowest level so far this year. Exports are likely to continue expanding on an annual basis, albeit at a more moderate pace, as slowing global demand and a stronger euro diminish the sales prospects outside the European Union. Consensus Forecast participants estimate exports to grow 16.9% this year and 9.8% in 2011. Even as trade flows are recovering this year, exports will fall short of the EUR 984 billion level recorded in 2008. Only in 2011, German exports will surpass the pre-crisis level with an expected export value of EUR 1.0 trillion.
20
0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: Monthly exports and imports in EUR billion. Source: Federal Statistical Office and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 32
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (ann. var. in %) Private Consumption (ann. var. in %) Government Consumption (ann. var. in %) Fixed Investment (ann. var. in %) Industrial Production (ann. var. in %) Retail Sales (ann. var. in %) Car Sales (million) Housing Starts (million) Disposable Income (ann. var. in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (CPI, annual variation in %) Inflation (CPI, annual average variation in %) Inflation (WPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (DAX variation in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2005 82.4 27,199 2,242 0.8 0.0 0.3 0.4 0.9 2.5 1.8 3.3 0.24 1.8 11.7 -3.3 68.0 1.4 1.6 2.8 2.25 2.49 3.26 27.1 1.18 1.24 5.1 115 158 786 628 7.5 9.1 2006 82.3 28,271 2,327 3.4 2.4 1.4 1.0 8.0 5.3 1.0 3.5 0.25 2.4 10.8 -1.6 67.6 1.4 1.6 3.3 3.50 3.73 3.94 22.0 1.32 1.26 6.5 150 159 893 734 13.6 16.9
Germany
November 2010
2007 82.2 29,592 2,432 2.7 1.2 -0.2 1.6 4.7 5.6 -1.6 3.1 0.18 1.6 9.0 0.2 65.0 3.1 2.3 5.9 4.00 4.68 4.34 22.3 1.46 1.37 7.7 188 198 977 779 9.4 6.1
2008 82.1 30,218 2,481 1.0 1.2 0.7 2.3 2.5 0.6 2.3 3.1 0.17 3.1 7.8 0.0 66.0 1.1 2.6 -4.2 2.50 2.89 2.93 -40.4 1.39 1.47 6.7 167 178 984 806 0.7 3.5
2009 82.0 29,222 2,397 -4.7 -1.9 -0.2 2.9 -10.1 -15.5 -5.0 3.8 0.18 0.4 8.2 -3.1 73.2 0.9 0.3 0.2 1.00 0.70 3.32 23.8 1.43 1.39 4.9 117 136 803 667 -18.4 -17.2
2010 82.0 30,209 2,476 3.3 2.3 0.1 5.4 9.2 7.7 -4.2 78.6 1.1 1.00 0.97 2.63 1.33 1.38 5.1 126 159 939 775 16.9 16.1
2011 81.9 31,328 2,565 2.2 1.6 1.2 3.6 3.6 7.3 -3.4 79.9 1.4 1.17 1.37 3.17 1.30 1.31 5.3 135 176 1,031 848 9.8 9.4
2012 81.8 32,439 2,653 1.9 1.9 1.2 2.9 2.7 7.0 -2.8 77.4 1.5 2.10 2.18 3.21 1.26 1.28 5.1 136 196 1,121 921 8.8 8.6
2013 81.7 33,587 2,744 1.9 1.9 1.6 3.9 3.2 6.6 -2.2 79.3 1.6 2.80 2.90 3.73 1.26 1.26 4.6 127 215 1,214 999 8.2 8.5
2014 81.6 34,873 2,845 2.1 2.2 1.7 4.0 3.3 6.3 -1.8 79.8 1.6 3.08 2.92 4.17 1.25 1.25 4.5 128 223 1,309 1,086 7.8 8.7
Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, s.a. qoq var. in %) Domestic Demand (s.a. qoq var. in %) Private Consumption (s.a. qoq var. in %) Fixed Investment (s.a. qoq var. in %) Industrial Production (ann. var. in %) Unemployment (aop, % of active population) Inflation (CPI, annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Current Account Balance (EUR bn)
Q3 09 -4.4 0.7 1.1 -1.0 0.8 -14.7 8.3 -0.2 1.00 0.75 3.20 1.46 25.3
Q4 09 -2.0 0.3 -1.6 -0.2 -0.8 -6.4 8.1 0.4 1.00 0.70 3.32 1.43 47.3
Q1 10 2.0 0.5 1.7 -0.1 1.2 6.8 8.1 0.8 1.00 0.63 3.10 1.35 31.7
Q2 10 3.7 2.2 1.4 0.6 4.7 13.5 7.7 1.1 1.00 0.77 2.49 1.22 25.9
Q3 10 3.7 0.6 0.3 0.5 1.1 4.7 7.5 1.2 1.00 0.89 2.22 1.37 35.2
Q4 10 3.9 0.5 0.4 0.3 1.3 3.0 7.4 1.4 1.00 0.97 2.63 1.33 37.9
Q1 11 3.8 0.3 0.2 0.2 0.4 3.0 7.3 1.4 1.00 1.10 2.69 1.35 37.2
Q2 11 1.9 0.4 0.2 0.2 0.5 3.4 7.3 1.4 1.03 1.25 2.85 1.35 37.3
Q3 11 1.7 0.4 0.2 0.2 0.6 3.7 7.2 1.5 1.07 1.39 3.01 1.34 35.9
Q4 11 1.6 0.5 0.3 0.3 0.7 4.3 7.1 1.5 1.17 1.37 3.17 1.30 37.0
Monthly Data Industrial Production (ann. var. in %) Industrial Production (s.a. mom var. in %) Retail Sales (ann. var. in %) Unemployment (% of active population) GfK Consumer Climate Ifo Business Climate (2000=100) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop)
Feb-10 6.0 -0.3 1.0 8.7 3.3 95.4 0.4 0.6 1.36
Mar-10 13.0 3.7 5.8 8.5 3.2 98.3 0.5 1.1 1.35
Apr-10 13.6 1.1 -3.6 8.1 3.4 101.7 -0.1 1.0 1.32
May-10 12.6 2.9 0.2 7.7 3.7 101.6 0.1 1.2 1.23
Jun-10 14.2 -0.5 5.0 7.5 3.5 101.9 0.1 0.9 1.22
Jul-10 7.3 0.1 2.4 7.6 3.6 106.2 0.3 1.2 1.30
Aug-10 14.4 1.7 3.1 7.6 4.0 106.7 0.0 1.0 1.28
Sep-10 0.4 7.2 4.3 106.8 -0.1 1.3 1.37
Oct-10 7.0 4.9 107.6 0.1 1.3 1.39
Nov-10 4.9 -
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1990 - 2014 | % variation
6
Germany
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
4
Real GDP growth in %
3
2
0
0
-3 Germany World -6 1990 1995 2000 2005 2010 G7
-2 Germany G7
-4
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
4
4 | GDP 2011 | evolution of forecasts
4 Maximum Consensus Minimum
3
3
2
2
1 Maximum Consensus Minimum -1 Jun Sep Dec Mar Jun Sep
0 Jul Sep Nov Jan Mar 1
0
5 | Consumption | % variation
6 Germany G7 4
6 | Investment | % variation
12
6
0 2 -6 0
Individual Forecasts Allianz BBVA BHF Bank BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DIW Berlin DZ Bank Experian Goldman Sachs HWWI Ifo Institut ING Financial Markets Intesa Sanpaolo JPMorgan Kiel Institute M.M.Warburg & CO Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts European Comission (Sep. 2010) IMF (Oct. 2010) Central Bank (Aug. 2010)
Notes and sources
2010 3.3 3.2 3.5 3.3 3.4 3.3 3.1 3.5 3.4 3.4 3.4 3.6 3.1 3.1 3.4 3.5 3.5 3.2 3.3 3.4 3.3 3.3 3.3 3.3 3.2 3.1 3.6 3.3 3.3 3.1 2.4 2.0 3.4 3.3 3.0
2011 2.0 1.8 3.0 2.1 2.4 2.0 2.1 3.2 1.8 1.7 2.0 2.5 1.9 2.4 2.5 2.0 2.0 2.2 2.4 1.7 1.8 2.5 2.0 2.2 1.9 1.7 3.2 2.0 2.2 2.0 1.9 1.8 1.6 2.0 -
-12 Germany G7 2005 2010
-2 1990 1995 2000 2005 2010
-18 1990 1995 2000
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All real sector data are from the Federal Statistical Office (Destatis, Statistisches Bundesamt Deutschland) and the German Central Bank (BBK, Deutsche Bundesbank). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: Destatis. 2 Quarterly GDP (seasonally adjusted), quarter-on-quarter variation in %. Source: Destatis. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts since July 2009. 5 Private consumption, annual variation in %. Source: Destatis. 6 Gross fixed capital formation, annual variation in %. Source: Destatis. 7 Private consumption, change in 2010 and 2011 forecasts since July 2009. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since July 2009. 9 Industrial production, annual variation in %. Source: Destatis. 10 Unemployment, % of active population. Source: Destatis. 11 Balance of non-financial public sector, % of GDP. Source: BBK. 12 Industrial production, evolution of 2010 and 2011 forecasts since July 2009. 13 Unemployment, evolution of 2010 and 2011 forecasts since July 2009. 14 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since July 2009.
7 | Consumption | evolution of fcst
2.0 2010 2011
8 | Investment | evolution of forecasts
6
4 1.0 2 0.0 0 2010 -1.0 Jul Oct Jan Apr Jul Oct -2 Jul Oct Jan Apr Jul Oct 2011
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.2 1.3 0.0 0.9 0.2 1.7 0.0 1.4 0.0 2.2 0.1 1.1 0.0 0.9 0.0 0.5 0.1 1.1 0.2 1.7 -0.2 0.7 0.0 1.5 0.1 1.4 -0.1 0.8 0.0 1.0 0.6 2.2 0.0 1.0 0.0 1.3 -0.1 0.9 0.0 1.1 -0.2 0.6 0.0 0.1 -0.2 -0.8 -0.9 0.5 2.2 1.1 1.2 1.0 0.8 0.7
Germany
Investment % variation 2010 2011 5.3 2.8 5.3 2.9 4.7 3.1 6.3 6.4 5.6 6.7 6.0 2.3 5.2 2.0 5.7 3.8 6.4 4.3 5.5 3.0 5.1 2.7 5.7 3.3 5.2 3.0 4.5 3.3 5.2 2.9 6.0 4.6 5.0 4.5 5.0 2.4 4.5 6.4 5.3 5.4 4.4 2.0 1.7 2.0 6.7 3.1 3.6 3.3 3.1 3.1 Industry % variation 2010 2011 10.6 4.4 9.4 2.3 6.1 3.6 10.0 4.0 8.8 3.0 9.7 3.4 10.0 4.5 6.1 10.6 9.7 9.2 8.4 7.3 6.8 2.3 4.5 3.6 3.6 3.3 3.5 3.7 Unemployment % of active pop. 2010 2011 7.7 7.0 7.7 7.2 7.7 7.4 7.7 7.2 7.7 7.2 7.7 7.7 7.8 7.6 7.7 7.5 7.7 6.9 7.7 7.5 7.0 7.7 7.0 7.7 7.4 7.8 7.7 7.7 7.0 7.8 7.3 7.9 7.9 7.7 7.5 7.7 7.2 7.5 7.9 7.7 7.7 7.7 7.8 7.9 6.9 7.9 7.3 7.3 7.4 7.5 7.6 Fiscal Balance % of GDP 2010 2011 -3.9 -2.8 -4.2 -3.5 -4.2 -3.8 -4.0 -2.9 -5.6 -4.5 -4.2 -3.2 -4.3 -3.2 -5.5 -4.8 -3.9 -3.0 -4.0 -3.3 -3.7 -3.1 -5.2 -4.0 -3.6 -2.8 -3.4 -2.1 -3.8 -2.7 -3.3 -3.1 -4.4 -4.1 -3.9 -3.4 -4.3 -3.2 -4.4 -3.7 -5.0 -4.7 -4.8 -3.8 -3.5 -2.6 -5.6 -3.3 -4.2 -4.2 -4.5 -4.8 -4.9 -4.8 -2.1 -3.2 -3.4 -3.6 -4.0 -4.1
November 2010
Individual Forecasts Allianz BBVA BHF Bank BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DIW Berlin DZ Bank Experian Goldman Sachs HWWI Ifo Institut ING Financial Markets Intesa Sanpaolo JPMorgan Kiel Institute M.M.Warburg & CO Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
9 | Industry | % variation
10
Public Debt % of GDP 2010 2011 88.8 89.1 75.4 76.7 78.8 81.6 74.7 75.5 73.5 74.0 77.1 78.6 78.8 81.6 75.0 76.3 85.0 86.0 73.5 88.8 77.1 78.6 76.7 76.9 76.5 74.0 89.1 78.6 79.9 77.7 79.0 78.8
10 | Unemployment | % of active pop.
12
11 | Fiscal Balance | % of GDP
5
10
0
8
0
-10
6
-5
Germany -20 1990 1995 2000
G7
4
Germany
G7 -10 2005 2010 1990
Germany 1995
G7 2005 2010
2005
2010
1990
1995
2000
2000
12 | Industry | evolution of forecasts
10
13 | Unemployment | evolution of fcst
11
14 | Fiscal Balance | evolution of fcst
-3
10 5 9 0 8 2010 -5 Jul Oct Jan Apr Jul Oct 2011 7 Jul Oct Jan Apr Jul Oct 2010 2011
-4
-5
-6 2010 -7 Jul Oct Jan Apr Jul Oct 2011
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Monetary Sector | Inflation and Interest Rate
15 | Inflation | 1990 - 2014 | in %
6
Germany
November 2010
16 | Inflation | Q1 07 - Q4 11 | in %
6 Germany G7
Inflation and Interest Rate
Consumer Prices variation in % 2010 2011 1.1 1.5 1.1 1.3 1.0 1.3 1.1 1.4 1.2 1.7 0.9 1.4 1.2 1.5 1.4 1.4 1.1 1.6 1.2 1.5 1.1 1.5 1.1 1.4 1.0 1.2 1.1 1.5 1.0 1.5 1.1 1.6 1.0 1.6 1.1 1.4 1.1 0.7 1.1 1.6 1.0 1.2 1.1 1.7 1.1 1.2 1.2 2.0 1.1 1.4 0.9 1.4 1.1 1.1 1.1 1.1 1.1 1.1 1.3 1.2 0.7 2.0 1.5 1.4 1.4 1.4 1.4 1.5 1.4 1.6 10-year Bond Rate in % 2010 2011 2.70 3.10 2.30 2.70 2.50 3.00 2.00 3.00 2.70 3.75 2.30 3.20 3.60 3.30 3.60 3.40 3.30 3.80 2.40 3.00 2.40 3.00 2.22 2.80 2.30 2.70 3.20 2.40 3.20 2.25 3.00 2.00 3.60 2.40 2.63 2.67 2.95 3.06 2.70 3.80 3.05 3.17 3.34 3.58 3.68 -
4
4
2
2
0 Germany -2 1990 1995 2000 2005 2010 G7
0
-2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
3 Maximum Consensus Minimum
2
2
1
1
0
-1 Jun Sep Dec Mar Jun Sep
0 Jul Oct Jan Apr Jul Oct
19 | 10-year Bond Rate | 1990 - 2014
16 France Germany Italy
20 | 10-year Bond Rate | Q1 07 - Q4 11
6
12
5
8
4
Individual Forecasts Allianz BBVA BHF Bank BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DIW Berlin DZ Bank Experian Goldman Sachs HWWI Ifo Institut ING Financial Markets Intesa Sanpaolo JPMorgan Kiel Institute M.M.Warburg & CO Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Euro. Comm. (Sep. 2010) IMF (Oct. 2010) Central Bank (Aug. 2010)
4
3
0 1990 1995 2000 2005 2010
2
France Germany Italy
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All monetary sector data are from the Federal Statistical Office (Destatis, Statistisches Bundesamt Deutschland), the German Central Bank (BBK, Deutsche Bundesbank), Bank of France (BdF, Banque de France), Federal Reserve Board (Fed), Bank of Japan (BoJ), and the European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in consumer price index (CPI) in %. Source: Destatis. 16 Quarterly inflation, year-on-year variation in consumer price index (CPI) in %. Source: Destatis. 17 Inflation, evolution of 2010 forecasts during the last 18 months. 18 Inflation, evolution of 2011 forecasts since July 2009. 19 10-year benchmark bond yield (eop). Source: BBK, BdF, ECB. 20 10-year benchmark bond yield (eop). Source: BBK, BdF, ECB. 21 Policy rate (eop). Source: BoJ, ECB, Fed. 22 3-month market rate (eop). Source: BoJ, ECB, Fed.
21 | Policy Rate | Q1 07 - Q4 11
6 Euro area United States Japan
22 | 3-month Rate | Q1 07 - Q4 11
6 Euro area United States Japan 4
4
2
2
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
External Sector | Current Account and Trade Balance
23 | Current Account | % of GDP
9 Germany 6 G7
Germany
November 2010
24 | Current Account | EUR bn
200
Current Account Balance | EUR bn
150
100
3
50
0
0
-3 1990 1995 2000 2005 2010
-50 1990 1995 2000 2005 2010
25 | Current Account 2010 | evol. of fcst
200
26 | Current Account 2011 | evol. of fcst
250
150
200
150
100
100
50 Maximum Consensus Minimum 0 Jun Sep Dec Mar Jun Sep
50
Maximum Consensus Minimum Jul Oct Jan Apr Jul Oct
0
27 | Current Account | EUR bn
60
28 | Trade Balance | EUR bn
1,500 Trade Balance Exports Imports
50
1,200
Individual Forecasts Allianz BBVA BHF Bank BNP Paribas Citigroup Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank DIW Berlin DZ Bank Experian Goldman Sachs HWWI Ifo Institut ING Financial Markets Intesa Sanpaolo JPMorgan Kiel Institute M.M.Warburg & CO Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
2010 127 125 136 128 130 111 119 92 134 123 140 138 106 125 128 135 130 130 140 119 92 140 128 126 126 129 130
2011 144 160 141 125 151 141 123 87 128 123 135 160 87 140 142 153 150 116 186 113 87 186 140 135 134 137 138
900
40
600
30
300
20 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
0 1990 1995 2000 2005 2010
29 | Exports | variation in %
30
30 | Imports | variation in %
40
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All external sector data are from the Deutsche Bundesbank. Forecasts based on FocusEconomics Consensus Forecast. 23 Current account balance as % of GDP. 24 Current account balance in EUR bn. 25 Current account in EUR bn, evolution of 2010 forecast during the last 18 months. 26 Current account in EUR bn, evolution of 2011 forecast since July 2009. 27 Quarterly current account balance, in EUR bn. 28 Trade balance, imports and exports, in EUR bn. 29 Exports, annual variation in %. 30 Imports, annual variation in %.
20
20
10 0 0 -20 Germany -20 1990 1995 2000 2005 2010 G7 -40 1990 1995 2000 2005 2010 Germany G7
-10
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Italy
November 2010
Italy
Italy
Outlook improves
• On 14 October, the government approved the draft budget for next year. The budget paves the way for a series of spending cuts and tax increases totalling EUR 25 billion, which were already approved by the parliament during the summer, including a wage-freeze in the public sector. Amid a continued recovery in industrial production and strong readings in business and consumer sentiment, Consensus Forecast panellists lifted last month’s growth estimate by 0.1 percentage points and now see the economy growing 1.1% in 2010. For 2011, the panel expects the economy to grow 1.1%. Preliminary data for October show inflation inching up from September’s 1.6% to 1.7%. Panellists see inflation averaging 1.6% in 2010, unchanged from last month’s forecast. Next year, panellists see inflation averaging 1.7%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 57.2 1,292 22,581 1.5 -2.8 106 2.5 -0.7 2005-09 59.2 1,510 25,516 -0.4 -3.4 108 2.1 -2.7 2010-14 60.7 1,638 27,005 1.2 -3.9 121 1.8 -2.7
•
•
Armando Ciccarelli
Senior Economist
REAL SECTOR | Industrial production rises unexpectedly In August, industrial output increased 1.6% over the month before in seasonally-adjusted terms. The figure came in above the 0.3% increase recorded in July and contrasted market expectations of a 0.1% drop. At a sector level, the improvement compared to the previous month was led by the all-important manufacturing sector, the only one to record a better performance compared to July. Manufacturing jumped 2.0% over the previous month, up from the 0.2% month-on-month increase recorded in July. Mining and quarrying dropped 4.0% mom, contrasting the 4.8% mom increase recorded in July and, finally electricity, gas and water supply fell 2.8% mom (July: +5.4% mom). On an annual basis, industrial output rose a calendar adjusted 9.5%, which was up from the previous month’s 5.6% increase. The result marked the sharpest increase since December 1997, but was favoured by a low calculation base, as industrial output had plunged 18.0% in August 2009. As a consequence of the positive monthly reading, the trend continued to improve, as the annual average growth in industrial production stepped up from minus 1.9% in July to minus 0.5%. Consensus Forecast panellists see industrial production growing 5.7% this year, which is 0.7 points above last month’s projection. For 2011, panellists see industrial production growing 2.4%. OUTLOOK | Consumer confidence surprises to the upside The index of consumer sentiment from the Institute for Studies and Economic Analyses (ISAE, Istituto di Studi e Analisi Economica) jumped from 107.2 points in September to 107.7 points in October, a result that surprised market analysts, which had seen confidence dropping to 106.5 points. The monthly figure
Industrial Production | variation in %
3.0 1.9 1.5 1.0 1.1 0.5 0.0 % -0.7 -1.5 -1.9 -3.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug -20 -15 0.3 0.2 MoM s.a. (left scale) Annual average YoY (right scale) 1.0 1.0 0.6 0.3 -5 % -10 1.6 5
0
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: National Statistical Institute (ISTAT) and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 38
FOCUSECONOMICS
Italy
November 2010
Consumer Confidence
marked the strongest confidence result since the beginning of the year, but nonetheless confirmed that confidence remains below its long-term average value of 113. The consumer sentiment gauge rose, as households maintained a more upbeat assessment of the country’s economic situation. In particular, the general index relative to the opinion on the country’s situation inched up compared to the previous month, while short-term expectations and expectations relative to the developments in the labour market were unchanged compared to the previous month. On the other hand, respondents to the survey expressed a less upbeat assessment of their personal finances, as more households expected their personal financial situation to deteriorate in the months to come, leading to deteriorating prospects on purchases of durable goods. OUTLOOK | Business confidence unexpectedly rises in October In October, the manufacturing sentiment index published by the Institute for Studies and Economic Analyses (ISAE, Istituto di Studi e Analisi Economica) rose to 99.8 points. The figure came up from the revised 98.6 points recorded in August (previously reported: 98.4 points) and confirmed the upward trend in business sentiment in place since March 2009. The result contrasted market
120
long-term average 110 Points 100 90 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Note: Monthly consumer confidence index; long-term average at 113. Source: Institute for Studies and Economic Analyses (ISAE).
Business Confidence
expectations, which had seen business sentiment inching down to 98.5, and marked the strongest result since May 2008, thus confirming the notion that business confidence is now back to pre-crisis levels. According to ISAE, the improvement in business sentiment was led by a more optimistic assessment of demand, in particular from the external sector. In addition, the evaluation of current production improved compared to the previous month. Meanwhile, businesses’ expectations relative to future production continued to rise, as manufacturers expect orders to increase going forward. Finally, contrasting the positive outlook on production expectations, respondents
120
100 Points 80 60 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
to the survey maintain less optimistic opinions relative to the developments of the general economy in the months to come. The Ministry of the Economy sees the economy growing 1.2% this year and 1.3% in 2011, while the Central Bank is less optimistic and sees the economy expanding 1.0% both in 2010 and 2011. Consensus Forecast panellists see the economy expanding 1.1% in 2010, which is up 0.1 percentage points from last month’s forecast. The panel expects a 1.1% increase also in 2011, which is unchanged from last month’s forecast.
Note: Value of monthly business confidence index. Source: Institute for Studies and Economic Analyses (ISAE).
Inflation | Consumer Price Index
0.4 0.3 0.2 0.2 0.1 0.0 % -0.2 0.0 0.1 0.1 0.1 0.0 1.0 % 0.5 -0.2 0.2 0.2 1.5 0.4 0.4 2.0
MONETARY SECTOR | Inflation inches up in October According to a preliminary report released on 29 October, consumer prices (including tobacco) rose 0.2% over the previous month in October, which contrasted the 0.2% price drop recorded in September. As a result of the monthly increase, annual inflation inched up from September’s 1.6% to 1.7%, slightly above market expectations which saw inflation remaining unchanged. Higher prices for alcoholic beverages as well as for education were the main drivers behind the monthly price increase. Meanwhile, annual average harmonised inflation (HICP) increased from 1.3% in September to 1.5%, which is the highest level since August 2009. Consensus Forecast panellists expect inflation to average 1.6% this year, which is unchanged from last month’s forecast. Next year, panellists see inflation averaging 1.7%, which also unchanged from last month’s forecast.
monthly (left scale) annual (right scale)
-0.4 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
0.0
Note: Year-on-year and month-on-month var. of consumer price index in %. Source: National Statistical Institute (ISTAT).
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Retail Sales (annual variation in %) Car Registrations (mn) Disposable Income (annual var. in %) Hourly Wages (annual % var.) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (CPI, annual average var. in %) Inflation (HICP, annual variation in %) Inflation (HICP, annual average var. in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Benchmark BTP 10-year Yield (%, eop) Stock Market (var. of FTSE MIB in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2005 58.5 24,451 1,429 0.8 1.3 1.1 1.9 1.4 -0.7 1.0 2.2 2.5 2.5 7.7 -4.3 106 2.0 2.1 2.2 3.5 2.25 2.49 3.50 15.5 1.18 1.24 -1.7 -23.6 0.5 299 299 5.7 8.9 2006 58.8 25,282 1,485 2.1 1.5 1.2 0.5 3.1 3.5 2.0 2.3 3.7 3.1 6.8 -3.3 107 2.1 2.1 2.2 3.6 3.50 3.73 4.21 16.0 1.32 1.26 -2.6 -38.3 -10.2 333 343 11.1 14.8
Italy
November 2010
2007 59.1 26,148 1,546 1.4 1.1 1.1 0.9 1.3 1.8 1.1 2.5 3.4 2.2 6.1 -1.5 104 1.8 2.8 2.0 5.3 4.00 4.68 4.67 -7.0 1.46 1.37 -2.4 -37.7 3.2 366 362 9.9 5.7
2008 59.6 26,298 1,568 -1.3 -1.2 -0.8 0.8 -4.0 -3.5 -2.3 2.2 0.0 3.7 6.8 -2.7 106 3.3 2.4 3.5 -0.5 2.50 2.89 4.49 -49.5 1.39 1.47 -3.6 -56.8 -2.1 370 372 1.1 2.6
2009 59.9 25,401 1,521 -5.1 -3.5 -1.8 0.6 -12.2 -17.5 -0.2 2.2 -2.5 3.0 7.8 -5.3 116 0.8 1.1 0.8 -1.5 1.00 0.70 4.12 19.5 1.43 1.39 -3.2 -49.4 1.7 292 291 -20.9 -21.9
2010 60.1 25,616 1,540 1.1 0.7 0.5 1.5 5.7 -1.1 1.8 8.5 -5.0 119 1.6 1.00 0.97 3.75 1.33 1.38 -3.2 -49.6 2.1 316 312 8.2 7.3
2011 60.4 26,233 1,584 1.1 0.7 0.7 1.3 2.4 0.2 2.1 8.6 -4.3 120 1.7 1.17 1.37 3.99 1.30 1.31 -2.7 -43.5 7.2 335 327 6.0 4.7
2012 60.7 26,930 1,633 1.2 0.9 1.1 2.0 2.1 0.8 2.6 8.1 -3.7 121 1.9 2.10 2.18 4.37 1.26 1.28 -2.6 -41.7 11.8 359 347 7.0 6.3
2013 60.9 27,714 1,688 1.4 1.5 1.5 2.6 1.7 1.0 2.8 8.1 -3.5 122 1.9 2.80 2.90 5.09 1.26 1.26 -2.5 -42.0 10.1 383 374 6.9 7.7
2014 61.2 28,533 1,745 1.4 1.3 1.6 2.9 1.7 1.0 2.8 7.7 -3.2 122 2.0 3.08 2.92 5.51 1.25 1.25 -2.3 -39.8 11.0 406 395 5.8 5.7
Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, s.a. qoq var. in %) Unemployment (aop, % of active population) Inflation (HICP, annual average var. in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Benchmark BTP 10-year Yield (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Industrial Production (s.a. mom var. in %) Retail Sales (annual variation in %) Cons. Confidence Index (long-term avg. 113) Business Confidence Index Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop)
Q3 09 -4.7 0.4 7.4 0.1 1.00 0.75 4.10 1.46 Jan-10 -0.5 1.9 -0.9 111.6 93.2 0.1 1.3 1.39
Q4 09 -2.8 -0.1 7.8 0.7 1.00 0.70 4.12 1.43 Feb-10 3.3 0.3 -0.3 107.6 94.7 0.1 1.2 1.36
Q1 10 0.5 0.4 8.1 1.3 1.00 0.63 3.98 1.35 Mar-10 7.3 0.2 0.2 106.3 95.3 0.3 1.4 1.35
Q2 10 1.3 0.5 8.3 1.6 1.00 0.77 4.10 1.22 Apr-10 7.9 1.0 -0.2 107.8 95.9 0.4 1.5 1.32
Q3 10 1.1 0.3 8.3 1.7 1.00 0.89 3.88 1.37 May-10 7.6 1.0 -0.8 105.4 96.2 0.1 1.4 1.23
Q4 10 1.2 0.3 8.4 1.7 1.00 0.97 3.75 1.33 Jun-10 8.3 0.6 0.5 104.5 96.3 0.0 1.3 1.22
Q1 11 1.2 0.3 8.4 1.6 1.00 1.10 3.81 1.35 Jul-10 5.6 0.3 0.7 105.6 98.1 0.4 1.7 1.30
Q2 11 1.1 0.3 8.3 1.5 1.03 1.25 3.90 1.35 Aug-10 9.5 1.6 0.6 104.1 99.4 0.2 1.6 1.28
Q3 11 1.1 0.4 8.2 1.6 1.07 1.39 3.98 1.34 Sep-10 107.2 98.6 -0.2 1.6 1.37
Q4 11 1.3 0.5 8.1 1.7 1.17 1.37 3.99 1.30 Oct-10 107.7 99.8 0.2 1.7 1.39
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1990 - 2014 | % variation
6
Italy
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
1
Real GDP growth in %
3
0
0
-1
-3 Italy -6 1990 1995 2000 2005 2010 G7 World
-2 Italy G7 -3 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
3 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
3
2
2
1
1
0
0
Maximum Consensus Minimum Jul Oct Jan Apr Jul Oct
-1 Jun Sep Dec Mar Jun Sep
-1
5 | Consumption | % variation
4
6 | Investment | % variation
10
2 0 0 -10 -2 Italy G7 -4 1990 1995 2000 2005 2010 -20 1990 1995 2000 2005 2010 Italy G7
Individual Forecasts BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Confindustria Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs Gruppo MPS ING Intesa Sanpaolo ISAE JPMorgan Lloyds TSB Nomura Raiffeisen Research ref. UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts European Commission (Sep. 2010) IMF (Oct. 2010) Central Bank (July 2010)
Notes and sources
2010 1.1 1.1 1.1 1.1 1.1 1.2 1.0 1.2 1.2 1.1 1.0 1.0 1.2 0.9 1.0 1.0 1.0 1.2 0.8 1.1 1.0 1.1 1.1 1.0 0.8 1.2 1.1 1.1 1.0 0.9 0.9 1.1 1.0 1.0
2011 0.8 1.6 0.5 1.0 1.3 1.3 0.9 2.0 1.3 0.9 0.8 1.0 1.5 1.0 0.8 1.2 1.4 1.3 0.9 1.0 0.9 0.7 1.6 1.1 0.5 2.0 1.0 1.1 1.1 1.1 1.1 1.0 1.0
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All real sector data are from the National Statistical Institute (ISTAT, Istituto Nazionale di Statistica) and the Bank of Italy (BdI, Banca d’Italia). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: ISTAT. 2 Quarterly GDP (seasonally adjusted), quarter-on-quarter variation in %. Source: ISTAT. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts since July 2009. 5 Private consumption, annual variation in %. Source: ISTAT. 6 Gross fixed investment, annual variation in %. Source: ISTAT. 7 Private consumption, change in 2010 and 2011 forecasts since July 2009. 8 Gross fixed investment, change in 2010 and 2011 forecasts since July 2009. 9 Industrial production, annual variation in %. Source: ISTAT. 10 Unemployment, % of active population. Source: ISTAT. 11 Balance of non-financial public sector, % of GDP. Source: BdI. 12 Industrial production, evolution of 2010 and 2011 forecasts since July 2009. 13 Unemployment, evolution of 2010 and 2011 forecasts since July 2009 14 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since July 2009.
7 | Consumption | evolution of fcst
2
8 | Investment | evolution of forecasts
4 2010 2011
1
2
0 2010 2011 -1 Jul Oct Jan Apr Jul Oct
0
-2 Jul Oct Jan Apr Jul Oct
FocusEconomics Consensus Forecast
| 41
FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.6 0.7 0.4 0.2 0.4 0.5 0.4 0.7 0.5 1.0 0.5 0.7 0.5 0.6 0.4 0.5 0.4 1.1 0.8 1.1 0.3 0.6 0.5 0.7 0.1 0.3 0.8 1.1 0.4 0.7 0.1 0.8 0.4 0.5 0.5 0.5 0.4 0.2 1.1 0.7 0.7 0.8 0.9 0.9 Investment % variation 2010 2011 1.4 1.6 2.3 -1.0 1.0 0.7 2.7 3.4 1.4 1.1 0.3 1.4 1.4 -0.4 2.1 1.1 1.8 1.0 0.9 2.8 0.3 0.3 2.4 2.0 1.5 1.3 1.4 4.0 1.1 0.8 0.3 2.7 1.4 1.5 1.1 0.5 0.5 -1.0 4.0 1.1 1.3 1.7 1.6 1.5
Italy
November 2010
Individual Forecasts BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Confindustria Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs Gruppo MPS ING Intesa Sanpaolo ISAE JPMorgan Lloyds TSB Nomura Raiffeisen Research ref. UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
9 | Industry | % variation
10
Industry % variation 2010 2011 5.4 1.3 6.7 3.1 5.5 3.2 5.2 1.9 5.2 6.7 5.5 5.7 5.0 3.7 3.7 1.3 3.2 2.5 2.4 1.8 1.8 1.8
Unemployment % of active pop. 2010 2011 8.3 8.0 8.7 9.5 8.7 8.9 8.6 9.1 8.5 8.5 8.6 8.7 8.5 8.3 8.5 8.7 8.2 8.0 8.5 8.4 8.5 8.4 8.8 8.8 8.6 8.5 8.4 8.3 8.5 8.5 8.4 8.5 8.2 8.8 8.5 8.5 8.6 8.7 8.7 8.0 9.5 8.5 8.6 8.7 8.8 8.8
Fiscal Balance % of GDP 2010 2011 -5.0 -4.3 -4.8 -4.8 -5.1 -4.1 -4.6 -3.9 -4.6 -3.6 -5.1 -4.0 -4.9 -3.3 -5.0 -4.7 -5.2 -4.5 -4.9 -3.8 -5.4 -5.1 -5.1 -4.5 -5.0 -4.2 -5.2 -5.3 -5.3 -4.7 -5.1 -3.9 -5.3 -4.8 -4.7 -3.2 -5.0 -4.3 -5.4 -4.6 -5.0 -5.0 -5.0 -5.1 -5.1 -5.3 -3.2 -4.3 -4.3 -4.2 -4.3 -4.3
Public Debt % of GDP 2010 2011 118 120 119 119 119 121 119 119 118 119 118 119 119 121 118 120 119 119 118 119 119 119 119 119 119 121 119 120 120 120 -
10 | Unemployment | % of active pop.
12
11 | Fiscal Balance | % of GDP
0
10 0 8 -10 Italy G7 -20 1990 1995 2000 2005 2010 4 1990 1995 2000 2005 2010 6 Italy G7
-3
-6
-9 Italy G7 -12 1990 1995 2000 2005 2010
12 | Industry | evolution of forecasts
6
13 | Unemployment | evolution of fcst
10.0 2010 2011 9.5
14 | Fiscal Balance | evolution of fcst
-4.0 2010 2011 -4.5
4 9.0 2 8.5 2010 2011 0 Jul Oct Jan Apr Jul Oct 8.0 Jul Oct Jan Apr Jul Oct -6.0 Jul Oct Jan Apr Jul Oct -5.5 -5.0
FocusEconomics Consensus Forecast
| 42
FOCUSECONOMICS
Monetary Sector | Inflation and Interest Rate
15 | Inflation | 1990 - 2014 | in %
8 Italy G7 6
Italy
November 2010
16 | Inflation | Q1 07-Q4 11 | in %
6 Italy G7 4
Inflation and Interest Rate
Consumer Prices % var. 2010 2011 1.6 1.8 1.5 1.7 1.6 1.8 1.7 1.6 1.4 1.5 1.5 1.9 1.6 1.4 1.9 1.9 1.5 1.4 1.6 1.9 1.5 1.2 1.5 1.7 1.6 1.8 1.6 1.9 1.6 1.9 1.5 1.6 1.6 2.0 1.7 1.5 1.6 1.8 1.6 2.1 1.5 1.7 1.5 1.6 1.5 1.9 1.5 1.9 1.4 1.9 1.6 1.6 1.6 1.6 1.5 1.6 1.6 1.5 1.2 2.1 1.8 1.7 1.7 1.7 1.7 1.7 1.9 10-year Bond Rate in % 2010 2011 3.85 4.10 4.10 4.10 4.25 4.65 3.47 3.47 3.00 3.84 3.80 3.80 3.00 4.25 3.83 3.75 3.88 4.12 4.19 3.47 4.65 3.97 3.99 4.09 4.43 4.49 -
4
2
2
0
0
-2 1990 1995 2000 2005 2010
-2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3
18 | Inflation 2011 | evolution of fcst
4
3
2
2
1 Maximum Consensus Minimum 0 Jun Sep Dec Mar Jun Sep
1 Maximum Consensus Minimum 0 Jul Oct Jan Apr Jul Oct
19 | 10-year Bond Yield | 1990-2014
15 Italy 12 Germany
20 | 10-year Bond Yield | Q1 07-Q4 11
6
5
9 4 6 3 Italy Germany 0 1990 1995 2000 2005 2010 2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
Individual Forecasts BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Confindustria Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs Gruppo MPS ING Intesa Sanpaolo ISAE JPMorgan Lloyds TSB Nomura Raiffeisen Research ref. UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Eur. Comm. (Sep. 2010) IMF (Oct. 2010) Central Bank (July 2010)
3
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All monetary sector data are from the National Statistical Institute (ISTAT, Istituto Nazionale di Statistica), Bank of Italy (BdI, Banca d’Italia), Federal Reserve Board (Fed), Bank of Japan (BoJ) and the European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonized index of consumer prices (HICP) in % (aop). Source: ISTAT. 16 Quarterly inflation, year-on-year variation in harmonized index of consumer prices (HICP) in % (aop). Source: ISTAT. 17 Inflation, evolution of 2010 forecasts during the last 18 months. 18 Inflation, evolution of 2011 forecasts since July 2009. 19 10-year benchmark bond yield (eop). Source: ECB, BdI. 20 Quarterly 10-year benchmark bond yield (eop). Source: ECB, BdI. 21 Quarterly policy rate in % (eop). Source: ECB, Fed, BoJ. 22 Quarterly 3-month benchmark rate in % (eop). Source: ECB, Fed, BoJ.
21 | Policy Rate | Q1 07-Q4 11 | in %
6 Euro area United States Japan 4
22 | Benchmark Rate | Q1 07-Q4 11
6 Euro area United States Japan 4
2
2
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
FocusEconomics Consensus Forecast
| 43
FOCUSECONOMICS
External Sector | Current Account and Trade Balance
23 | Current Account | % of GDP
6 Italy G7 3 20
Italy
November 2010
24 | Current Account | EUR bn
40
Current Account Balance | EUR bn
0 0 -20 -3
-40
-6 1990 1995 2000 2005 2010
-60 1990 1995 2000 2005 2010
25 | Current Account 2010 | evol. of fcst
-15 Maximum Consensus Minimum
26 | Current Account 2011 | evol. of fcst
0 Maximum Consensus Minimum -25
-30
-45
-50
-60
-75 Jun Sep Dec Mar Jun Sep
-75 Jul Oct Jan Apr Jul Oct
27 | Current Account | EUR bn
0
28 | Trade Balance | EUR bn
600 Trade Balance Exports Imports
Individual Forecasts BBVA BMO Capital Markets BNP Paribas Citigroup Commerzbank Confindustria Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs Gruppo MPS ING Intesa Sanpaolo ISAE JPMorgan Lloyds TSB Nomura Raiffeisen Research ref. UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
2010 -45.6 -45.5 -56.0 -49.9 -50.2 -50.0 -56.2 -43.7 -43.8 -49.1 -51.4 -48.3 -53.0 -53.1 -48.3 -56.2 -43.7 -49.9 -49.6 -47.3 -44.7 -43.9
2011 -38.4 -32.8 -55.5 -44.7 -47.2 -46.5 -51.4 -38.5 -29.1 -47.6 -31.9 -46.4 -48.0 -46.3 -48.2 -55.5 -29.1 -46.4 -43.5 -42.1 -39.0 -38.8
-5
400
-10
200
-15
0
-20 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
-200 1990 1995 2000 2005 2010
29 | Exports | variation in %
30
30 | Imports | variation in %
60 Italy G7
Notes and sources
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All external sector data are from the Bank of Italy (BdI, Banca d’Italia). Forecasts based on FocusEconomics Consensus Forecast. 23 Current account balance as % of GDP. 24 Current account balance in EUR bn. 25 Current account in EUR bn, evolution of 2010 forecast during the last 18 months. 26 Current account in EUR bn, evolution of 2011 forecast since July 2009. 27 Quarterly current account balance, in EUR bn. 28 Trade balance, imports and exports, in EUR bn. 29 Exports, annual variation in %. 30 Imports, annual variation in %.
15 30
0 0 -15 Italy -30 1990 1995 2000 2005 2010 G7 -30 1990 1995 2000 2005 2010
FocusEconomics Consensus Forecast
| 44
FOCUSECONOMICS
Spain
November 2010
Spain
Spain
Outlook stable
• The economic recovery remains fragile, even though the government’s commitment to cut the fiscal deficit to 6.0% of GDP in 2011 should restore some confidence in the country’s public finances. Meanwhile, labour market figures improved for the first time since the third quarter of 2007, as the unemployment rate fell from 20.1% in the second quarter to 19.8% in the third. Consensus Forecast panellists expect GDP to contract 0.4% this year, which is unchanged from last month’s forecast. For 2011, the panel expects the economy to grow 0.4%. Preliminary figures show that inflation rose from 2.0% in September to 2.2% in October. Panellists expect inflation to average 1.6% this year, which is unchanged from last month’s forecast. In 2011, the panel sees inflation inching down to 1.4%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 41.9 733 17,469 3.6 -0.5 52.4 3.2 -4.0 2005-09 45.4 1,017 22,396 1.7 -2.1 42.3 2.7 -8.3 2010-14 47.9 1,120 23,349 1.0 -6.0 74.5 1.5 -3.8
•
•
Joan Enric Domene
Economist
REAL SECTOR | Industrial production rebounds in August In August, industrial production expanded 3.2% over the same month last year, which contrasted the 1.6% drop registered in July. On a working-day adjusted basis, industrial output expanded 1.4% year-on-year, bouncing back from the 0.1% fall recorded in July (previously reported: +0.5% year-on-year) and beating market expectations, which had anticipated industrial output adding 0.2%.
5.1 3.0 3.2 3.2
Industrial Production | variation in %
10.0 6.8 Year-on-year Annual average
0.0 -1.5 % -4.0 -5.0 -1.9 -1.6
The August expansion was driven by a rebound in the manufacturing sector, which expanded 3.4% in annual terms (July: -2.7% yoy). Mining expanded a strong 14.1% (July: +3.0% yoy) and, finally, production of electricity, gas, steam and air conditioning increased 1.0% (July: +2.1% yoy). On a use-based classification, intermediate and none-durable consumer goods were the main drivers behind the August expansion. Capital goods production, in contrast, contracted over the same month last year. Due to the robust monthly reading, the trend continues to improve, with the annual average variation in industrial production stepping up from minus 2.9% in July to minus 2.0% in August. Consensus Forecast participants expect industrial output to expand 0.5% this year. For 2011, the panel sees industrial production expanding 0.9%. The Spanish Central Bank anticipates that the economy will contract 0.4% this year and will return to growth in 2011 with a 0.8% expansion. Consensus Forecast panellists share this assessment and anticipate GDP contracting 0.4% this year, which is unchanged from last month’s forecast. In 2011, the panel expects the economy to grow 0.4%.
-10.0 -10.6 -12.7 -12.8
-20.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Note: Year-on-year and annual average variation of industrial production index. Source: National Statistical Institute (INE) and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 45
FOCUSECONOMICS
Business Confidence
20
Spain
November 2010
OUTLOOK | Business confidence drops in the third quarter In October, the quarterly business confidence index (ICE, Indicador de Confianza Empresarial) published by the Association of Chambers of Commerce (Consejo Superior de Cámaras de Comercio) reached minus 17.3 points, which was down from the minus 14.8 points recorded in July. At the current level, the index remains well below the 0-point threshold that separates optimistic from pessimistic territory. Nonetheless, business sentiment is still higher than the trough reached in April 2009, when the index fell to minus 27.6 points.
10
0 Points
-10
-20
-30 Jan06 Jul06 Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10
Note: Quarterly business confidence index. Values above 0 indicate a positive assesment regarding economic activity while values below 0 indicate a negative assesment. Source: Association of Chambers of Commerce.
The deterioration in business confidence was the result of a decline in the current situation sub-index, which dropped from minus 17.1 points in July to minus 21.5 points in October, amid worse perceptions regarding investment and unemployment. In addition, the expectations sub-index for the next three months also fell, from minus 11.8 points in July to minus 12.6 points in October, amid deteriorating perceptions regarding the future price levels. MONETARY SECTOR | Inflation accelerates in September In September, consumer prices increased 0.1% over the previous month, which came in below the 0.3% price rise recorded in August. In spite of the small price increase, annual inflation rose from 1.8% in August to 2.1%, which was a notch above the 2.0% preliminary estimate released by the Statistical Institute on 29 September.
Inflation | Consumer Price Index
1.5 1.1 1.0 0.7 0.5 0.5 % 0.0 -0.2 -0.5 0.0 -0.2 -0.4 0.0 0.2 0.2 0.3 0.1 % 2.0 0.7 4.0
The monthly price rise was mainly driven by higher prices for clothing and footwear (+3.7% month-on-month). However, the rise was partially offset by a decline of prices for leisure and recreation (-2.8% mom) as well as a drop in prices in hotels and restaurants (-1.0% mom). Meanwhile, the core inflation index, which does not include prices for unprocessed food and energy, remained flat over the previous month, lifting annual core inflation from 1.0% in August to 1.1% in September. More recent data point to a rise in inflationary pressures. According to a preliminary estimate released by INE on 29 October, annual inflation increased to 2.2% in October, which is the highest level in nearly two years. Consensus Forecast panellists expect harmonised inflation to average 1.6% this year, which is unchanged from last month’s forecast. For 2011, panellists expect inflation to average 1.4%.
-1.0
monthly (left scale)
-1.0
annual (right scale)
-2.0 Feb Mar Apr May Jun Jul Aug Sep
-1.5 Sep Oct Nov Dec Jan
Note: Year-on-year and month-on-month var. of consumer price index in %. Source: National Statistical Institute (INE).
FocusEconomics Consensus Forecast
| 46
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Car Sales (mn) Housing Starts (mn) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (Core, annual variation in %) Inflation (HICP, annual variation in %) Inflation (HICP, annual avg. variation in %) Inflation (IPRI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor Rate (%, eop) 10-year Bond Yield (%, eop) Stock Market (variation of IBEX 35 in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) Unemployment (aop, % of active population) Inflation (HICP, annual avg. variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor Rate (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Cons. Confid. Index (100-point threshold) Inflation (CPI, mom variation in %) Inflation (CPI, annual eop variation in %) Exchange Rate (USD per EUR, eop) 2005 44.1 20,604 909 3.6 4.2 5.5 7.0 0.2 1.5 0.72 9.2 1.0 43.0 2.9 3.7 3.4 5.2 2.25 2.49 3.37 18.2 1.18 1.24 -7.4 -66.9 -77.8 154 231 4.8 11.7 Q3 09 -3.9 -0.3 17.9 -1.0 1.00 0.75 3.80 1.46 Jan-10 -5.0 78.7 -1.0 1.0 1.39 2006 44.7 22,015 984 4.0 3.8 4.6 7.2 3.7 1.6 0.76 8.5 2.0 39.6 2.5 2.7 3.6 3.8 3.50 3.73 3.82 31.8 1.32 1.26 -9.0 -88.3 -89.7 170 260 10.6 12.2 Q4 09 -3.0 -0.2 18.8 0.2 1.00 0.70 3.80 1.43 Feb-10 -1.9 71.1 -0.2 0.8 1.36
Spain
November 2010
2007 45.2 23,290 1,053 3.6 3.6 5.5 4.5 2.4 1.6 0.62 8.3 1.9 36.1 3.3 4.3 2.8 5.7 4.00 4.68 4.35 7.3 1.46 1.37 -10.0 -105 -99.0 181 280 6.8 8.0 Q1 10 -1.3 0.1 20.1 1.2 1.00 0.63 3.83 1.35 Mar-10 6.8 72.7 0.7 1.4 1.35
2008 46.2 23,582 1,089 0.9 -0.6 5.8 -4.8 -7.1 1.2 0.35 11.3 -4.1 39.7 2.4 1.5 4.1 0.4 2.50 2.89 3.86 -39.4 1.39 1.47 -9.7 -106 -94.1 188 282 3.7 0.6 Q2 10 -0.1 0.2 20.1 1.6 1.00 0.77 4.56 1.22 Apr-10 3.0 78.2 1.1 1.5 1.32
2009 46.7 22,487 1,051 -3.7 -4.3 3.2 -16.0 -16.2 1.0 0.16 18.0 -11.2 53.2 0.3 0.9 -0.2 0.4 1.00 0.70 3.80 29.8 1.43 1.39 -5.5 -58.3 -50.2 158 208 -15.9 -26.2 Q3 10 -0.1 -0.3 19.8 1.9 1.00 0.89 3.64 1.37 May-10 5.1 65.1 0.2 1.8 1.23
2010 47.1 22,576 1,064 -0.4 0.8 -7.2 0.5 20.1 -9.4 64.9 1.6 1.00 0.97 4.15 1.33 1.38 -4.5 -47.5 -48.5 176 225 11.0 8.2 Q4 10 0.1 0.0 20.3 2.0 1.00 0.97 4.15 1.33 Jun-10 3.2 65.9 0.2 1.5 1.22
2011 47.5 22,799 1,084 0.4 0.1 -1.5 0.9 20.3 -7.0 72.0 1.4 1.17 1.37 4.46 1.30 1.31 -3.5 -37.9 -42.2 188 231 6.4 3.0 Q1 11 0.1 0.1 20.8 1.9 1.00 1.10 3.97 1.35 Jul-10 -1.6 73.6 -0.4 1.9 1.30
2012 47.9 23,206 1,113 1.3 1.1 2.0 2.7 18.9 -5.7 76.4 1.3 2.10 2.18 4.73 1.26 1.28 -3.7 -41.6 -42.8 204 247 8.6 6.6 Q2 11 0.1 0.2 20.5 1.6 1.03 1.25 4.09 1.35 Aug-10 3.2 74.9 0.3 1.8 1.28
2013 48.3 23,761 1,149 1.7 1.4 2.8 2.6 17.8 -4.6 79.1 1.5 2.80 2.90 4.89 1.26 1.26 -3.6 -41.9 -36.8 222 260 8.8 5.3 Q3 11 0.6 0.2 20.1 1.2 1.07 1.39 4.24 1.34 Sep-10 72.8 0.1 2.1 1.37
2014 48.8 24,406 1,190 1.9 1.7 3.1 2.8 16.8 -3.6 80.3 1.7 3.08 2.92 4.87 1.25 1.25 -3.6 -43.2 -36.7 238 276 7.5 6.3 Q4 11 1.0 0.4 20.0 1.3 1.17 1.37 4.46 1.30 Oct-10 1.39
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1995 - 2014 | % variation
10 Spain Euro area World 5 0 0 -3
Spain
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
6 Spain Euro area World
Real GDP growth in %
3
-5 1995 2000 2005 2010
-6 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
0.5 Maximum Consensus Minimum 0.0
4 | GDP 2011 | evolution of forecasts
2
1
0
-0.5
-1
Maximum Consensus Minimum
-1.0 Jan Mar May Jul Sep Nov
-2 Jan Mar May Jul Sep Nov
5 | Consumption | variation in %
10
6 | Investment | variation in %
20 Spain Euro area
Individual Forecasts Banesto BBVA BNP Paribas Caja Madrid CEPREDE Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian FUNCAS Goldman Sachs ING Instituto Flores de Lemus La Caixa Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) European Commission (Sep. 2010) OECD (May 2010)
2010 -0.5 -0.6 -0.3 -0.4 -0.6 -0.3 -0.5 -0.3 -0.5 -0.5 -0.5 -0.5 -0.4 -0.4 -0.2 -0.3 -0.3 -0.3 -0.5 0.1 -0.3 -0.6 0.1 -0.4 -0.4 -0.4 -0.4 -0.4 -0.3 -0.3 -0.2
2011 0.5 0.7 -0.3 0.4 0.5 -0.1 0.1 1.1 0.1 0.0 0.0 0.7 0.4 1.1 0.7 0.3 0.7 0.2 0.4 1.0 0.4 -0.3 1.1 0.4 0.4 0.4 0.6 0.6 0.7 0.8 0.9
5
10
0
0
Notes and sources
-5 Spain -10 1995 2000 2005 2010 Euro area -20 1995 2000 2005 2010 -10
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the National Statistical Institute (INE, Instituto Nacional de Estadística) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: INE. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: INE. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: INE. 6 Gross fixed investment, annual variation in %. Source: INE. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed investment, change in 2010 and 2011 forecasts since January 2010. 9 Industrial production, annual variation in %. Source: INE. 10 Unemployment, % of active population. Source: INE. 11 Balance of non-financial public sector, % of GDP. Source: Eurostat. 12 Industrial production, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since January 2010.
7 | Consumption | evolution of fcst
1.0
8 | Investment | evolution of forecasts
0
-2
0.5
-4
0.0
-6
2010 2011 -0.5 Jan Mar May Jul Sep Nov
2010 2011 -8 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.4 -0.1 -0.3 0.3 0.8 -1.6 0.7 0.0 0.3 0.3 1.3 -0.7 0.2 -0.2 1.1 0.4 -0.3 0.5 1.2 0.5 1.2 0.5 1.3 0.3 0.4 0.7 1.4 0.3 1.6 0.0 1.3 0.3 -0.3 1.6 1.0 0.8 0.7 0.2 0.1 -1.6 0.7 0.3 0.1 0.4 0.4 0.4 Investment % variation 2010 2011 -6.6 -2.0 -9.5 -3.2 -9.0 -6.5 -7.6 -2.2 -7.5 -1.1 -7.8 -2.3 -7.4 -1.6 -6.1 0.9 -6.7 0.9 -7.3 -3.1 -6.4 1.0 -7.1 -3.2 -6.6 -0.7 -6.4 -0.3 -6.0 0.9 -6.8 -2.0 -9.5 -6.0 -6.9 -7.2 -7.2 -7.0 -6.9 -6.5 1.0 -1.8 -1.5 -1.7 -1.2 -1.2
Spain
November 2010
Individual Forecasts Banesto BBVA BNP Paribas Caja Madrid CEPREDE Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian FUNCAS Goldman Sachs ING Instituto Flores de Lemus La Caixa Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Industry % variation 2010 2011 2.0 2.5 -0.2 -3.3 1.2 1.7 -0.9 2.0 -0.5 1.4 0.7 0.9 0.7 0.1 0.5 1.6 1.0 1.3 -0.9 2.0 0.7 0.5 0.5 0.6 0.6 -3.3 2.5 1.4 0.9 0.9 1.2 1.2
Unemployment % of active pop. 2010 2011 20.4 20.9 19.4 19.2 20.2 22.0 20.2 20.5 19.9 20.1 20.4 20.8 20.5 21.3 20.0 19.9 20.5 19.1 20.0 20.3 20.2 20.3 19.9 20.4 19.8 20.0 19.9 20.1 20.0 19.9 20.0 19.0 20.1 20.5 19.4 20.5 20.0 20.1 20.0 20.0 20.0 19.0 22.0 20.3 20.3 20.2 20.2 20.1
Fiscal Balance % of GDP 2010 2011 -9.3 -6.0 -9.6 -6.6 -9.6 -7.8 -9.9 -6.9 -10.6 -8.9 -9.3 -7.2 -9.3 -6.2 -9.3 -6.8 -9.1 -6.4 -9.0 -7.1 -9.2 -7.5 -9.3 -7.4 -9.7 -6.8 -9.6 -7.3 -9.7 -7.0 -9.5 -6.4 -9.3 -8.0 -8.5 -6.0 -8.0 -6.0 -9.3 -7.3 -10.6 -8.0 -9.3 -9.4 -9.4 -9.5 -9.5 -8.9 -6.0 -7.0 -7.0 -7.0 -7.1 -7.1
Public Debt % of GDP 2010 2011 65.9 71.9 63.7 69.8 66.2 73.1 65.8 73.4 64.7 72.4 65.2 72.3 64.9 72.5 66.0 71.0 65.0 73.6 65.2 72.1 64.3 71.5 63.6 69.9 64.7 71.9 63.5 73.0 63.5 66.2 65.0 64.9 65.2 65.8 65.7 69.8 73.6 72.2 72.0 72.5 72.9 73.1
9 | Industry | variation in %
10
10 | Unemployment | % of active pop.
25 Spain 20 Euro area
11 | Fiscal Balance | % of GDP
5
0
0 15 -10 10 Spain -20 1995 2000 2005 2010 Euro area 5 1995 2000 2005 2010 -15 1995 2000 2005 2010 -10 Spain Euro area World -5
12 | Industry | evolution of forecasts
2.0 2010 2011 1.5
13 | Unemployment | evolution of fcst
21 2010 2011 20
14 | Fiscal Balance | evolution of fcst
-6 2010 2011
-8
1.0 19 0.5 -10
0.0 Jan Mar May Jul Sep Nov
18 Jan Mar May Jul Sep Nov
-12 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Monetary Sector | Inflation, Interest Rate and Stock Market
15 | Inflation | 1995 - 2014 | in %
6 Spain 4 Euro area
4
Spain
November 2010
16 | Inflation | Q1 07-Q4 11 | in %
6
Inflation | annual average variation in %
2
2
0
0 Spain Euro area
-2 1995 2000 2005 2010
-2
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
2.0 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
3
2
1.5
1
1.0
0 Maximum Consensus Minimum
0.5 Jan Mar May Jul Sep Nov
-1 Jan Mar May Jul Sep Nov
19 | 10-year Bond Yield | 1995-2014
12 Spain Germany 10
20 | Stock Market | IBEX 35
14,000
12,000
Individual Forecasts Banesto BBVA BNP Paribas Caja Madrid CEPREDE Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian FUNCAS Goldman Sachs ING Instituto Flores de Lemus La Caixa Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) European Commission (Sep. 2010) OECD (May 2010)
2010 1.5 1.6 1.7 1.7 1.7 1.6 1.7 1.6 1.6 1.6 1.5 1.7 1.6 1.6 1.7 1.7 1.7 1.6 1.5 1.8 1.5 1.8 1.6 1.6 1.6 1.6 1.5 1.5 1.6 1.4
2011 0.9 1.4 1.2 1.4 1.1 1.7 1.5 1.3 1.4 1.1 1.3 1.5 1.1 1.3 1.3 1.4 2.0 1.5 1.6 2.2 0.9 2.2 1.4 1.4 1.4 1.4 1.4 1.1 1.6 0.6
8
10,000
6
8,000
4
2 1995 2000 2005 2010
6,000 Jan Jul Jan Jul Jan Jul
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary sector data are from the National Statistical Institute (INE, Instituto Nacional de Estadística), Bank of Spain (BdE, Banco de España), Federal Reserve Board (Fed), Bank of Japan (BoJ), German Central Bank (BBK, Deutsche Bundesbank) and the European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). Source: INE. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer prices (HICP) in % (aop). Source: INE. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: BdE, BBK. 20 Monthly index levels, IBEX 35. Jan. 2008 until end of previous month. Source: Bolsa de Madrid. 21 Quarterly policy rate in % (eop). Source: ECB, Fed, BoJ. 22 Quarterly 3-month benchmark rate in % (eop). Source: ECB, Fed, BoJ.
21 | Policy Rate | Q1 07-Q4 11 | in %
5 United States Euro area Japan
22 | 3-Month Rate | Q1 07-Q4 11 | in %
8 United States Euro area Japan
4
6
3
4
2
2
1
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
FocusEconomics Consensus Forecast
| 50
FOCUSECONOMICS
External Sector | Current Account and Trade Balance
23 | Current Account | % of GDP
3
Spain
November 2010
24 | Current Account | EUR bn
50
Current Account Balance | EUR bn
0
0
-3
-50
-6
-9 Spain -12 1995 2000 2005 2010 Euro area
-100
-150 1990 1995 2000 2005 2010
25 | Current Account 2010 | evol. of fcst
0 Maximum Consensus Minimum -25
26 | Current Account 2011 | evol. of fcst
0
-25
-50
-50
-75 Jan Mar May Jul Sep Nov
-75 Jan
Maximum Consensus Minimum Mar May Jul Sep Nov
27 | Current Account | EUR bn
0
28 | Trade Balance | EUR bn
600 Trade Balance Exports Imports
Individual Forecasts Banesto BBVA BNP Paribas Caja Madrid CEPREDE Citigroup Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian FUNCAS Goldman Sachs ING Instituto Flores de Lemus La Caixa Nomura Raiffeisen Research UBS Unicredit Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
2010 -48.0 -31.9 -50.6 -41.9 -61.6 -47.7 -50.0 -49.0 -49.0 -53.2 -40.4 -52.8 -38.3 -43.1 -53.3 -47.9 -46.1 -51.1 -61.6 -31.9 -48.5 -47.5 -47.1 -46.3 -46.6
2011 -43.0 -11.9 -28.1 -16.2 -55.1 -36.3 -47.7 -48.8 -48.8 -48.8 -36.0 -44.6 -21.7 -39.2 -45.5 -38.0 -30.7 -41.2 -55.1 -11.9 -40.2 -37.9 -37.4 -34.7 -34.9
-10
400
-20
200
-30
0
-40 Q1 07 Q1 08 Q1 09 Q1 10
-200 1990 1995 2000 2005 2010
29 | Exports | variation in %
60
30 | Imports | variation in %
40
Notes and sources
40 20
General: Long-term chart period from 1990 to 2014 unless otherwise stated. All external sector data are from the Bank of Spain (BdE, Banco de España). Forecasts based on FocusEconomics Consensus Forecast. 23 Current account balance as % of GDP. 1995-2014. 24 Current account balance in EUR bn. 25 Current account in EUR bn, evolution of 2010 forecast since January 2010. 26 Current account in EUR bn, evolution of 2011 forecast since January 2010. 27 Quarterly current account balance, in EUR bn. Q1 07-Q2 10. 28 Trade balance, imports and exports, in EUR bn. 29 Exports, annual variation in %. 30 Imports, annual variation in %.
20
0
0
-20
-20 1990 1995 2000 2005 2010
-40 1990 1995 2000 2005 2010
FocusEconomics Consensus Forecast
| 51
FOCUSECONOMICS
Austria
November 2010
Austria
Austria
Outlook improves
• Industrial production rebounded in August, expanding 8.2% over the same month last year. Additional economic indicators point to a resilient recovery, suggesting that the economy is back on track, favoured by a strong external sector, which benefits from healthy growth in the country’s main trade partner, Germany. Consensus Forecast panellists expect the economy to expand 1.7% this year, which is up 0.2 percentage points from last month’s projection. For 2011, the panel sees the economy expanding 1.7% as well. Inflation rose from 1.7% in August to 1.9% in September. Panellists expect inflation to average 1.5% this year, which is unchanged from last month’s projection. Next year, the panel sees inflation averaging 1.6%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 8.1 219 27,081 1.8 -1.6 66.1 1.8 1.0 2005-09 8.3 266 32,044 1.6 -1.5 62.9 1.9 2.8 2010-14 8.5 304 35,861 1.9 -3.2 73.8 1.7 2.6
•
•
Ricardo Aceves
Economist
REAL SECTOR | Industrial production expands at resilient pace in August In August, industrial production expanded a working day adjusted 8.2% over the same month last year, which came in above the revised 5.9% increase registered in the previous month (previously reported: 6.8% year-on-year). The monthly improvement marked the fastest growth in industrial output since March 2007. The main drivers behind the August acceleration were a sharp rebound in mining and quarrying output, which increased 4.0% in annual terms, contrasting the 7.3% contraction observed in July. In addition, the manufacturing sector accelerated to 12.3%, up from the previous 9.3% increase tallied in July. Finally, water supply grew 11.4% (July: +7.5% yoy). A month-on-month analysis confirms the acceleration suggested by annual figures, as industrial output rose 1.3% in August in seasonally adjusted terms (July: +0.3% month-on-month). As a result of the robust August reading, the trend continues to show a strong recovery, with annual average growth in industrial production turning from minus 1.3% in July to plus 0.3% in August, which constituted the first positive reading since January 2009. Consensus Forecast panellists anticipate industrial production to rise 4.8% this year and 3.8% in 2011. In its bi-annual economic outlook report, the Central Bank expects economic activity to rise 1.6% this year. For 2011, monetary authorities see the economy expanding 1.8%. Consensus Forecast panellists expect GDP to grow 1.7% this year, which is up 0.2 percentage points from last month’s forecast. For 2011, the panel expects the economy expanding 1.7% as well.
Industrial Production | variation in %
10.0 Year-on-year (left scale) Annual average (right scale) 1.1 0.0 % -5.0 -6.5 -10.0 -11.6 -15.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug -10.0 -9.8 -2.7 -3.5 -2.8 0.0 7.9 6.4 4.4 0.0 5.9 8.2 5.0
5.0
% -5.0
Note: Year-on-year variation and annual average variation of industrial production index in %. Source: Statistics Austria and FocusEconomics calculations.
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Austria MONETARY SECTOR | Inflation rises in September
November 2010
Inflation | Consumer Price Index
1.5 Monthly (left scale) Annual (right scale) 1.0 1.1
2.0
In September, consumer prices rose 0.4% over the previous month, which doubled the 0.2% increase recorded in August. The monthly price rise was mainly the result of higher prices for clothing and footwear (August: +4.3% month-on-month; September: +11.3% mom), owing to the seasonal change in clothing stocks for autumn and winter. On an annual basis, inflation rose from 1.7% in August to 1.9% in September, which reflected increasing prices for mineral oil products (August: +10.0% yearon-year; September: +12.7% yoy). Furthermore, annual harmonised inflation (HICP) rose from 1.6% in August to 1.8% in September. In its biannual economic outlook report, the Central Bank raised its inflation forecasts and now expects harmonised inflation to average to 1.7% for both this year and next, up from its previous forecast of 1.5% for this year and 1.6% for 2011. Consensus Forecast panellists see harmonised inflation rising from 0.3% in 2009 to 1.5 % in 2010, which is unchanged from the previous month’s forecast. For 2011, the panel expects inflation to reach 1.6%.
1.5
0.5 % 0.0 0.2 0.1 0.0 0.2 0.2 0.3 0.1 0.0 0.2
0.4
1.0 % 0.5
-0.3 -0.5 Sep Oct Nov Dec Jan Feb Mar Apr May Jun
-0.4 Jul Aug Sep
0.0
Note: Monthly and annual consumer price index variation in %. Source: Statistics Austria and FocusEconomics calculations.
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, real ann. var. in %) Total Consumption (annual variation in %) Private Consumption (ann. var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (HICP annual variation in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (variation of ATX in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (USD bn) Trade Balance (USD bn) Exports (USD bn) Imports (USD bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, real ann. var. in %) Economic Growth (GDP, qoq variation in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Monthly Data Industrial Production (annual variation in %) Unemployment (eop, % of active population) Inflation (CPI, mom variation in %) Inflation (CPI, annual eop variation in %) Exchange Rate (USD per EUR, eop) 2005 8.2 29,614 244 2.5 2.0 5.4 1.7 1.2 4.4 5.2 -1.6 63.9 1.6 2.1 2.25 2.49 3.35 50.8 1.18 1.24 2.2 5.3 -1.0 96 97 8.6 9.1 Q3 09 -3.6 0.6 -0.1 1.00 0.75 4.02 Jan-10 -2.8 4.6 -0.3 1.2 1.39 2006 8.3 31,078 257 3.6 2.0 1.8 2.7 2.4 7.2 4.7 -1.6 62.2 1.6 1.7 3.50 3.73 3.81 21.7 1.32 1.26 2.8 7.3 0.3 107 106 10.6 9.1 Q4 09 -0.9 0.4 0.6 1.00 0.70 3.92 Feb-10 1.1 4.5 0.2 1.0 1.36
Austria
November 2010
2007 8.3 32,769 272 3.7 1.0 0.7 1.7 3.8 5.3 4.4 -0.6 59.5 3.5 2.2 4.00 4.68 4.29 1.1 1.46 1.37 3.5 9.6 1.3 119 117 11.5 10.6 Q1 10 0.0 0.0 1.3 1.00 0.63 3.76 Mar-10 0.0 4.5 1.1 2.0 1.35
2008 8.3 33,957 283 2.2 1.4 0.7 3.2 1.0 1.3 3.8 -0.4 62.6 1.5 3.2 2.50 2.89 4.25 -61.2 1.39 1.47 3.3 9.2 -0.6 122 122 2.3 4.0 Q2 10 2.4 1.2 1.8 1.00 0.77 3.54 Apr-10 4.4 4.6 0.3 2.0 1.32
2009 8.4 32,802 274 -3.9 0.6 0.4 1.2 -8.1 -9.3 4.8 -3.4 66.5 1.1 0.4 1.00 0.70 3.92 42.5 1.43 1.39 2.3 6.3 -2.1 97 99 -19.9 -18.5 Q3 10 2.3 0.6 1.7 1.00 0.89 3.30 May-10 7.9 4.6 0.1 1.9 1.23
2010 8.4 33,669 283 1.7 0.9 -1.8 4.8 4.5 -4.5 70.5 1.5 1.00 0.97 3.03 1.33 1.38 2.7 7.7 -1.5 107 108 9.7 8.9 Q4 10 2.3 0.4 1.8 1.00 0.97 3.03 Jun-10 6.4 4.5 0.0 2.0 1.22
2011 8.4 34,639 292 1.7 1.0 1.9 3.8 4.3 -4.0 72.8 1.6 1.17 1.37 3.37 1.30 1.31 3.0 8.9 -0.4 116 116 8.2 7.2 Q1 11 2.6 0.3 1.8 1.00 1.10 3.12 Jul-10 5.9 4.3 -0.4 1.9 1.30
2012 8.5 35,760 303 2.0 1.5 3.2 3.7 4.4 -3.2 74.5 1.7 2.10 2.18 4.28 1.26 1.28 2.4 7.2 1.2 128 126 10.6 9.0 Q2 11 1.7 0.3 1.6 1.03 1.25 3.20 Aug-10 8.2 4.3 0.2 1.7 1.28
2013 8.5 36,983 314 2.0 1.7 3.7 3.4 4.5 -2.3 75.5 1.8 2.80 2.90 4.40 1.26 1.26 2.4 7.6 2.4 139 137 9.0 8.6 Q3 11 1.3 0.3 1.8 1.07 1.39 3.29 Sep-10 4.5 0.4 1.9 1.37
2014 8.5 38,255 327 2.0 1.7 3.5 3.5 4.4 -2.1 75.7 1.8 3.08 2.92 4.35 1.25 1.25 2.2 7.2 4.0 149 146 6.6 6.0 Q4 11 1.3 0.4 1.7 1.17 1.37 3.37 Oct-10 1.39
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1995 - 2014 | % variation
6
Austria
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
6 Austria Euro area World
Real GDP growth in %
3
3
0
0
-3 Austria Euro area World 2000 2005 2010
-3
-6 1995
-6 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
4 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
4 Maximum Consensus Minimum
3
3
2
2
1
1
Individual Forecasts Credit Suisse DekaBank Deutsche Bank DZ Bank Experian IHS Nomura Raiffeisen Research UBS Unicredit WIFO Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (June 2010) IMF (Oct. 2010) European Commission (May 2010)
2010 2.0 1.7 1.6 1.5 1.4 1.8 1.8 1.9 0.6 1.9 2.0 0.6 2.0 1.8 1.7 1.5 1.3 1.3 1.6 1.6 1.3
2011 3.0 1.4 1.3 1.3 1.6 2.0 1.7 1.5 1.1 1.7 1.9 1.1 3.0 1.6 1.7 1.7 1.7 1.7 1.8 1.6 1.6
0 Jan Mar May Jul Sep Nov
0 Jan Mar May Jul Sep Nov
5 | Consumption | % variation
6
6 | Investment | % variation
10
4
5
0 2 -5 0 Austria Euro area -2 1995 2000 2005 2010 -15 1995 2000 2005 2010
-10 Austria Euro area
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Austria (STAT) and the Austrian National Bank (OeNB, Oesterreichische Nationalbank). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: STAT. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. STAT. 6 Gross fixed capital formation, annual variation in %. STAT. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt, % of GDP. Source: OeNB. 10 Unemployment, % of active population. Source: OeNB. 11 General government balance, % of GDP. Source: STAT. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
7 | Consumption | evolution of fcst
1.5
8 | Investment | evolution of forecasts
4 2010 2011
1.0
2
0.5 2010 2011 0.0 Jan Mar May Jul Sep Nov
0
-2 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.9 0.8 0.9 1.0 1.0 1.2 1.0 1.2 0.9 1.0 0.7 1.3 1.0 0.8 1.1 0.8 0.7 1.1 1.0 0.9 0.9 0.9 0.9 0.8 1.3 1.0 1.0 1.0 0.9 1.0
Austria
November 2010
Individual Forecasts Credit Suis s e DekaBank Deuts che Bank DZ Bank Experian IHS Nom ura Raiffeisen Research UBS Unicredit WIFO Summary Minim um Maxim um Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -2.7 1.9 -2.0 2.1 -1.9 1.7 -0.5 0.8 -2.7 2.0 1.0 2.0 -3.2 2.1 -2.5 2.4 -3.2 1.0 -2.3 -1.8 -1.8 -1.7 -1.3 0.8 2.4 2.0 1.9 2.1 2.2 2.1
Unemployment % of active pop. 2010 2011 4.5 3.9 4.4 4.2 4.6 4.5 4.5 4.4 4.4 4.3 4.4 4.6 4.5 4.5 4.5 5.4 5.6 3.9 4.5 4.3 4.3 4.3 5.2 5.3
Fiscal Balance % of GDP 2010 2011 -4.5 -3.5 -4.7 -3.8 -4.4 -3.7 -4.4 -4.0 -4.7 -4.5 -4.3 -3.4 -4.8 -4.3 -3.3 -4.0 -5.5 -5.3 -4.3 -3.8 -4.1 -3.5 -5.5 -3.3 -4.4 -4.5 -4.6 -4.9 -4.8 -5.3 -3.4 -3.8 -4.0 -4.2 -4.2 -4.2
Public Debt % of GDP 2010 2011 70.2 72.9 70.0 70.4 72.7 70.2 72.9 73.9 77.0 68.6 69.9 70.2 71.6 68.6 73.9 70.2 70.5 70.5 71.0 71.2 69.9 77.0 72.8 72.8 72.9 73.5 73.9
9 | Public Debt | % of GDP
90
10 | Unemployment | % of active pop.
12
11 | Fiscal Balance | % of GDP
2
80 8
0
-2 70 -4 4 60 Austria Austria 50 2000 2005 2010 Euro area 0 1995 2000 2005 2010 Euro area -8 1995 -6 Austria Euro area World 2000 2005 2010
12 | Public Debt | evolution of fcst
80 2010 2011
13 | Unemployment | evolution of fcst
8
14 | Fiscal Balance | evolution of fcst
-3.5 2010 2011
7 75 6 70 5 2010 65 Jan Mar May Jul Sep Nov 4 Jan Mar May Jul Sep Nov 2011
-4.0
-4.5
-5.0
-5.5 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Austria
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 1995 - 2014 | in %
4 Austria Euro area 3 4
16 | Inflation | Q1 07-Q4 11 | in %
6 Austria Euro area
Consumer Prices and Current Account Balance
Consumer Prices var. in % 2010 2011 1.4 1.4 1.5 1.3 1.6 1.7 1.6 1.4 1.5 1.7 1.7 1.8 1.6 1.5 1.5 1.0 1.0 1.5 1.8 2.0 1.8 2.1 1.0 1.8 1.6 1.5 1.5 1.4 1.3 1.7 1.5 1.3 1.0 2.1 1.5 1.6 1.6 1.6 1.5 1.7 1.7 1.5 Current Account EUR bn 2010 2011 8.8 12.1 8.8 11.9 9.9 8.7 7.1 7.1 8.6 7.6 3.4 5.6 7.4 8.6 7.6 9.6 3.4 9.9 8.1 7.7 7.6 7.7 7.1 5.6 12.1 8.7 8.9 8.8 9.6 9.4 -
2
2
1
0
0 1995 2000 2005 2010
-2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
2.5 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
2.5 Maximum Consensus Minimum
2.0
2.0
1.5
1.5
1.0
1.0
Individual Forecasts Credit Suisse DekaBank Deutsche Bank DZ Bank Experian IHS Nomura Raiffeisen Research UBS Unicredit WIFO Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (June 2010) IMF (Oct. 2010) Euro. Comm. (May 2010)
0.5 Jan Mar May Jul Sep Nov
0.5 Jan Mar May Jul Sep Nov
19 | 10-year Rate | 1995 - 2014 | in %
8 Austria Germany
20 | Current Account | EUR bn
5
3
6
0
4
-3
2 1995 2000 2005 2010
-5 1995 2000 2005 2010
Notes and sources
21 | Stock Market | ATX
5,000
22 | Current Account | evolution of fcst
10
4,000
8
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary sector data are from Statistics Austria (STAT) and the Austrian National Bank (OeNB, Oesterreichische Nationalbank). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in the harmonised index of consumer prices (HICP) in %. Source: OeNB. 16 Quarterly inflation, year-on-year variation in the harmonised index of consumer prices (HICP) in %. Source: OeNB. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: OeNB. 20 Current account balance in EUR bn. Source: OeNB. 21 Daily index levels, ATX Index. January 2008 until the end of previous month. Source: Vienna Stock Exchange. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
3,000
6
2,000
4 2010 2011
1,000 Jan Jul Jan Jul Jan Jul
2 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Belgium
November 2010
Belgium
Belgium
Outlook improves
• Preliminary estimates confirm that the recovery is gaining steam, as gross domestic product rose 0.5% in the third quarter. In particular, the industrial sector is picking up, with output rising 7.1% annually in August, which marked the sixth consecutive month of growth. Consensus Forecast participants expect the economy to expand 1.8% this year, which is up 0.1 percentage points from last month’s estimate. In 2011, economic growth is expected to slow to 1.6%. Inflation rose from 2.9% in September to 3.0% in October, which marked the highest level since November 2008. Consensus Forecast panellists expect inflation to average 1.9% this year, which is up 0.1 percentage points from last month’s projection. Next year, inflation should average 1.8 %.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 10.3 269 26,106 2.0 0.0 102 2.0 3.7 2005-09 10.6 328 30,981 1.1 -2.0 90 2.2 0.6 2010-14 11.0 378 34,499 1.9 -3.9 102 1.9 1.5
•
•
Ricardo Aceves
Economist
REAL SECTOR | Economy grows faster than estimated in the third quarter In the third quarter, gross domestic product (GDP) increased 0.5% over the previous quarter in seasonally adjusted terms, according to preliminary data released by the National Bank of Belgium on 28 October. The quarterly expansion halved the 1.0% increase tallied in the second quarter (previously reported: +0.9% quarter-on-quarter) and overshot last month’s Consensus Forecast, which had the economy rising 0.2%. Final results will be published on 8 December. On an annual basis, the economy grew 2.1% in the third quarter, slower than the 2.6% expansion observed in the second quarter. The economy marked the third consecutive annual expansion after having contracted for five consecutive quarters since the fourth quarter of 2008. The Central Bank expects economic activity to grow 1.3% this year. For 2011, monetary authorities see the economy expanding 1.7%. Consensus Forecast panellists are more optimistic than the Central Bank and anticipate GDP expanding 1.8% this year, which is up 0.1 percentage points from last month’s projection. For 2011, the panel expects the economy to expand 1.6%. REAL SECTOR | Industrial output accelerates in August In August, industrial production expanded 7.1% over the same month last year, which came in above the 4.4% annual increase registered in July. The reading marked the sixth consecutive month of positive growth in the industrial sector. The acceleration observed in August was mainly the result of faster growth in the manufacturing sector (July: +6.2% year-on-year; August: +10.3% yoy), as well as in electricity, gas and water supply (July: +1.9% yoy; August: +3.8%
Gross Domestic Product | variation in %
1.5
1.0 1.0 % 0.5 0.4
1.0
0.5
0.1 0.0 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10
Note: Quarter-on-quarter changes of seasonally adjusted GDP in %. Source: National Bank of Belgium and FocusEconomics Consensus Forecast.
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FOCUSECONOMICS
Industrial Production | variation in %
6.0 0.0
Belgium
November 2010
5.0 3.5 1.9 0.6 0.8 0.4 -0.2
yoy). A month-on-month analysis confirms the strong expansion suggested by the annual figures, as industrial output rose a seasonally adjusted 0.1% in August (July: -0.8% mom). The trend continues to improve, with annual average variation in industrial production rising from minus 1.5% in July to a flat reading in August, which is finally scratching positive territory after 21 consecutive months mired in recession. Consensus Forecast panellists expect industrial production to expand 3.0% this year. For next year, the panel anticipates industrial output to grow a more moderate 2.0%. MONETARY SECTOR | Inflation rises to the highest level in over two years In October, consumer prices added 0.1% over the previous month, which came in below the 0.3% increase observed in September. The main drivers behind the October reading were higher prices for meat, as well as for electricity, which were only partially offset by lower prices for vegetables. In spite of the small price increase, annual inflation rose from 2.9% in September to 3.0%, which marked the highest level since November 2008. In addition, annual average harmonised inflation (HICP) jumped from 1.2% in August to 1.5% in September (the last month for which data are available). September’s figure marked the highest level since August 2009. The Central Bank expects harmonised inflation to average to 2.0% this year and 1.9% in 2011. Consensus Forecast panellists broadly share monetary authorities’ view and see inflation averaging 1.9% in 2010, which is up 0.1% from previous month’s forecast. For 2011, the panel expects inflation to reach 1.8%.
4.0
-5.0
2.0 % 0.0
0.1
% -10.0
-2.0 -2.2
-1.4 -2.8
-1.1
-0.8
Month-on-month (right scale) Annual average (left scale) Jan Feb Mar Apr May Jun Jul Aug -15.0
-4.0 Aug Sep Oct Nov Dec
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: National Bank of Belgium and FocusEconomics calculations.
Inflation | Consumer Price Index
0.6 0.5 0.4 0.3 0.2 % 0.0 0.0 0.0 0.2 0.0 0.1 4.0
0.4
0.4
0.4 0.3 0.3 2.0
0.1
% 0.0
monthly (left scale)
-0.2 Oct Nov Dec Jan Feb Mar Apr
annual (right scale)
-2.0 May Jun Jul Aug Sep Oct
Note: Monthly and annual consumer price index variation in %. Source: Statistics Belgium and FocusEconomics calculations.
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FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (HICP, annual variation in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (BEL20, annual var. in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, s.a. qoq var. in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Unemployment (eop, % of active population) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 10.4 28,992 303 1.7 2.6 1.0 1.2 7.0 -1.1 8.4 -2.7 92 2.8 2.5 2.25 2.49 3.40 21.3 1.18 1.24 2.0 6.0 12.7 270 257 9.0 11.6 Q3 09 -2.7 1.0 -1.2 1.00 0.75 1.46 Jan-10 -5.2 8.6 0.5 0.6 1.39 2006 10.5 30,267 318 2.7 2.1 1.8 0.6 2.0 4.6 8.3 0.3 88 2.1 2.3 3.50 3.73 3.82 23.3 1.32 1.26 1.9 5.9 12.0 292 280 8.3 9.0 Q4 09 -0.1 0.4 -0.2 1.00 0.70 1.43 Feb-10 -1.5 8.7 0.4 0.7 1.36
Belgium
November 2010
2007 10.6 31,658 335 2.9 3.1 1.8 2.1 6.5 2.8 7.5 -0.2 84 3.1 1.8 4.00 4.68 4.33 -5.8 1.46 1.37 1.6 5.3 14.2 314 300 7.7 7.2 Q1 10 1.7 0.1 1.2 1.00 0.63 1.35 Mar-10 8.1 8.5 0.4 1.7 1.35
2008 10.7 32,378 345 1.0 2.0 1.5 2.3 2.9 -0.8 7.0 -1.2 90 2.7 4.5 2.50 2.89 4.40 -53.8 1.39 1.47 -2.9 -10.1 3.8 321 317 2.0 5.6 Q2 10 2.6 1.0 2.4 1.00 0.77 1.22 Apr-10 6.0 8.3 0.3 1.8 1.32
2009 10.7 31,609 339 -2.8 -1.9 -0.3 0.6 -5.3 -12.1 7.9 -6.0 97 0.3 0.0 1.00 0.70 3.89 32.3 1.43 1.39 0.3 1.0 12.6 265 253 -17.3 -20.3 Q3 10 2.1 0.5 2.6 1.00 0.89 1.37 May-10 6.2 8.0 0.4 2.3 1.23
2010 10.8 32,543 352 1.8 1.3 1.3 -1.2 3.0 8.7 -5.0 100 1.9 1.00 0.97 3.02 1.33 1.38 1.3 4.7 14.5 289 274 8.9 8.3 Q4 10 1.4 0.4 2.4 1.00 0.97 1.33 Jun-10 8.8 8.1 0.0 2.5 1.22
2011 10.9 33,407 364 1.6 1.3 1.1 2.4 2.0 8.7 -4.5 101 1.8 1.17 1.37 3.41 1.30 1.31 1.3 4.8 16.6 306 289 6.0 5.7 Q1 11 1.7 0.3 2.1 1.00 1.10 1.35 Jul-10 4.4 8.9 0.0 2.6 1.30
2012 11.0 34,404 377 1.9 1.9 1.7 3.1 3.2 8.2 -3.8 103 1.9 2.10 2.18 3.54 1.26 1.28 0.8 2.9 20.5 320 303 4.4 4.6 Q2 11 1.3 0.2 1.8 1.03 1.25 1.35 Aug-10 7.1 8.9 0.1 2.3 1.28
2013 11.0 35,513 392 2.1 2.3 2.0 3.3 3.9 8.0 -3.3 103 1.8 2.80 2.90 3.90 1.26 1.26 1.9 7.6 25.2 330 316 3.1 4.6 Q3 11 1.4 0.4 2.0 1.07 1.39 1.34 Sep-10 8.7 0.3 2.9 1.37
2014 11.1 36,630 407 2.0 2.3 1.9 2.9 3.5 7.7 -3.1 102 1.9 3.08 2.92 4.38 1.25 1.25 2.3 9.2 30.6 340 330 3.0 4.4 Q4 11 1.4 0.4 2.1 1.17 1.37 1.30 Oct-10 0.1 3.0 1.39
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP |1995 - 2014 | % variation
6
Belgium
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
6
Real GDP growth in %
3
3
0
0
-3 Belgium Euro area World -6 1995 2000 2005 2010
-3 Belgium Euro area World
-6
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
4 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
3
3
2
2
1
1
0 Jan Mar May Jul Sep Nov
0 Jan
Maximum Consensus Minimum Mar May Jul Sep Nov
Individual Forecasts BNP Paribas Fortis Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank Dexia DZ Bank Experian ING KBC Raiffesien Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (Oct. 2010) IMF (Oct. 2010) European Commission (May 2010)
2010 1.8 1.6 1.0 2.0 1.8 1.8 2.0 2.1 1.7 1.7 1.8 1.8 2.1 1.0 2.1 1.8 1.8 1.7 1.5 1.4 1.3 1.6 1.3
2011 1.3 1.6 1.8 2.3 1.2 1.2 1.8 1.3 1.9 1.6 1.5 1.5 2.0 1.2 2.3 1.6 1.6 1.7 1.7 1.8 1.7 1.7 1.6
5 | Consumption | % variation
4
6 | Investment | % variation
10
5 2 0
-5 0 Belgium Euro area -2 1995 2000 2005 2010 -15 1995 2000 2005 2010 -10 Belgium Euro area
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the National Bank of Belgium (NBB, Nationale Bank van België). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. 6 Gross fixed capital formation, annual variation in %. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt, % of GDP. 10 Unemployment, % of active population. 11 General government balance, % of GDP. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
7 | Consumption | evolution of fcst
2.0 2010 2011 1.5
8 | Investment | evolution of forecasts
6 2010 3 2011
1.0 0 0.5
0.0 Jan Mar May Jul Sep Nov
-3 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 1.4 0.7 1.2 1.2 1.3 1.3 1.4 1.4 1.3 1.1 1.3 1.2 1.2 1.4 1.3 1.3 1.3 0.8 0.9 1.1 1.4 1.2 1.1 1.1 1.3 1.4
Belgium
November 2010
Individual Forecasts BNP Paribas Fortis Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank Dexia DZ Bank Experian ING KBC Raiffesien Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -1.1 1.7 -0.9 3.4 -1.6 2.3 -1.1 2.0 -1.6 -0.9 -1.1 -1.2 -1.2 -1.0 -1.0 2.0 3.4 2.3 2.4 2.4 2.8 2.8
Unemployment % of active pop. 2010 2011 8.8 9.1 8.6 9.0 8.6 8.7 8.5 8.3 8.7 8.5 8.7 8.7 8.5 8.7 8.6 8.7 8.7 8.6 8.6 8.3 9.0 8.7 8.7 8.7 8.7 8.6
Fiscal Balance % of GDP 2010 2011 -4.9 -4.4 -5.0 -4.2 -4.8 -4.4 -4.4 -3.7 -4.7 -3.9 -4.7 -4.3 -5.6 -5.6 -5.1 -4.6 -4.8 -4.1 -4.6 -4.4 -5.0 -5.0 -5.8 -5.8 -5.8 -4.4 -4.8 -5.0 -5.1 -5.2 -5.3 -5.8 -3.7 -4.4 -4.5 -4.7 -4.7 -4.6
Public Debt % of GDP 2010 2011 98 100 99 100 99 101 98 100 101 100 101 100 101 99 101 101 104 98 101 100 100 100 100 100 100 104 101 101 101 101 102
9 | Public Debt | % of GDP
120 Belgium Euro area
10 | Unemployment | % of active pop.
11 Belgium Euro area 10
11 | Fiscal Balance | % of GDP
3
0
100 9 -3 8 80 7 -6 Belgium Euro area World -9 2000 2005 2010 1995 2000 2005 2010
60 2000 2005 2010
6 1995
12 | Public Debt | evolution of fcst
105 2010 103 2011
13 | Unemployment | evolution of fcst
9.5 2010 2011
14 | Fiscal Balance | evolution of fcst
-4.0 2010 -4.5 2011
9.0 101 8.5 99 -5.5 -5.0
97 Jan Mar May Jul Sep Nov
8.0 Jan Mar May Jul Sep Nov
-6.0 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Belgium
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000 - 2014 | in %
6
16 | Inflation | Q1 07-Q4 11 | in %
6
Consumer Prices and Current Account Balance
Consumer Prices var. in % 2010 2011 2.2 2.1 1.7 1.8 1.3 1.7 1.7 1.5 2.2 1.7 2.1 1.7 1.8 1.8 2.2 1.8 1.8 1.7 1.9 1.9 1.9 1.8 2.0 1.7 2.1 1.9 1.3 2.2 1.9 1.9 1.8 1.6 1.6 2.0 2.0 1.6 1.5 1.9 1.7 1.8 1.7 1.5 1.5 1.9 1.9 1.6 Current Account EUR bn 2010 2011 10.2 11.3 10.6 12.0 8.8 7.3 -0.7 0.7 -5.3 -7.3 -5.3 10.6 8.8 4.7 4.8 7.8 6.1 -7.3 12.0 7.3 4.8 4.8 8.9 6.8 -
4
4
2
2
0 Belgium Euro area -2 2000 2005 2010
0 Belgium Euro area -2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
2.0
2
1.5
1
1.0 Maximum Consensus Minimum
0 Jan Mar May Jul Sep Nov
0.5 Jan Mar May Jul Sep Nov
Individual Forecasts BNP Paribas Fortis Commerzbank Credit Agricole Credit Suisse DekaBank Deutsche Bank Dexia DZ Bank Experian ING KBC Raiffesien Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (Oct. 2010) IMF (Oct. 2010) Euro. Comm. (May 2010)
19 | 10-year Rate | 1995 - 2014 | in %
8 Belgium Germany 6
20 | Current Account | EUR bn
20
10
0
4
-10
2 1995 2000 2005 2010
-20 2000 2005 2010
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary sector data are from the National Bank of Belgium (NBB, Nationale Bank van België), Statistics Belgium (SB) and the European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in %. 2000-2014. Source: SB. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer price (HICP) in %. Source: SB. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: Belgostat, ECB. 20 Current account balance in EUR bn. 2000-2014. Source: NBB. 21 Daily index levels, BEL 20 Index. January 2008 until the end of previous month. Source: Brussels Stock Exchange. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010
21 | Stock Market | BEL 20
5,000
22 | Current Account | evolution of fcst
12 2010 2011
4,000
9
6
3,000
3
2,000
0
1,000 Jan Jul Jan Jul Jan Jul
-3 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Finland
November 2010
Finland
Finland
Outlook improves
• Indicators across the board point towards sustained growth in the coming quarters, as the recovery in the external sector is filtering to the domestic economy. That said, growth is expected to decelerate compared to the strong 1.9% quarter-on-quarter expansion tallied in the second quarter. Considering the better-than-expected performance of the Finish economy, Consensus Forecast panellists revised their growth forecasts up by 0.3 percentage points over last month to 2.4%. Next year, the panel sees the economy growing 2.5%. In September, harmonised consumer price inflation increased a notch to 1.4%. The panel anticipates inflation will remain broadly stable throughout the rest of the year and average 1.3%, which is unchanged over the previous month’s forecast. In 2011, the panel anticipates inflation will accelerate to 2.0%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 5.2 142 27,391 3.1 4.1 43.3 1.8 7.1 2005-09 5.3 172 32,452 1.1 2.8 39.0 1.8 3.5 2010-14 5.4 194 35,719 2.5 -2.0 51.9 1.7 1.8
•
•
Gerardo Morán
Senior Economist
REAL SECTOR | Growth moderates in July In July, the economy grew 4.6% over the same month last year in working-day adjusted terms. The reading represented a moderation compared to the strong 5.5% expansion recorded in June (previously reported: +5.1% year-on-year). A month-on-month comparison corroborates the deterioration suggested by the annual figures, as the economy contracted 0.2% over June in seasonally adjusted terms. The monthly slowdown was the result of a deceleration in manufacturing and construction, which grew 7.3% (June: +11.3% yoy). In contrast, agriculture, hunting, forestry and fishery accelerated to a 10.1% expansion (June: +2.3% yoy). Finally, growth in the services sector remained unchanged at June’s 3.2%. In its latest Economic Outlook Bulletin, the Central Bank raised its growth forecast for this year from 1.6% to 2.6%. Consensus Forecast panellists broadly share the Bank’s assessment and see the economy growing 2.4% this year, which is up 0.3 percentage points over the previous month’s projection. Next year, the panel expects the economy to grow 2.5%. MONETARY SECTOR | Inflation continues to climb
Monthly GDP | variation in %
2.0 1.4 1.1 1.0 % 0.0 -0.2 -1.0 -0.3 -0.2 -0.2 0.5 0.3 0.5 0.1 0.0 % -5.0 1.2 1.5 5.0 10.0
-1.0
-10.0
-2.0 Jul Aug Sep Oct
MoM s.a. (left scale) Nov Dec Jan Feb Mar
YoY (right scale) Apr May Jun Jul
-15.0
Note: Month-on-month seasonally adjusted and annual variation of the trend indicator of output. Source: Statistics Finland and FocusEconomics calculations.
In September, consumer prices rose 0.4% over the previous month, which mirrored the reading recorded in August. The monthly price increase was mostly driven by higher food prices (+1.3% month-on-month), in particular for vegetables. Moreover, a rise in prices for clothing and footwear (+5.1% mom) owing to the end of the summer sales, also contributed to the monthly price increase. As a result of the relatively high monthly figure, annual inflation continued to trend upwards, rising from 1.2% in August to 1.4% in September. In the same
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Inflation | Consumer Price Index
0.8 Monthly (left scale) Annual (right scale) 0.5 0.4 0.4 % 0.0 -0.1 -0.4 -0.5 -0.8 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep -0.5 -2.0 -1.0 0.2 0.1 0.1 0.1 0.3 0.2 % 0.0 0.4 0.4 1.0 2.0
Finland
November 2010
vein, annual inflation as measured by the harmonised index of consumer prices (HICP), stepped up from 1.3% in August to 1.4% in September, which drove up the annual average harmonised inflation rate a notch to 1.4%. In its most recent Economic Outlook Bulletin published in September, the Central Bank projects inflation to average 1.6% this year and to accelerate further to an average of 1.9% next year. Consensus Forecast panellists anticipate inflation to average 1.3% this year, which is unchanged over last month’s forecast. For 2011, the panel expects inflation to reach 2.0%.
Note: Monthly and annual consumer price index variations in %. Source: Statistics Finland and FocusEconomics calculations.
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Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual var. in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (CPI, annual average in %) HICP (annual average variation in %) Producer prices (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (OMXH25, annual var. in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) HICP (annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Trend Indicator of Output (annual var. in %) Trend Indicator of Output (s.a. mom var. in %) Unemployment (eop, % of active population) Cons. Confidence Index (long-term avg. 13.2) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) HICP (annual variation in %) Exchange Rate (USD per EUR, eop) 2005 5.3 29,991 157 2.9 3.1 2.2 3.6 0.3 8.4 2.7 41.7 0.9 0.8 3.8 2.25 2.49 3.23 25.7 1.18 1.24 3.4 5.3 7.4 52.6 45.2 7.2 15.1 Q3 09 -8.1 1.1 1.2 1.00 0.75 1.46 Jan-10 -0.3 -0.3 9.5 14.5 0.1 -0.2 1.6 1.39 2006 5.3 31,453 166 4.4 4.3 0.4 1.9 9.9 7.7 4.0 39.7 1.6 1.3 3.0 3.50 3.73 3.97 26.5 1.32 1.26 4.2 7.0 8.6 61.4 52.8 16.8 16.7 Q4 09 -5.2 0.3 1.2 1.00 0.70 1.43 Feb-10 -1.0 -0.2 9.2 15.9 0.4 0.1 1.3 1.36
Finland
November 2010
2007 5.3 33,978 180 5.3 3.5 1.1 10.7 4.4 6.9 5.2 35.2 2.5 1.6 2.9 4.00 4.68 4.40 3.4 1.46 1.37 4.3 7.6 9.1 65.7 56.6 7.0 7.2 Q1 10 0.0 0.1 1.5 1.00 0.63 1.35 Mar-10 -0.3 1.4 9.1 15.4 0.5 0.6 1.5 1.35
2008 5.4 34,752 185 0.9 1.7 2.4 -0.4 0.8 6.4 4.2 34.2 4.1 3.9 -0.8 2.50 2.89 3.69 -49.6 1.39 1.47 2.9 5.4 6.9 65.6 58.8 -0.2 3.8 Q2 10 3.7 1.9 1.4 1.00 0.77 1.22 Apr-10 1.5 0.1 9.3 17.9 0.3 0.9 1.6 1.32
2009 5.3 32,088 171 -8.0 -1.9 1.2 -14.7 -18.0 8.2 -2.2 44.0 0.0 1.6 -2.6 1.00 0.70 3.57 34.1 1.43 1.39 2.7 4.7 3.4 45.1 41.7 -31.3 -29.0 Q3 10 3.8 1.1 1.3 1.00 0.89 1.37 May-10 4.4 1.2 10.5 15.8 -0.1 1.0 1.4 1.23
2010 5.4 33,034 178 2.4 2.1 0.6 6.8 8.5 -3.4 49.3 1.3 1.00 0.97 2.99 1.33 1.38 1.6 2.9 3.9 49.5 45.3 9.8 8.7 Q4 10 4.2 0.6 1.8 1.00 0.97 1.33 Jun-10 5.5 1.5 8.8 18.7 0.2 0.9 1.3 1.22
2011 5.4 34,338 186 2.5 1.9 4.6 5.4 8.0 -2.4 51.8 2.0 1.17 1.37 3.48 1.30 1.31 1.8 3.3 4.2 53.6 48.9 8.2 7.8 Q1 11 4.0 0.0 2.1 1.00 1.10 1.35 Jul-10 4.6 -0.2 7.5 19.1 -0.5 1.1 1.3 1.30
2012 5.4 35,727 194 2.6 2.2 4.8 4.8 7.6 -1.4 51.9 2.0 2.10 2.18 3.57 1.26 1.28 1.8 3.5 4.6 58.6 53.6 9.3 9.6 Q2 11 3.0 0.7 2.0 1.03 1.25 1.35 Aug-10 7.3 21.9 0.4 1.2 1.3 1.28
2013 5.5 37,074 202 2.5 2.4 4.3 4.5 7.3 -1.4 53.1 1.7 2.80 2.90 3.91 1.26 1.26 1.9 3.8 5.4 64.2 59.7 9.6 11.4 Q3 11 2.6 0.7 2.1 1.07 1.39 1.34 Sep-10 7.0 22.9 0.4 1.4 1.4 1.37
2014 5.5 38,424 211 2.4 2.5 4.2 4.8 7.1 -1.6 53.5 1.7 3.08 2.92 4.27 1.25 1.25 1.9 4.1 6.2 69.4 64.7 8.1 8.4 Q4 11 2.3 0.4 2.1 1.17 1.37 1.30 Oct-10 20.5 1.39
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Real Sector | Gross Domestic Product
1 | Real GDP | 1995 - 2014 | % variation
10
Finland
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
12 Finland Euro area World
Real GDP growth in %
5
6
0
0
-5 Finland Euro area World 2000 2005 2010
-6
-10 1995
-12 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
4 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
5 Maximum Consensus 4 Minimum
3
2
3
1
2
Individual Forecasts Aktia Bank Credit Suisse DekaBank Deutsche Bank DZ Bank ETLA Research Institute Experian Handelsbanken Nordea Raiffeisen Research Sampo Bank Swedbank UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (Sep. 2010) IMF (Oct. 2010) European Commission (May 2010)
2010 3.0 2.5 0.6 2.4 0.9 3.5 1.9 3.4 3.5 2.4 3.1 2.2 1.6 0.6 3.5 2.4 2.4 2.1 1.5 1.3 2.6 2.4 1.4
2011 3.0 2.9 2.2 2.0 1.4 4.0 2.0 2.7 3.0 1.8 2.5 2.4 2.1 1.4 4.0 2.4 2.5 2.5 2.4 2.3 3.0 2.0 2.1
0 Jan Mar May Jul Sep Nov
1 Jan Mar May Jul Sep Nov
5 | Consumption | variation in %
6
6 | Investment | variation in %
20 Finland Euro area
4
10
2
0
0 Finland Euro area 2000 2005 2010
-10
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Finland (SF) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: SF. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: SF. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: SF. 6 Gross fixed capital formation, annual variation in %. Source: SF. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Industrial production, annual variation in %. Source: SF. 10 Unemployment, % of active population. Source: SF. 11 General government balance, % of GDP. Source: Eurostat. 12 Industrial production, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
-2 1995
-20 1995 2000 2005 2010
7 | Consumption | evolution of fcst
3
8 | Investment | evolution of forecasts
6
3 2 0 1 -3 2010 0 Jan Mar May Jul Sep Nov 2011 -6 Jan Mar May Jul Sep Nov 2010 2011
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Real Sector | Additional forecasts
Consumption % variation 2010 2011 2.5 2.0 2.5 2.0 1.6 1.6 2.6 2.4 2.4 2.6 2.3 1.5 2.3 2.5 0.5 1.0 0.5 2.6 2.4 2.1 2.1 1.6 1.4 1.0 2.6 2.0 1.9 1.9 1.9 1.7 Investment % variation 2010 2011 1.0 6.0 2.5 8.0 -1.2 3.1 0.9 5.3 0.7 4.1 -1.0 5.0 1.2 3.0 1.0 2.0 -1.2 2.5 1.0 0.6 0.6 -0.8 -0.6 2.0 8.0 4.6 4.6 4.6 4.2 3.4
Finland
November 2010
Individual Forecasts Aktia Bank Credit Suisse DekaBank Deutsche Bank DZ Bank ETLA Research Institute Experian Handelsbanken Nordea Raiffeisen Research Sampo Bank Swedbank UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Industry % variation 2010 2011 6.8 8.2 11.0 5.0 10.0 5.0 5.0 6.0 1.3 3.0 1.3 11.0 6.8 6.8 6.8 6.1 2.7 3.0 8.2 5.0 5.4 5.4 5.1 4.0
Unemployment % of active pop. 2010 2011 8.5 7.9 8.4 7.7 8.3 8.0 8.2 8.0 8.5 8.1 8.5 8.1 8.5 7.8 8.5 8.2 8.8 8.2 8.2 8.8 8.5 8.5 8.5 9.0 9.1 7.7 8.2 8.0 8.0 8.1 8.6 8.7
Fiscal Balance % of GDP 2010 2011 -3.0 -2.0 -3.6 -3.0 -3.4 -3.1 -3.2 -2.5 -4.0 -3.0 -2.7 -1.8 -3.5 -2.8 -2.4 -0.5 -2.5 -0.5 -3.8 -2.9 -3.1 -1.5 -4.2 -2.8 -4.5 -4.3 -4.5 -2.4 -3.4 -3.4 -3.4 -3.7 -3.7 -4.3 -0.5 -2.8 -2.4 -2.4 -2.9 -3.2
Public Debt % of GDP 2010 2011 49.0 50.0 50.5 54.9 51.0 48.4 49.6 47.5 48.3 50.5 54.9 49.0 51.0 50.5 53.0 47.4 52.7 47.4 51.0 49.0 49.3 49.3 49.2 48.5 48.3 54.9 51.9 51.8 51.8 52.5 52.5
9 | Industry | variation in %
16
10 | Unemployment | % of active pop.
18 Finland Euro area
11 | Fiscal Balance | % of GDP
8
8
15
4
0 12 -8 9 Finland Euro area -24 1995 2000 2005 2010 6 1995 2000 2005 2010 -8 1995 -4 Finland Euro area World 2000 2005 2010 0
-16
12 | Industry | evolution of forecasts
8
13 | Unemployment | evolution of fcst
10.0
14 | Fiscal Balance | evolution of fcst
-2
9.5 6 9.0 -3
8.5 4 8.0 2010 2 Jan Mar May Jul Sep Nov 2011 7.5 Jan Mar May Jul Sep Nov 2010 2011 -5 Jan Mar May Jul Sep Nov 2010 2011 -4
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Finland
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000 - 2014 | in %
5 Finland Euro area 4 4
16 | Inflation | Q1 07-Q4 11 | in %
6
Consumer Prices and Current Account Balance
Consumer Prices Current Account var. in % EUR bn 2010 2011 2010 2011 1.1 2.1 1.8 1.8 2.0 2.4 1.5 1.9 1.9 2.4 1.6 1.9 4.5 3.7 1.5 1.9 1.2 2.4 2.0 3.0 1.4 1.7 2.8 2.6 1.0 2.2 3.0 2.8 0.8 2.0 2.8 3.8 1.5 1.8 3.7 2.8 1.3 2.3 2.5 3.5 1.5 2.5 3.0 3.4 1.0 1.4 3.5 5.5 0.8 1.8 1.4 1.3 1.3 1.3 1.4 1.6 1.4 1.7 1.4 2.5 1.9 2.0 2.0 1.8 1.6 1.9 1.8 1.9 1.9 4.5 2.8 2.9 2.9 3.1 3.1 2.4 5.5 3.0 3.3 3.4 3.8 3.6 -
3 2 2 0 1 Finland Euro area 0 2000 2005 2010 -2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
3 Maximum Consensus Minimum 2
18 | Inflation 2011 | evolution of fcst
3
2
1
1 Maximum Consensus Minimum
Individual Forecasts Aktia Bank Credit Suisse DekaBank Deutsche Bank DZ Bank ETLA Research Institute Experian Handelsbanken Nordea Raiffeisen Research Sampo Bank Swedbank UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts Central Bank (Sep. 2010) IMF (Oct. 2010) Euro. Comm. (May 2010)
0 Jan Mar May Jul Sep Nov
0 Jan Mar May Jul Sep Nov
19 | 10-year Rate | 1995 - 2014 | in %
8
20 | Current Account | EUR bn
15
12
6
9
6
4
3
Finland Germany 2 1995 2000 2005 2010
0 1995 2000 2005 2010
Notes and sources
21 | Stock Market | OMXH25
3,500
22 | Current Account | evolution of fcst
4.0 2010 2011
3,000
3.5
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Finland (SF), the European Central Bank (ECB), and the Bank of Finland (BoF). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). 2000-2014. Source: SF. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer prices (HICP) in % (aop). Source: SF. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: BoF, ECB. 20 Current account balance in EUR bn. Source: BoF. 21 Daily index levels. OMXH25 (Helsinki Stock Exchange). Jan. 2008 until end of previous month. Source: NASDAQ OMX Group. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
2,500
2,000
3.0
1,500
1,000 Jan Jul Jan Jul Jan Jul
2.5 Jan Mar May Jul Sep Nov
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Greece
November 2010
Greece
Greece
Outlook stable
• On 4 October, the government presented the budget draft for 2011, which aims at reducing the fiscal deficit to 7.0% of GDP next year, following on an estimated 7.8% of GDP deficit this year. Final numbers for the 2009 deficit will be published by 15 November. The final deficit number is expected to be corrected from the current 13.6% of GDP to 15.5% of GDP. Consensus Forecast panellists expect the economy to contract 3.8% this year, which is unchanged over last month’s estimate. In 2011, the economy is unlikely to escape recession, with the panel seeing GDP to contract 2.2%. Inflation rose from 5.5% in August to 5.6% in September. Consensus Forecast panellists expect consumer prices to increase an average of 4.3% in 2010. In 2011, inflation is expected to moderate to an average 1.8%, amid weak economic activity.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): 2000-04 11.0 160 14,510 4.5 -5.2 101 3.4 -6.8 2005-09 11.2 222 19,817 2.3 -7.0 102 3.1 -11.8 2010-14 11.4 245 21,499 -0.2 -5.5 144 1.9 -6.0
•
Inflation (%):
Current Account (% of GDP):
•
Joan Enric Domene
Economist
FISCAL SECTOR | Government presents 2011 budget draft On 4 October, the government presented the draft 2011 budget, which projects a fiscal deficit of 7.0% of GDP for next year. The projection is well below the 7.6% target set in the Economic Policy Programme, which aims at bringing the budget deficit to under 3.0% of GDP by 2014. In 2010, the deficit is estimated to reach 7.8% of GDP, lower than the 8.1% of GDP projected in the programme. The budget reflects a 5.9% decline in overall expenditure and a 6.9% increase in revenues. The fiscal adjustments include reductions in public investment, as well as savings from wage cuts in the public sector. That said, additional revenues are expected to come from the VAT increase, which was implemented in July this year, as well as from taxes on property and a special levy on profitable enterprises. Meanwhile, Eurostat, in cooperation with the Greek Statistical Office and the Greek Court of Auditors, is assessing the quality of public accounts data, thus delaying the revision of Greek budget deficit figures for 2006-2009 until 15 November. According to market analysts, the budget deficit figure could be revised to 15.5% of GDP, up from the 13.6% initially reported. Consensus Forecast panellists are more pessimistic than the government and see the fiscal deficit narrowing to 7.6% of GDP in 2011. REAL SECTOR | Industrial production moderates rate of contraction in August In August, industrial production fell 2.1% over the same month last year, which represented an improvement compared to the 9.1% drop registered in July. However, the industrial sector remains mired in recession despite the favorable base effect.
Fiscal Balance | % of GDP
0
-3
-6
%
-9
-12
-15 1990
1995
2000
2005
2010
Note: Annual fiscal balance as % of GDP; red line represents the 3.0% of GDP threshold stipulated by the Maastricht Treaty. Source: Eurostat and FocusEconomics Consensus Forecast.
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Industrial Production | variation in %
0.0 -6.0
Greece
November 2010
The improvement in August was driven by a rebound in mining and quarrying, which expanded 3.1% year-on-year contrasting the 15.8% contraction in July, as well as a better performance of water supply (July: -5.9% yoy; August: +2.3% yoy) and electricity supply (July: -6.0% yoy; August: +0.2% yoy). Nonetheless, the all-important manufacturing sector remains in negative territory, decreasing 3.9% yoy, which represents a slower rate of contraction compared to the 9.7% drop in the previous month. Despite the monthly reading, the trend continues to improve, as the annual average variation in industrial production stepped up from minus 7.0% in July to minus 6.4% in August. Consensus Forecast panellists see industrial production contracting 4.1% this year, which is unchanged from last month’s forecast. Meanwhile, Consensus Forecast panellists see the overall economy contracting 3.8% this year, which is unchanged from last month’s forecast. For 2011, the panel anticipates GDP to contract 2.2%. MONETARY SECTOR | Inflation inches up in September In September, consumer prices rose 1.9% over the previous month, which contrasted the 0.7% drop recorded in August. The monthly price increase mainly reflected higher prices for clothing and footwear (+17.6% month-on-month), owing to the end of seasonal sales. The increase was also fanned by higher prices for food and non-alcoholic beverages (+0.7% mom) and household equipment (+5.4% mom), which helped offsetting lower prices for alcoholic beverages and tobacco (-1.4% mom). Due to the monthly reading, annual inflation inched up from 5.5% in August to 5.6% in September, which represents the highest level since 1997. Meanwhile, the harmonised index of consumer prices (HICP) also inched up in September, thus driving annual average harmonised inflation up to 3.9% (August: +3.5%). The European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) expect 2010 inflation to end the year at 4.8%. In 2011, inflation is likely to moderate sharply to 1.5% - 2.0% amid subdued economic activity and high unemployment. Consensus Forecast panellists expect harmonised inflation to average 4.3% this year, which is up 0.2 percentage points from last month’s forecast. For 2011, panellists expect inflation to average 1.8%.
-2.1 -5.0 -5.2 % -9.1 -6.7 -6.7 -9.1 -10.0 -4.3 -4.2 -4.3 -8.0
-4.7
% -10.0
-10.0
-9.7
-9.5
YoY (left scale) Annual Average (right scale) -15.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug -12.0
Note: Month-on-month changes of seasonally adjusted industrial production and moving annual average growth rate in %. Source: National Statistical Service of Greece (EL.STAT) and FocusEconomics calculations.
Inflation | Consumer Price Index
4.0 Monthly (left scale) 3.0 Annual (right scale) 3.1
6.0
2.0
1.9 1.2
1.9
4.0
1.0 % 0.0 0.5 0.5 0.2
0.8 2.0 % -0.3 -0.5 Feb Mar Apr May Jun -0.5 Jul
-1.0 Sep Oct Nov Dec
-0.7 Jan
-0.7 Aug Sep
0.0
Note: Monthly and annual consumer price index variation in %. Source: National Statistical Service of Greece (EL.STAT) and FocusEconomics calculations.
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Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Total Consumption (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (HICP, annual variation in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) Unemployment (eop, % of active population) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 11.1 17,594 195 2.2 3.9 4.7 1.1 -4.5 -1.6 9.9 -5.2 100 5.5 3.5 2.25 2.49 3.57 1.18 1.24 -7.3 -14.3 -27.5 14.2 41.7 12.2 9.6 Q3 09 -2.5 -0.5 9.7 0.8 1.00 0.75 1.46 Jan-10 -4.3 -0.7 2.4 1.39 2006 11.1 18,878 210 4.5 4.3 5.2 -0.1 9.8 0.8 8.9 -3.6 98 3.2 3.3 3.50 3.73 4.04 1.32 1.26 -11.3 -23.8 -35.3 16.2 51.4 13.8 23.2 Q4 09 -2.5 -0.8 10.2 2.0 1.00 0.70 1.43 Feb-10 -10.0 -0.5 2.8 1.36
Greece
November 2010
2007 11.2 20,231 226 4.5 4.2 3.3 8.4 4.6 2.3 8.3 -5.1 96 3.9 3.0 4.00 4.68 4.54 1.46 1.37 -14.4 -32.6 -41.5 17.4 58.9 8.0 14.6 Q1 10 -2.3 -0.8 11.1 3.0 1.00 0.63 1.35 Mar-10 -4.2 3.1 3.9 1.35
2008 11.2 21,311 239 2.0 2.0 2.3 0.6 -7.4 -4.0 7.7 -7.7 99 2.2 4.2 2.50 2.89 5.07 1.39 1.47 -14.6 -34.8 -44.0 19.8 63.9 13.6 8.3 Q2 10 -3.7 -1.8 12.2 5.1 1.00 0.77 1.22 Apr-10 -6.7 1.2 4.8 1.32
2009 11.3 21,073 237 -2.0 0.4 -1.8 9.6 -13.9 -9.2 9.4 -13.6 115 2.6 1.3 1.00 0.70 5.49 1.43 1.39 -11.2 -26.6 -30.8 15.3 46.1 -22.7 -27.8 Q3 10 -4.5 -1.6 12.2 5.6 1.00 0.89 1.37 May-10 -4.7 0.8 5.4 1.23
2010 11.3 21,088 239 -3.8 -3.5 -10.8 -4.1 12.2 -8.6 132 4.3 1.00 0.97 4.60 1.33 1.38 -9.9 -23.6 -28.9 15.9 44.8 3.9 -2.8 Q4 10 -4.5 -0.6 12.4 4.8 1.00 0.97 1.33 Jun-10 -4.3 -0.3 5.2 1.22
2011 11.4 20,927 238 -2.2 -3.6 -5.5 -0.1 14.1 -7.6 141 1.8 1.17 1.37 4.68 1.30 1.31 -7.9 -18.7 -25.4 16.9 42.3 6.2 -5.5 Q1 11 -4.1 -0.2 12.7 4.2 1.00 1.10 1.35 Jul-10 -9.1 -0.5 5.5 1.30
2012 11.4 21,278 243 1.0 0.0 1.9 2.6 13.6 -5.5 147 1.1 2.10 2.18 5.40 1.26 1.28 -5.2 -12.7 -30.1 18.1 43.4 6.9 2.6 Q2 11 -2.6 -0.1 13.2 2.2 1.03 1.25 1.35 Aug-10 -2.1 -0.7 5.5 1.28
2013 11.4 21,785 249 1.8 0.6 3.5 3.6 13.1 -3.4 148 0.9 2.80 2.90 5.45 1.26 1.26 -3.6 -9.0 -36.5 19.0 45.0 5.1 3.6 Q3 11 -1.5 0.0 13.7 0.7 1.07 1.39 1.34 Sep-10 1.9 5.6 1.37
2014 11.5 22,416 257 2.0 1.6 3.8 3.0 12.9 -2.5 151 1.2 3.08 2.92 5.55 1.25 1.25 -3.4 -8.7 -37.6 20.2 47.0 6.3 4.4 Q4 11 -0.4 0.3 14.1 0.6 1.17 1.37 1.30 Oct-10 1.39
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FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1995-2014 | % variation
10
Greece
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
10
Real GDP growth in %
5 5 0 0 Greece Euro area World -5 1995 2000 2005 2010 -5 Greece Euro area World
-10
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
3
4 | GDP 2011 | evolution of forecasts
2
0
0
-3 Maximum Consensus Minimum Jan Mar May Jul Sep Nov
-2 Maximum Consensus Minimum Jan Mar May Jul Sep Nov
-6
-4
Individual Forecasts Alpha Bank BNP Paribas Citi Group Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING National Bank of Greece Nomura Piraeus Bank Raiffeisen Research Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) European Commission (May 2010) OECD (May 2010)
2010 -3.5 -4.0 -3.5 -4.0 -4.0 -3.9 -4.3 -4.2 -3.4 -4.0 -3.8 -4.0 -3.3 -3.8 -4.3 -3.3 -4.0 -3.8 -3.8 -3.7 -3.4 -4.0 -3.0 -3.7
2011 -1.5 -3.2 -2.3 -2.2 -2.5 -2.5 -2.7 -2.9 -1.7 -2.0 -2.2 -2.9 -1.5 -0.8 -3.2 -0.8 -2.3 -2.2 -2.1 -2.0 -1.7 -2.6 -0.5 -2.5
5 | Consumption | % variation
6
6 | Investment | % variation
20
3
10
0
0
-3 Greece Euro area -6 1995 2000 2005 2010
-10 Greece Euro area -20 1995 2000 2005 2010
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the National Statistical Service of Greece (EL.STAT.), the Eurostat and the Bank of Greece (BoG). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: Eurostat. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: Eurostat. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: Eurostat. 6 Gross fixed capital formation, annual variation in %. Source: Eurostat. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt,% of GDP. Source: EL.STAT. 10 Unemployment, % of active population. Source: EL.STAT. 11 General government balance, % of GDP. Source: BoG. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
7 | Consumption | evolution of fcst
2
8 | Investment | evolution of forecasts
6 2010 0 2011
0 -6 -2 -12 2010 2011 -4 Jan Mar May Jul Sep Nov -18 Jan Mar May Jul Sep Nov
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Real Sector | Additional forecasts
Consumption % variation 2010 2011 -0.7 -4.0 -4.0 -4.2 -3.3 -1.7 -4.6 -4.4 -3.1 -3.1 -3.8 -3.6 -4.8 -4.0 -4.8 -0.7 -3.8 -3.5 -3.3 -2.1 -2.2 -4.4 -1.7 -4.0 -3.6 -3.3 -2.5 -2.0
Greece
November 2010
Individual Forecasts Alpha Bank BNP Paribas Citi Group Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING National Bank of Greece Nomura Piraeus Bank Raiffeisen Research Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -6.8 2.6 -16.4 -13.2 -6.5 -6.8 -18.2 -2.8 -17.7 -6.0 -5.3 -0.7 -9.3 -6.5 -6.6 -10.4 -18.2 -5.3 -8.1 -10.8 -11.5 -9.1 -7.7 -13.2 2.6 -6.2 -5.5 -4.4 -2.1 -1.4
Unemployment % of active pop. 2010 2011 11.8 14.6 12.7 14.5 12.7 14.3 12.1 13.6 12.1 14.3 11.5 13.5 12.0 14.7 12.5 14.0 12.2 13.8 11.5 12.7 12.1 12.2 12.1 12.1 12.1 13.5 14.7 14.3 14.1 14.1 14.0 13.7
Fiscal Balance % of GDP 2010 2011 -7.8 -6.0 -8.2 -7.9 -8.2 -7.3 -7.9 -7.3 -8.0 -7.5 -10.6 -8.7 -8.0 -7.0 -9.5 -8.5 -9.3 -9.9 -8.5 -7.1 -8.6 -7.1 -8.0 -6.9 -8.8 -7.6 -10.6 -7.8 -8.2 -8.6 -8.5 -8.5 -8.7 -9.9 -6.0 -7.3 -7.6 -7.7 -7.5 -7.9
Public Debt % of GDP 2010 2011 134 147 130 142 130 140 125 134 133 140 130 138 145 155 131 133 133 145 125 145 131 132 131 129 130 133 155 140 141 140 138 139
9 | Public Debt | % of GDP
170 150 130 110 90 70 50 2000 2005 2010 Greece Euro area
10 | Unemployment | % of active pop.
16 Greece Euro area
11 | Fiscal Balance | % of GDP
5
0 12 -5 8 -10 Greece Euro area World 2000 2005 2010
4 1995 2000 2005 2010
-15 1995
12 | Public Debt | evolution of fcst
150 2010 2011
13 | Unemployment | evolution of fcst
15 2010 14 2011
14 | Fiscal Balance | evolution of fcst
-7 2010 2011
140
-8 13 130 12 -9 120 11
110 Jan Mar May Jul Sep Nov
10 Jan Mar May Jul Sep Nov
-10 Jan Mar May Jul Sep Nov
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FOCUSECONOMICS
Greece
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000 - 2014 | in %
6 Greece Euro area 4 4 2 2 0 Greece Euro area 0 2000 2005 2010 -2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
16 | Inflation | Q1 07-Q4 11 | in %
6
Consumer Prices and Current Account Balance
Consumer Prices Current Account var. in % EUR bn 2010 2011 2010 2011 3.8 1.2 3.0 1.6 -23.7 -20.0 5.0 3.2 -21.9 -15.9 4.5 -0.2 -23.9 -21.0 3.2 2.0 -24.3 -20.2 4.8 1.7 4.7 1.7 -19.1 -17.9 4.6 1.3 -24.3 -20.0 4.7 2.4 4.7 2.5 -22.0 -16.8 4.5 4.0 -29.0 4.3 0.5 -23.9 -17.8 3.0 5.0 4.5 4.3 4.1 4.2 3.6 4.6 3.1 3.0 -0.2 4.0 1.7 1.8 1.6 1.8 1.4 2.2 2.1 0.3 -29.0 -19.1 -23.9 -23.6 -23.6 -23.4 -23.4 -33.1 -24.1 -20.8 -21.0 -15.9 -19.0 -18.7 -18.6 -18.0 -18.0 -22.6 -19.9 -15.5
17 | Inflation 2010 | evolution of fcst
6 Maximum Consensus Minimum 4
18 | Inflation 2011 | evolution of fcst
6
4
2
2
0 Maximum Consensus Minimum Jan Mar May Jul Sep Nov
0 Jan Mar May Jul Sep Nov
-2
Individual Forecasts Alpha Bank BNP Paribas Citi Group Credit Agricole Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING National Bank of Greece Nomura Piraeus Bank Raiffeisen Research Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) Euro. Comm. (May 2010) OECD (May 2010)
19 | 10-year Rate | 1995 - 2014 | in %
16 Greece Germany 12
20 | Current Account | EUR bn
0
-10
8
-20
4
-30
0 1995 2000 2005 2010
-40 1995 2000 2005 2010
21 | Current Account | % of GDP
6
22 | Current Account | evolution of fcst
-10 2010 2011
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary sector data are from the National Statistical Service of Greece (EL.STAT.) and the Bank of Greece (BoG). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in %. Source: EL.STAT. 16 Quarterly inflation, year-on-year variation in harmonised index consumer prices (HICP) in %. Source: EL.STAT. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: BoG. 20 Current account balance in EUR bn. Source: BoG. 21 Current account balance as % of GDP. Source: BoG 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010
0
-15
-6
-20
-12 Greece Euro area 2000 2005 2010
-18 1995
-25 Jan Mar May Jul Sep Nov
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FOCUSECONOMICS
Ireland
November 2010
Ireland
Ireland
Outlook improves
• On 6 October, international credit rating agency Fitch downgraded Ireland’s rating from A+ to AA-, as the cost of the Irish banking sector bailout is expected to weigh heavily on the country’s finances going forward. Despite the downgrade, the outlook for the country improved slightly, as Consensus Forecast participants revised up their forecast by 0.1 percentage points and now see the economy to contracting 0.3% in 2010. In 2011, the economy is expected to rebound with a 1.4% expansion. Inflation stepped up from 0.2% in August to 0.5% in September. Panellists expect consumer prices to decline an average 0.9% this year, which is up 0.3 percentage points from last month’s forecast. Next year, the country should exit deflation with an average inflation rate of 0.7%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 3.9 128 32,657 6.2 1.4 33.3 4.1 -0.5 2005-09 4.7 175 36,906 1.2 -3.4 37.0 1.8 -4.1 2010-14 5.3 173 32,645 1.8 -10.8 96.4 1.0 -0.2
•
•
Armando Ciccarelli
Senior Economist
REAL SECTOR | Industrial production growth slows in August but trend continues to improve In August, industrial production dropped a seasonally adjusted 13.6% over the previous month, which contrasted the 3.8% expansion registered in July (previously reported: +3.2% month-on-month). The slowdown over the previous
Industrial Production | variation in %
30.0 MoM s.a. (left scale) 20.0 19.1 Annual average YoY (right scale) 0.0 7.8 3.3 9.2 3.7 3.8 -2.0 % -2.2 -10.0 -11.3 -20.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug -6.7 -0.7 -1.3 -4.0 -9.2 -13.6 -6.0 2.0
month was mainly the result of weaker manufacturing output, which plunged 16.4%, contrasting the 4.3% increase recorded in July. Within manufacturing, production of pharmaceuticals and electrical equipment slowed markedly over the previous month. On an annual basis, industrial production expanded 9.6% in August, which was down from the 12.8% expansion registered in July (previously reported: +12.1% year-on-year). As a result of the August reading, the trend continues to point upwards, as annual average variation in industrial production turned from minus 1.4% in July to plus 0.6% in August, marking the first positive reading in annual average industrial production since November 2008. The Central Bank sees the economy growing 0.2% this year. Next year, monetary authorities see growth picking up to 2.4%. Consensus Forecast panellists disagree with the Central Bank and anticipate the economy to contract 0.3% in 2010, which is nonetheless up 0.1 percentage points from last month’s forecast. In 2011, panellists anticipate economic growth to inch up to 1.4%, which is down 0.2 percentage points from last month’s forecast. MONETARY SECTOR | Inflation remains in positive territory for a second consecutive month In September, consumer prices dropped 0.1% over the previous month, which contrasted the 0.7% increase recorded in August. The main drivers behind the
10.0 % 0.0
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: Central Statistics Office Ireland (CSO) and FocusEconomics calculations.
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FOCUSECONOMICS
Ireland
November 2010
Inflation | Consumer Price Index
1.0 monthly (left scale) annual (right scale) 0.5 % 0.0 -0.2 -0.5 -0.4 -0.5 0.0 0.4 0.1 0.2 0.0 -0.1 -0.1 -3.0 % -6.0 -0.6 -9.0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 0.6 0.7 0.0 3.0
monthly price decrease were lower prices for transport, which, according to the Central Statistical Office (CSO), were due to a reduction in airfares. Despite the monthly price fall, annual inflation stepped up from 0.2% in August to 0.5% in September, marking the second consecutive month with inflation in positive territory since December 2008. Meanwhile, annual harmonised inflation (based on the harmonised index of consumer prices - HICP) stepped up from minus 1.2% in August to 1.0%. In the October Quarterly Bulletin, the Central Bank stated that it expects inflation to average minus 1.4% this year and to rebound to 1.1% next year. Consensus Forecast panellists see the country reverting to deflation this year and anticipate consumer prices to decrease an average 0.9%, which is up 0.3 percentage points over last month’s forecast. For 2011, the panel expects the country to leave deflation, with prices increasing an average 0.7%, unchanged from last month forecast.
-1.0
Note: Monthly and annual consumer price index variation in %. Source: Central Statistics OfficeIreland (CSO) and FocusEconomics calculations.
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FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop% of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (HICP, annual variation in %) Inflation (HICP, ann. avg. var in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (var. of ISEQ in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) Inflation (HICP, ann. avg. var in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Unemployment (% of active population) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 4.3 37,402 162 6.0 6.9 14.9 4.0 4.4 1.6 27.4 1.9 2.2 2.25 2.49 3.27 18.8 1.18 1.24 -3.5 -5.7 28.2 82.7 54.5 2.7 10.9 Q3 09 -7.4 -0.3 -2.6 1.00 0.75 4.67 1.46 Jan-10 1.2 13.4 -0.6 -3.9 1.39 2006 4.7 37,621 177 5.3 6.7 4.6 3.1 4.4 3.0 24.9 3.0 2.7 3.50 3.73 3.95 27.8 1.32 1.26 -3.6 -6.3 25.0 83.2 58.2 0.7 6.9 Q4 09 -5.8 -2.5 -2.8 1.00 0.70 4.94 1.43 Feb-10 2.7 13.4 0.4 -3.2 1.36
Ireland
November 2010
2007 4.8 39,576 190 5.6 6.4 2.8 5.2 4.6 0.1 25.0 3.2 2.9 4.00 4.68 4.50 -26.3 1.46 1.37 -5.3 -10.1 19.8 84.1 64.3 1.0 10.4 Q1 10 -0.8 2.2 -2.4 1.00 0.63 4.53 1.35 Mar-10 4.0 13.4 0.1 -3.1 1.35
2008 4.9 37,169 182 -3.5 -1.5 -14.3 -2.2 6.3 -7.3 43.9 1.3 3.1 2.50 2.89 4.57 -66.2 1.39 1.47 -5.2 -9.4 23.8 81.5 57.7 -3.1 -10.3 Q2 10 -1.8 -1.2 -2.1 1.00 0.77 5.50 1.22 Apr-10 -4.1 13.4 0.2 -2.1 1.32
2009 5.0 32,764 164 -7.6 -7.0 -31.0 -4.5 11.8 -14.3 64.0 -2.6 -1.7 1.00 0.70 4.94 27.0 1.43 1.39 -2.9 -4.8 32.6 78.0 45.3 -4.3 -21.4 Q3 10 0.9 0.5 -1.2 1.00 0.89 5.25 1.37 May-10 6.6 13.7 0.6 -1.1 1.23
2010 5.1 31,721 162 -0.3 -0.9 -17.0 -2.1 13.7 -19.3 83.4 -0.9 1.00 0.97 4.10 1.33 1.38 -0.5 -0.9 34.7 80.3 45.6 3.0 0.7 Q4 10 0.5 -0.2 -0.8 1.00 0.97 4.10 1.33 Jun-10 8.4 13.4 -0.1 -0.9 1.22
2011 5.2 31,741 165 1.4 1.1 0.5 0.8 13.6 -13.6 98.6 0.7 1.17 1.37 4.57 1.30 1.31 0.1 0.2 36.2 82.9 46.7 3.3 2.4 Q1 11 1.1 0.2 -0.1 1.00 1.10 4.21 1.35 Jul-10 12.8 13.7 0.0 -0.1 1.30
2012 5.3 32,352 171 2.4 2.1 2.8 4.2 12.1 -7.9 98.6 1.4 2.10 2.18 5.62 1.26 1.28 0.6 0.9 37.5 85.9 48.7 3.6 4.1 Q2 11 1.5 0.3 0.4 1.03 1.25 4.33 1.35 Aug-10 9.6 13.8 0.7 0.2 1.28
2013 5.4 33,200 179 2.8 2.4 4.0 4.6 11.3 -7.1 99.2 1.7 2.80 2.90 6.25 1.26 1.26 -0.5 -1.0 39.4 88.6 50.1 3.1 3.0 Q3 11 2.0 0.3 0.6 1.07 1.39 4.45 1.34 Sep-10 13.7 -0.1 0.5 1.37
2014 5.5 34,209 188 3.0 2.8 3.4 4.9 10.7 -6.1 102.2 1.9 3.08 2.92 6.47 1.25 1.25 -0.5 -0.9 42.1 90.4 52.1 2.1 3.9 Q4 11 1.0 0.3 0.9 1.17 1.37 4.57 1.30 Oct-10 1.39
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Real Sector | Gross Domestic Product
1 | Real GDP | 1990 - 2014 | % variation
15 Ireland Euro area World
Ireland
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
10 Ireland Euro area World 5
Real GDP growth in %
10
5 0 0 -5
-5
-10 1995 2000 2005 2010
-10 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
2
4 | GDP 2011 | evolution of forecasts
4
0
2
-2
0
Individual Forecasts Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING Nomura Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) European Commission (May 2010) Central Bank (Oct. 2010)
2010 0.5 -0.5 -0.5 -1.6 0.6 -1.0 -0.4 -0.3 0.4 -1.6 0.6 -0.4 -0.3 -0.4 -0.4 -0.3 -0.3 -0.9 0.2
2011 1.5 1.2 1.2 -0.9 2.7 1.2 2.1 0.5 3.0 -0.9 3.0 1.2 1.4 1.6 1.8 1.9 2.3 3.0 2.4
-4
Maximum Consensus Minimum
-2
Maximum Consensus Minimum
-6 Jan Mar May Jul Sep Nov
Jan
Mar
May
Jul
Sep
Nov
5 | Consumption | % variation
15
6 | Investment | % variation
20
10 0 5
0 -20 -5 Ireland Euro area -10 1995 2000 2005 2010 -40 1995 2000 2005 2010 Ireland Euro area
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Central Statistics Office Ireland (CSO) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: CSO. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: CSO. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: CSO. 6 Gross fixed capital formation, annual variation in %. Source: CSO. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt, % of GDP. 2000-2014 Source: CSO. 10 Unemployment, % of active population. Source: CSO. 11 General government balance, % of GDP. Source: Eurostat. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
7 | Consumption | evolution of fcst
2
8 | Investment | evolution of forecasts
10 2010 2011
0
0
-2 2010 2011 -4 Jan Mar May Jul Sep Nov
-10
-20 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
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FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 -1.1 0.7 0.0 1.6 -1.5 1.0 -1.5 0.0 -1.1 -0.9 -1.2 -1.8 -1.8 0.7 1.6 1.0 1.1 0.9 1.8 1.8
Ireland
November 2010
Individual Forecasts Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING Nomura Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -19.1 -3.4 -19.9 2.0 -12.0 3.0 -19.9 -12.0 -19.1 -17.0 -18.3 -14.1 -14.1 -3.4 3.0 2.0 0.5 0.7 1.0 1.0
Unemployment % of active pop. 2010 2011 13.5 13.2 13.7 13.0 13.6 14.7 14.0 13.5 14.0 13.6 13.7 13.7 13.7 13.7 13.0 14.7 13.2 13.6 13.5 13.8 13.8
Fiscal Balance % of GDP 2010 2011 -11.8 -10.0 -14.3 -13.5 -29.2 -9.8 -32.0 -14.0 -11.5 -9.7 -11.9 -10.4 -32.0 -31.3 -12.0 -10.0 -32.0 -11.5 -13.2 -19.3 -13.0 -12.7 -12.0 -31.3 -9.7 -10.2 -13.6 -10.8 -10.0 -9.4
Public Debt % of GDP 2010 2011 77.3 87.3 65.5 98.5 98.0 108.0 98.0 111.0 78.0 88.0 65.5 98.0 78.0 83.4 79.3 78.7 77.6 87.3 111.0 98.5 98.6 88.8 86.7 85.1
9 | Public Debt | % variation
120 Ireland Euro area
10 | Unemployment | % of active pop.
16 Ireland Euro area 12
11 | Fiscal Balance | % of GDP
5
100
0
80 8 60 4
-5
-10
40
-15
20 2000 2005 2010
0 1995 2000 2005 2010
-20 1995
Ireland Euro area World 2000 2005 2010
12 | Public Debt | evolution of fcst
100 2010 90 2011
13 | Unemployment | evolution of fcst
16 2010 14 2011
14 | Fiscal Balance | evolution of fcst
-5 2010 2011
-10 12
80 10
-15
70 Jan Mar May Jul Sep Nov
8 Jan Mar May Jul Sep Nov
-20 Jan Mar May Jul Sep Nov
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FOCUSECONOMICS
Ireland
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000- 2014 | in %
6
16 | Inflation | Q1 07-Q4 11 | in %
4
Consumer Prices and Current Account Balance
Consumer Prices Current Account var. in % EUR bn 2010 2011 2010 2011 1.4 0.7 -1.5 -1.0 -1.6 0.4 -1.4 -1.0 -1.5 0.5 -1.6 0.0 -1.6 0.7 -1.3 0.7 0.2 3.2 -1.0 0.8 -1.5 1.5 -1.6 0.0 0.0 0.4 0.8 0.2 -1.6 1.4 -1.4 -0.9 -1.2 -1.2 -1.2 -1.6 -1.3 -1.2 0.4 1.5 0.7 0.7 0.7 0.6 0.5 -0.5 0.8 1.2 -1.6 0.8 -1.5 -0.9 -1.0 -0.9 -0.9 -1.0 3.2 0.0 0.2 0.1 -0.3 -0.3 -
4
2
2 0 0 -2 Ireland -4 2000 Euro area 2005 2010 -4 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Ireland Euro area
-2
17 | Inflation 2010 | evolution of fcst
2 Maximum Consensus Minimum 0
18 | Inflation 2011 | evolution of fcst
2 Maximum Consensus Minimum 1
Individual Forecasts Credit Suisse DekaBank Deutsche Bank DZ Bank Experian ING Nomura Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) Euro. Comm. (May 2010) Central Bank (July 2010)
-2
0
-4 Jan Mar May Jul Sep Nov
-1 Jan Mar May Jul Sep Nov
19 | 10-year Rate | 2000 - 2014 | in %
8 Ireland Germany
20 | Current Account | EUR bn
5
0
6
-5
4
-10
2 1995 2000 2005 2010
-15 1995 2000 2005 2010
Notes and sources
21 | Stock Market | ISEQ
8,000
22 | Current Account | evolution of fcst
1 2010 0 2011
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Central Statistics Office Ireland (CSO) and European Central Bank (ECB). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % 2000-2014. Source: CSO. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer prices (HICP) in %. Source: CSO. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: CSO, ECB. 20 Current account balance in EUR bn. Source: CSO. 21 Monthly index levels, ISEQ Index. Jan. 2008 until end of previous month. Source: Irish Stock Exchange. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
6,000
-1
4,000
-2
2,000 Jan Jul Jan Jul Jan Jul
-3 Jan Apr Jul Oct
FocusEconomics Consensus Forecast
| 81
FOCUSECONOMICS
Netherlands
November 2010
Netherlands
Netherlands
Outlook improves
• In August, the country continued to benefit from strong growth in the industrial sector, with output expanding 7.3% annually. Moreover, additional data confirm the healthy state of the economy, with unemployment at the lowest level in over a year. Consensus Forecast participants lifted their 2010 growth forecast by 0.1 percentage points over last month and expect the economy to expand 1.9% this year. In 2011, economic growth is likely to remain moderate, with projections at 1.7%. Inflation rose a notch from 1.5% in August to 1.6% in September. Panellists expect inflation to average 1.0% this year, which is unchanged over last month’s projection. Next year, inflation should rise to 1.3%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 16.2 460 28,427 1.7 -1.1 51.9 3.0 4.0 2005-09 16.4 559 34,036 1.5 -0.8 52.8 1.6 6.8 2010-14 16.6 629 37,813 1.9 -4.2 68.6 1.4 5.8
•
•
Ricardo Aceves
Economist
REAL SECTOR | Industrial output rebounds in August In August, industrial production expanded 0.3% over the previous month in seasonally adjusted terms, contrasting the revised 0.2% drop observed in July (previously reported: -0.4% month-on-month). August’s expansion was mainly driven by a stronger dynamism in all the main categories of industrial production. Manufacturing, which accounts for the bulk of industrial production, grew 0.7% over the previous month (July: +0.1% monthon-month). In addition, mining and quarrying accelerated over July and increased 3.4% (July: +0.5% mom). Finally, utilities bounced back and expanded 3.0%, contrasting the 6.6% contraction recorded in July. On an annual basis, industrial production expanded 7.3%, which was up from the 2.8% increase registered in July. As a result of the August reading, the trend resumed its upward course, with the annual average growth in industrial production jumping from 2.4% in July to 4.0%. Consensus Forecast panellists see industrial production rising 6.8% this year. Meanwhile, the Central Bank expects the economy to grow 1.2% this year. Next year, monetary authorities see growth picking up to 1.9%. Consensus Forecast panellists expect the economy to grow 1.9% in 2010, which is up 0.1 percentage points from last month’s forecast. In 2011, panellists anticipate economic growth to slow to 1.7%. MONETARY SECTOR | Inflation rises in September In September, consumer prices added 0.6% over the previous month. The reading came in above the 0.2% increase registered in August, but was virtually in line with market expectations. The monthly increase mainly reflected
Industrial Production | variation in %
4.0 MoM s.a. Annual average YoY 2.0 0.5 0.0 -0.1 % -2.0 -2.5 -4.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug -2.7 -10.0 -0.2 0.8 0.6 1.9 2.7 2.1 1.9 0.0 0.4 0.3 % -5.0 5.0
Note: Month-on-month changes of seasonally adjusted industrial production and annual average growth rate in %. Source: Statistics Netherlands and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 82
FOCUSECONOMICS
Inflation | Consumer Price Index
1.5 monthly (left scale) annual (right scale) 1.0 0.7 0.5 0.5 % 0.0 -0.1 -0.5 -0.6 -1.0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 0.0 0.0 -0.3 -0.5 0.0 0.1 0.3 0.2 1.0 % 0.5 0.6 1.5 1.2 2.0
Netherlands
November 2010
higher prices for clothing and footwear (+11.9% month-on-month), as well as for communications (+1.4% mom). As a result of the monthly increase, annual inflation stepped up from 1.5% in August to 1.6% in September, driving annual average inflation up from 1.0% in August to 1.1%. Moreover, annual average harmonised inflation (based on the harmonised index of consumer prices – HICP) rose from 0.6% in August to 0.7% in September. According to the June Economic Outlook report, the Central Bank expects harmonised inflation to average 1.0% this year and to accelerate to 1.6% next year. Consensus Forecast panellists anticipate inflation to average 1.0% this year, which is unchanged over last month’s forecast. For 2011, the panel expects inflation to reach 1.3%.
Note: Monthly and annual consumer price index variation in %. Source: Statistics Netherlands and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 83
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual variation in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (aop% of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (Core, annual average variation in %) HICP (annual variation in %) HICP (annual average variation in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Stock Market (var. of AEX in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Economic Growth (GDP, qoq variation in %) HICP (annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Monthly Data Industrial Production (annual variation in %) Unemployment (eop % of active population) Consumer Confidence Index Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 16.3 31,432 513 2.0 1.4 1.0 0.5 3.7 0.4 6.5 -0.3 51.8 6.6 2.0 1.5 6.6 2.25 2.49 3.35 29.6 1.18 1.24 7.2 37.0 39.2 280 240 10.1 9.0 Q3 09 -3.7 0.6 1.3 1.00 0.75 3.58 Jan-10 3.7 5.7 -10.0 0.0 0.8 1.39 2006 16.4 33,025 540 3.4 3.9 -0.3 9.5 7.5 1.5 5.5 0.5 47.4 2.9 1.7 1.7 2.9 3.50 3.73 3.81 18.3 1.32 1.26 9.0 48.5 39.9 314 274 12.2 13.9 Q4 09 -2.2 0.6 1.0 1.00 0.70 3.44 Feb-10 6.2 5.8 -13.0 0.7 0.8 1.36
Netherlands
November 2010
2007 16.4 34,854 572 3.9 3.1 1.8 3.5 5.5 2.2 4.5 0.2 45.5 8.6 1.6 1.6 8.6 4.00 4.68 4.34 8.0 1.46 1.37 8.3 47.2 43.8 341 297 8.8 8.6 Q1 10 0.6 0.5 0.6 1.00 0.63 3.37 Mar-10 11.5 5.7 -12.0 1.2 1.0 1.35
2008 16.5 36,166 596 1.9 2.4 1.1 2.5 5.1 1.5 3.9 0.7 58.2 -6.4 1.7 2.2 -6.4 2.50 2.89 3.65 -51.5 1.39 1.47 4.6 27.2 40.1 364 324 6.8 9.1 Q2 10 2.2 1.0 0.4 1.00 0.77 2.90 Apr-10 11.7 5.6 -15.0 0.3 1.1 1.32
2009 16.5 34,705 572 -3.9 -3.1 -2.5 -12.7 -7.4 4.9 -5.3 60.9 0.9 0.7 1.0 0.9 1.00 0.70 3.44 32.8 1.43 1.39 5.0 28.4 35.5 302 267 -17.0 -17.7 Q3 10 2.3 0.4 0.7 1.00 0.89 2.52 May-10 10.3 5.6 -16.0 0.0 1.0 1.23
2010 16.5 35,591 589 1.9 1.7 0.5 -3.2 6.8 5.5 -6.1 65.2 1.0 1.00 0.97 2.58 1.33 1.38 6.0 35.6 34.4 340 305 12.4 14.1 Q4 10 2.1 0.4 1.3 1.00 0.97 2.58 Jun-10 8.8 5.5 -18.0 -0.5 0.8 1.22
2011 16.6 36,558 606 1.7 1.6 1.0 3.7 2.6 5.3 -4.6 68.3 1.3 1.17 1.37 3.34 1.30 1.31 5.7 34.6 35.2 361 324 6.2 6.3 Q1 11 1.7 0.2 1.4 1.00 1.10 2.60 Jul-10 2.8 5.5 -14.0 -0.3 1.6 1.30
2012 16.6 37,729 628 1.8 1.3 1.3 2.8 2.4 4.9 -3.9 69.3 1.7 2.10 2.18 3.44 1.26 1.28 5.5 34.7 41.5 389 348 7.8 7.4 Q2 11 1.3 0.4 1.0 1.03 1.25 2.83 Aug-10 7.3 5.3 -11.0 0.2 1.5 1.28
2013 16.7 38,951 650 2.0 1.6 1.6 3.1 2.8 4.7 -3.3 69.6 1.5 2.80 2.90 3.77 1.26 1.26 5.8 37.9 47.1 415 366 6.7 5.3 Q3 11 1.4 0.4 1.5 1.07 1.39 3.08 Sep-10 5.3 -14.0 0.6 1.6 1.37
2014 16.7 40,237 673 2.0 1.9 1.7 3.3 2.9 4.6 -3.0 70.6 1.6 3.08 2.92 3.93 1.25 1.25 5.7 38.6 53.2 436 383 5.0 4.5 Q4 11 1.4 0.4 1.4 1.17 1.37 3.34 Oct-10 -10.0 1.39
FocusEconomics Consensus Forecast
| 84
FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1995 - 2014 | % variation
6
Netherlands
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
10 Netherlands Euro area World
Real GDP growth in %
3
5
0
0
-3 Netherlands Euro area World -6 1995 2000 2005 2010
-5
-10 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
3 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
4 Maximum Consensus Minimum
3
2
2
1
1
0 Jan Mar May Jul Sep Nov
0 Jan Mar May Jul Sep Nov
Individual Forecasts ABN AMRO Bank Barclays Citigroup Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING NIBC Bank Nomura Rabobank Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) European Commission (Sep. 2010) Central Bank (June 2010)
2010 1.9 1.9 2.4 2.4 1.9 1.8 2.1 1.9 2.0 1.7 1.7 1.9 1.8 1.8 1.9 1.7 2.1 1.8 1.9 1.8 1.7 1.6 1.8 1.3 1.2
2011 1.3 2.1 1.9 3.1 1.3 1.2 1.5 2.0 2.0 1.4 1.1 1.8 1.5 1.4 1.7 1.1 2.0 1.5 1.7 1.7 1.7 1.9 1.7 1.9 1.9
5 | Consumption | variation in %
10 Netherlands Euro area 5
6 | Investment | variation in %
10
0
0
-10 Netherlands Euro area
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Netherlands (CBS, Centraal Bureau voor de Statistiek), the Central Bank (DNB, De Nederlandsche Bank) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: CBS. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: CBS. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: CBS. 6 Gross fixed capital formation, annual variation in %. Source: CBS. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt, % of GDP. 2000-2014 Source: Eurostat. 10 Unemployment, % of active population. Source: DNB. 11 General government balance, % of GDP. Source: Eurostat. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
-5 1995 2000 2005 2010
-20 1995 2000 2005 2010
7 | Consumption | evolution of fcst
3 2010 2011 2
8 | Investment | evolution of forecasts
5
0 1 -5 0 2010 -1 Jan Mar May Jul Sep Nov -10 Jan Mar May Jul Sep Nov 2011
FocusEconomics Consensus Forecast
| 85
FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 0.3 0.8 0.4 1.5 0.8 1.3 0.3 0.9 0.3 1.0 0.2 0.8 0.5 0.5 0.9 1.5 0.2 0.9 0.4 0.5 0.6 0.9 0.9 0.5 1.5 1.0 1.0 1.1 1.3 1.1
Netherlands
November 2010
Individual Forecasts ABN AMRO Bank Barclays Citigroup Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING NIBC Bank Nomura Rabobank Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -3.2 3.8 -3.2 2.6 -3.6 2.3 -3.5 2.6 -2.6 4.5 -2.2 3.8 -5.0 2.8 -2.0 7.3 -5.0 -2.0 -3.2 -3.2 -3.3 -4.5 -5.7 2.3 7.3 2.8 3.7 3.9 3.6 3.3
Unemployment % of active pop. 2010 2011 5.5 5.1 5.5 5.3 5.5 5.0 5.5 5.3 5.5 5.5 5.7 5.3 5.5 5.7 5.5 5.5 5.6 5.6 5.6 5.0 5.5 5.3 5.3 5.5 5.5 5.5
Fiscal Balance % of GDP 2010 2011 -5.8 -3.8 -5.3 -3.2 -6.3 -4.0 -6.8 -5.7 -5.8 -4.8 -5.9 -5.1 -6.0 -5.0 -5.6 -4.1 -6.7 -5.2 -5.9 -4.2 -6.0 -4.5 -6.3 -5.1 -6.3 -5.1 -6.7 -5.6 -6.0 -6.1 -6.1 -6.2 -6.0 -5.2 -4.1 -5.0 -4.6 -4.7 -4.8 -4.6
Public Debt % of GDP 2010 2011 64.7 66.8 66.3 69.6 60.8 63.5 66.2 69.7 66.0 69.0 66.3 69.6 66.3 69.6 60.8 66.3 66.2 65.2 65.7 65.9 65.2 63.5 69.7 69.6 68.3 68.8 68.8 68.0
9 | Public Debt | variation in %
100 Netherlands Euro area 80
10 | Unemployment | % of active pop.
12
11 | Fiscal Balance | % of GDP
5
8
0
60
4 Netherlands Euro area
-5 Netherlands Euro area World -10 2000 2005 2010 1995 2000 2005 2010
40 2000 2005 2010
0 1995
12 | Public Debt | evolution of fcst
72
13 | Unemployment | evolution of fcst
5.8
14 | Fiscal Balance | evolution of fcst
-4 2010 2011
69 5.6 66 5.4 63 2010 60 Jan Mar May Jul Sep Nov 2011 5.2 Jan Mar May Jul Sep Nov 2010 2011 -7 Jan Mar May Jul Sep Nov -6 -5
FocusEconomics Consensus Forecast
| 86
FOCUSECONOMICS
Netherlands
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000 - 2014 | in %
6 Netherlands Euro area 4 2 3
16 | Inflation | Q1 07-Q4 11 | in %
4
Consumer Prices and Current Account Balance
Consumer Prices Current Account var. in % EUR bn 2010 2011 2010 2011 29.5 32.5 41.8 41.2 1.4 1.4 34.7 38.8 0.8 1.6 34.6 38.6 0.9 1.5 26.4 27.1 0.9 1.3 1.0 1.3 39.4 36.4 0.9 1.2 32.4 34.0 0.9 1.0 39.0 34.0 0.9 1.8 1.3 1.0 0.8 1.6 38.1 30.2 0.9 1.0 39.5 33.2 0.8 1.3 0.9 1.0 1.0 1.1 1.1 1.3 1.3 1.0 1.0 1.8 1.3 1.3 1.4 1.5 1.4 1.1 1.1 1.6 26.4 39.5 38.6 35.6 34.9 37.8 37.4 27.1 36.4 33.6 34.6 34.4 38.1 38.2 -
1 2 0 Netherlands Euro area 0 2000 2005 2010 -1 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
2.0 Maximum Consensus Minimum 1.5
18 | Inflation 2011 | evolution of fcst
3 Maximum Consensus Minimum 2
1.0
1
0.5
0.0 Jan Mar May Jul Sep Nov
0 Jan Mar May Jul Sep Nov
Individual Forecasts ABN AMRO Bank Barclays Citigroup Credit Suisse DekaBank Deutsche Bank DZ Bank Experian Goldman Sachs ING NIBC Bank Nomura Rabobank Raiffeisen Research UBS Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF(Oct. 2010) Euro. Comm. (Sep. 2010) Central Bank (June 2010)
19 | 10-year Rate | 1995 - 2014 | in %
8 Netherlands Germany
20 | Current Account | EUR bn
50
40
6
30
20
4
10
2 1995 2000 2005 2010
0 1995 2000 2005 2010
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Netherlands (CBS, Centraal Bureau voor de Statistiek), the Central Bank (DNB, De Nederlandsche Bank) and the German Central Bank (BBK, Deutsche Bundesbank). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % 2000-2014. Source: CBS. 16 Quarterly inflation, year-on-year variation in harmonised index of consumer prices (HICP) in %. Source: CBS. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: DNB, BBK. 20 Current account balance in EUR bn. Source: CBS. 21 Monthly index levels, AEX Index. Jan. 2008 until end of previous month. Source: Amsterdam Stock Exchange. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
21 | Stock Market | AEX
500
22 | Current Account | evolution of fcst
40 2010 2011
400
35
300
30
200 Jan Jul Jan Jul Jan Jul
25 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 87
FOCUSECONOMICS
Portugal
November 2010
Portugal
Portugal
Outlook improves
• Government and opposition reached an agreement on the draft budget for 2011 after bond markets reacted nervously to the political stalemate, pushing borrowing costs to a temporary high on 29 October. Meanwhile, industrial production continued to recover in August, exiting negative territory for the first time in two years. Consensus Forecast panellists expect the economy to expand 1.3% this year, which is up 0.3 percentage points from last month’s estimate. In 2011, GDP is likely to contract 0.1%. In September, inflation remained unchanged at August’s 2.0%, which represents the highest level since October 2008. Consensus Forecast panellists expect inflation to average 1.2% this year, which is unchanged from last month’s forecast. For 2011, panellists expect inflation to average 1.4%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): 2000-04 10.4 139 13,360 1.4 -3.3 54.8 3.3 -8.0 2005-09 10.6 164 15,520 0.4 -5.0 66.3 1.9 -9.9 2010-14 10.8 179 16,652 1.1 -5.1 90.5 1.4 -8.1
•
Public Debt (% of GDP):
Inflation (%): Current Account (% of GDP):
•
Marcos Felipe Casarin
Economist
FISCAL SECTOR | Government and opposition reach agreement on 2011 budget On 29 October, only days after the main opposition Social Democratic Party (PSD) had walked away from budget talks, government and opposition reached an agreement in order to allow the 2011 budget to pass through parliament. The government needs the support of the PSD to pass the budget, as it lacks a majority in Congress.
10-year bond yields | in %
7.0
Germany Portugal
6.0
5.0
%
4.0
Finance Minister Fernando Teixeira dos Santos proposed a budget with a mix of spending cuts and tax increases, including an unpopular two percentage point hike in the VAT to 23% next year, whereas the opposition PSD insists on more drastic spending cuts in order to avoid tax increases. The current budget draft aims at cutting the fiscal deficit to 4.6% of GDP in 2011, down from an estimated 7.3% of GDP this year. In 2009, the fiscal deficit reached 9.3% of GDP. The government plans to further cut the public sector deficit to 2.8% of GDP in 2013. The full details of the compromise have not yet been published. Previously, Teixeira dos Santos had said that he would not agree on a compromise with the PSD that fails to meet the government’s deficit goal, as any overshooting of the target “would only make an already delicate situation in financial markets significantly worse”. The agreement now reached excluded some items from a hike in the VAT, reducing the tax take. Teixeira dos Santos said those lower revenues would still have to be compensated by income from other sources before the budget is signed into law. Markets had reacted nervously to the stalemate between the government and PSD and pushed the yield spread between Portuguese and German 10-year benchmark bonds to the highest level since 15 October. Following the agreement the yield spread narrowed 6 basis points to 337 basis points.
3.0
2.0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Note: Harmonised long-term interest rates for convergence assessment purposes. Percentages per annum, period averages, secondary market yields of government bonds with maturities of close to ten years. Source: Eurostat.
FocusEconomics Consensus Forecast
| 88
FOCUSECONOMICS
Portugal
November 2010
Consensus Forecast panellists are more pessimistic than the government and see the fiscal deficit narrowing only to 6.0% of GDP in 2011. REAL SECTOR | Industrial production grows moderately despite monthly surge
Industrial Production | variation in %
8.0 5.20 4.0 % 0.0 -1.82 -2.03 -3.92 1.40 0.89 -0.08 -2.47 1.47 0.0 4.99 3.91 -3.0
MoM s.a. (left scale) Annual Average (right scale)
In August, industrial production surged a seasonally and calendar-day adjusted 3.91% over the previous month, which contrasted the 1.01% drop recorded in July. The monthly expansion was driven by a jump in durable consumer goods production (August: +23.42% month-on-month), which was partially offset by a drop in energy production (August: -1.16% mom). On an annual basis, however, industrial output decelerated for the third consecutive month in August moderating to 0.2% growth, down from a 1.5% expansion seen in July. Nevertheless, the trend continues to point upwards, with annual average variation improving from minus 0.4% in July to 0.0% in August. Consensus Forecast panellists see industrial production expanding 1.4% this year, which is unchanged from last month’s forecast. For 2011, the panel anticipates industrial output to expand 1.1%. Moreover, Consensus Forecast panellists see the overall economy adding 1.3% this year, which is up 0.3 percentage points from last month’s forecast. For 2011, the panel anticipates GDP to decline 0.1%. MONETARY SECTOR | Inflation remains unchanged in September
% -0.74 -1.01 -6.0
-4.0
-8.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
-9.0
Note: Month-on-month (seasonally adjusted) and annual average var. in %. Source: Statistics Portugal (INE) and FocusEconomics calculations.
Inflation | Consumer Price Index
1.5 Monthly (left scale) 1.0 Annual (right scale) 1.1 2.0 3.0
0.5 % 0.0 0.2 0.1 0.2 0.1 0.1
0.4 0.2 0.2 0.1 0.2
1.0 % 0.0 -0.2
In September, consumer prices rose 0.2% over the previous month, which contrasted the 0.2% drop recorded in August. The monthly price increase mainly reflected higher prices for clothing and footwear (+11.5% month-on-month), owing to the end of seasonal sales. That said, the jump in clothing prices was partially offset by moderate price decreases across five of the 12 remaining categories. Despite the price rise recorded in September, annual inflation remained unchanged at August’s 2.0% rate, the highest level since October 2008. Meanwhile, annual core inflation, which does not include prices for unprocessed food and energy, fell to 0.6% in September, down from 0.8% in August. Finally, annual average harmonised inflation (HICP) increased for the seventh consecutive month, rising from 0.3% in August to 0.6% in September. Consensus Forecast panellists expect harmonised inflation to average 1.2% this year, which is unchanged from last month’s forecast. For 2011, panellists expect inflation to average 1.4%.
-0.5
-0.5
-1.0
-1.0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
-2.0
Note: Monthly and annual consumer price index variation in %. Source: Statistics Portugal (INE) and FocusEconomics calculations.
FocusEconomics Consensus Forecast
| 89
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Domestic Demand (annual var. in %) Total Consumption (annual var. in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual var. in %) Industrial Production (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (CPI, annual variation in %) Inflation (CPI, annual average in %) HICP (annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) Quarterly Data Economic Growth (GDP, annual var. in %) Inflation (CPI, annual average in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 10.6 14,600 154 0.8 1.4 2.1 1.6 3.3 -0.5 -3.0 7.6 -5.9 63.6 2.6 2.3 2.1 2.25 2.49 3.46 1.18 1.24 -9.1 -14.0 -19.8 31.6 51.4 6.1 15.3 Q3 09 -2.3 -1.6 1.00 0.75 1.46 Jan-10 3.8 -0.5 0.1 1.39 2006 10.6 15,100 160 1.4 0.8 1.2 1.8 -0.7 -1.3 3.1 7.7 -4.1 63.9 2.5 3.1 3.0 3.50 3.73 3.96 1.32 1.26 -9.6 -15.4 -20.7 35.6 56.3 12.8 9.6 Q4 09 -1.0 -0.7 1.00 0.70 1.43 Feb-10 3.2 0.1 0.2 1.36
Portugal
November 2010
2007 10.6 15,900 169 2.4 2.0 2.1 2.4 0.5 2.6 0.0 8.0 -2.8 62.7 2.7 2.5 2.4 4.00 4.68 4.47 1.46 1.37 -9.0 -15.2 -21.6 38.3 59.9 7.5 6.5 Q1 10 1.8 0.3 1.00 0.63 1.35 Mar-10 4.5 1.1 0.5 1.35
2008 10.6 16,200 172 0.0 1.2 1.6 1.8 0.8 -1.8 -4.1 7.6 -3.0 65.3 0.8 2.6 2.7 2.50 2.89 4.00 1.39 1.47 -11.6 -20.0 -25.2 39.0 64.2 1.7 7.1 Q2 10 1.5 1.0 1.00 0.77 1.22 Apr-10 0.6 0.4 0.7 1.32
2009 10.6 15,800 168 -2.6 -3.0 -0.1 -1.0 2.9 -11.9 -8.1 9.5 -9.3 76.1 -0.1 -0.9 -0.9 1.00 0.70 3.91 1.43 1.39 -10.0 -16.8 -19.6 31.6 51.2 -18.7 -20.2 Q3 10 1.1 0.6 1.00 0.89 1.37 May-10 3.7 0.2 1.1 1.23
2010 10.7 16,094 172 1.3 0.7 1.5 -3.9 1.4 10.9 -7.7 83.2 1.2 1.00 0.97 5.32 1.33 1.38 -9.6 -16.5 -16.3 32.6 52.2 3.0 2.0 Q4 10 1.3 2.9 1.00 0.97 1.33 Jun-10 3.4 0.2 1.2 1.22
2011 10.7 16,250 174 -0.1 -1.4 -0.4 -2.6 1.1 11.2 -6.0 88.7 1.4 1.17 1.37 4.95 1.30 1.31 -8.5 -14.9 -14.2 34.2 54.3 5.0 4.0 Q1 11 0.2 1.4 1.00 1.10 1.35 Jul-10 1.5 0.1 1.9 1.30
2012 10.8 16,537 178 1.0 0.7 0.5 2.1 1.7 10.8 -4.4 91.7 1.1 2.10 2.18 5.10 1.26 1.28 -7.9 -14.0 -3.5 36.1 56.5 5.5 4.1 Q2 11 0.0 1.4 1.03 1.25 1.35 Aug-10 0.2 -0.2 2.0 1.28
2013 10.8 16,954 183 1.5 1.8 1.3 2.9 1.8 10.5 -3.6 93.6 1.5 2.80 2.90 5.15 1.26 1.26 -7.6 -14.0 7.9 38.8 58.5 7.4 3.4 Q3 11 0.0 1.3 1.07 1.39 1.34 Sep-10 0.2 2.0 1.37
2014 10.9 17,428 189 1.6 2.0 1.5 3.0 1.7 10.1 -3.7 95.4 1.6 3.08 2.92 4.90 1.25 1.25 -7.0 -13.2 9.7 41.7 61.4 7.6 5.1 Q4 11 -0.7 1.4 1.17 1.37 1.30 Oct-10 1.39
FocusEconomics Consensus Forecast
| 90
FOCUSECONOMICS
Real Sector | Gross Domestic Product
1 | Real GDP | 1995 - 2014 | % variation
6
Portugal
November 2010
2 | Real GDP | Q1 07-Q4 11 | % variation
6
Real GDP growth in %
3
3
0
0
-3 Portugal Euro area World 2000 2005 2010
-3 Portugal Euro area World
-6 1995
-6
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
3 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
2
2
1
1
0
0
-1
Maximum Consensus Minimum Jan Mar May Jul Sep Nov
Individual Forecasts Banco BPI BBVA BNP Paribas Credit Suisse Deka Bank Deutsche Bank DZ Bank Experian Nomura Raiffeisen Research UBS Univ. Católica Portuguesa Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts European Commission (May 2010) IMF (Oct. 2010) OECD (May 2010)
2010 1.3 1.1 1.4 1.5 1.3 1.6 0.8 1.0 1.2 1.5 1.3 1.5 0.8 1.6 1.3 1.3 1.0 1.0 0.9 0.5 1.1 1.0
2011 -1.1 0.5 -0.5 0.5 -0.9 0.0 -0.6 1.1 -1.1 0.4 1.5 -0.7 -1.1 1.5 -0.3 -0.1 0.4 0.3 0.4 0.7 -0.1 0.8
-1 Jan Mar May Jul Sep Nov
-2
5 | Consumption | variation in %
6
6 | Investment | variation in %
20
4
10
2
0
0 Portugal Euro area -2 1995 2000 2005 2010
-10 Portugal Euro area 2000 2005 2010
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from Statistics Portugal (INE, Instituto Nacional de Estatística) and the Central Bank of Portugal (BP, Banco de Portugal). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: INE. 2 Quarterly GDP (seasonally adjusted), year-on-year variation in %. Source: INE. 3 GDP, evolution of 2010 forecasts since January 2010. 4 GDP, evolution of 2011 forecasts since January 2010. 5 Private consumption, annual variation in %. Source: INE. 6 Gross fixed capital formation, annual variation in %. Source: INE. 7 Private consumption, change in 2010 and 2011 forecasts since January 2010. 8 Gross fixed capital formation, change in 2010 and 2011 forecasts since January 2010. 9 Public debt,% of GDP. Source: BP. 10 Unemployment, % of active population. Source: INE. 11 General government balance, % of GDP. Source: BP. 12 Public debt, evolution of 2010 and 2011 forecasts since January 2010. 13 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 14 General government balance, evolution of 2010 and 2011 forecasts since January 2010.
-20 1995
7 | Consumption | evolution of fcst
2.0 2010 2011 1.5
8 | Investment | evolution of forecasts
3
0 1.0
0.5 -3 0.0 2010 2011 -0.5 Jan Mar May Jul Sep Nov -6 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 91
FOCUSECONOMICS
Real Sector | Additional forecasts
Consumption % variation 2010 2011 1.8 -1.0 1.4 -0.1 1.4 -1.5 1.4 -0.7 1.5 0.3 1.9 -1.4 1.2 1.7 1.2 1.9 1.4 1.5 1.4 1.3 1.2 -1.5 1.7 -0.7 -0.4 0.1 0.0 0.1
Portugal
November 2010
Individual Forecasts Banco BPI BBVA BNP Paribas Credit Suisse Deka Bank Deutsche Bank DZ Bank Experian Nomura Raiffeisen Research UBS Univ. Católica Portuguesa Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago
Investment % variation 2010 2011 -4.7 -7.5 -3.5 -1.5 -6.7 -7.9 -4.3 -0.8 -5.1 1.0 -3.1 -2.7 0.0 1.3 -6.7 0.0 -4.3 -3.9 -3.5 -3.6 -3.4 -7.9 1.3 -1.5 -2.6 -0.9 -1.5 -1.7
Unemployment % of active pop. 2010 2011 10.8 11.2 11.3 12.7 10.6 10.4 10.8 10.3 10.8 11.4 11.0 11.0 10.7 11.4 10.6 11.3 10.8 10.9 10.9 10.8 10.8 10.3 12.7 11.2 11.2 11.1 11.1 11.1
Fiscal Balance % of GDP 2010 2011 -7.3 -4.9 -7.7 -5.9 -7.5 -5.0 -7.4 -5.1 -7.5 -6.0 -7.5 -7.0 -8.6 -7.8 -7.6 -5.3 -8.3 -4.6 -8.0 -8.7 -7.3 -5.9 -8.6 -7.3 -7.5 -7.7 -7.8 -5.8 -7.7 -8.7 -4.6 -5.9 -6.0 -6.3 -5.0 -5.9
Public Debt % of GDP 2010 2011 83.5 85.9 82.8 88.1 85.8 91.1 76.1 86.0 85.0 90.0 85.6 89.4 84.6 91.1 82.1 87.8 76.1 85.8 84.1 83.2 85.2 85.0 84.8 85.9 91.1 88.8 88.7 90.2 90.1 89.9
9 | Public Debt | % of GDP
110 Portugal Euro area
10 | Unemployment | % of active pop.
12 Portugal Euro area
11 | Fiscal Balance | % of GDP
5 Portugal Euro area World 0
90
9
70
6
-5
50 2000 2005 2010
3 1995 2000 2005 2010
-10 1995 2000 2005 2010
12 | Public Debt | evolution of forecasts
95 2010 2011
13 | Unemployment | evolution of fcst
11.5
14 | Fiscal Balance | evolution of fcst
-4
11.0 90 10.5 85 10.0 2010 2011 80 Jan Mar May Jul Sep Nov 9.5 Jan Mar May Jul Sep Nov -10 Jan 2010 2011 Mar May Jul Sep Nov -8 -6
FocusEconomics Consensus Forecast
| 92
FOCUSECONOMICS
Portugal
November 2010
Monetary and External Sector | Inflation, Interest Rate and Current Account Balance
15 | Inflation | 2000 - 2014 | in %
6
16 | Inflation | Q1 07-Q4 11 | in %
4
Consumer Prices and Current Account Balance
Consumer Prices Current Account var. in % EUR bn Individual Forecasts 2010 2011 2010 2011 Banco BPI 1.3 2.0 BBVA BNP Paribas 1.0 1.1 -16.0 -13.9 Credit Suisse 1.1 1.3 Deka Bank 1.2 1.2 -17.4 -17.4 Deutsche Bank 1.4 1.5 -18.1 -14.0 DZ Bank 1.3 1.8 Experian 1.0 1.2 -17.5 -17.9 Nomura Raiffeisen Research 1.3 1.3 -13.8 -9.7 UBS 1.4 1.1 -15.5 -16.4 Univ. Católica Portuguesa 1.4 2.1 -17.3 Summary Minimum 1.0 1.1 -18.1 -17.9 Maximum 1.4 2.1 -13.8 -9.7 Median 1.3 1.3 -17.3 -15.2 Consensus 1.2 1.4 -16.5 -14.9 History 30 days ago 1.2 1.3 -15.0 -13.7 60 days ago 1.1 1.3 -14.0 -12.8 90 days ago 1.0 1.2 -14.0 -12.8 Additional Forecasts Euro. Comm. (May 2010) 1.0 1.4 IMF (Oct. 2010) 0.9 1.2 OECD (May 2010) 0.9 1.1 -
4 2 2 0 0 Portugal Euro area -2 2000 2005 2010 Portugal Euro area -2 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
17 | Inflation 2010 | evolution of fcst
2.0 Maximum Consensus Minimum
18 | Inflation 2011 | evolution of fcst
3.0 Maximum Consensus Minimum 2.0
1.5
1.0
1.0
0.5
0.0 Jan Mar May Jul Sep Nov
0.0 Jan Mar May Jul Sep Nov
19 | 10-year Rate | 1995 - 2014 | in %
12
20 | Current Account | EUR bn
10
0
8
-10
4
-20
Portugal Germany 0 1995 2000 2005 2010
-30 1995 2000 2005 2010
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All monetary sector data are from Statistics Portugal (INE, Instituto Nacional de Estatística) and the Central Bank of Portugal (BP, Banco de Portugal). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation in consumer price index (CPI) in %. 2000-2014. Source: INE. 16 Quarterly inflation, year-on-year variation in consumer price index (CPI) in %. Source: INE. 17 Inflation, evolution of 2010 forecasts since January 2010. 18 Inflation, evolution of 2011 forecasts since January 2010. 19 10-year benchmark bond yield (eop). Source: BP. 20 Current account balance in EUR bn. Source: BP. 21 Daily index levels, Portugal Stock Index. Source: Portugal Stock and Exchange. Jan. 2008 until end of previous month. 22 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
21 | Stock Market | PSI-20
15,000
22 | Current Account | evolution of fcst
-12
12,000
-14
9,000
-16
6,000
2010 2011
3,000 Jan Jul Jan Jul Jan Jul
-18 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 93
FOCUSECONOMICS
Slovakia
November 2010
Slovakia
Slovakia
Outlook improves
• Recent data indicate that the economy continues to recover, albeit at a more moderate pace. August industrial production slowed to a 16.3% expansion, the slowest rate observed so far this year. Consensus Forecast panellists lifted their GDP growth forecast by 0.2 percentage points over last month and see the economy expanding 3.4% this year. Next year, the panel sees economic growth at 3.4%. In September, inflation inched up from the 1.0% rate observed in August to 1.1%. Panellists expect inflation to rise to 1.7% by the end of the year, which is unchanged over last month’s forecast. For 2011, the panel sees inflation rising further to 3.5%.
LONG-TERM TRENDS | 5-year averages
Population (m illion): GDP (USD bn): GDP per capita (USD): GDP growth (%): Fiscal Balance (% of GDP): Inflation (%): Current Account (% of GDP): External Debt (% of GDP): 2000-04 5.4 28 5,256 3.6 -6.4 7.7 -6.7 54.2 2005-09 5.4 72 13,285 5.4 -3.5 3.2 -6.1 60.4 2010-14 5.6 100 17,617 3.8 -4.3 2.4 -3.5 77.8
•
•
Keith Catlin
Senior Economist
REAL SECTOR | Industrial production slows slightly in August In August, industrial output added 16.3% over the same month last year, which was slightly down from the 16.8% expansion recorded in July, but represented, in fact, the slowest expansion so far this year. The monthly slowdown was driven by manufacturing, which accounts for the bulk of industrial production, as the sector added 14.7% year-on-year, which was down from the 21.5% expansion registered in July. Growth in the manufacturing sector was dragged lower as the result of negative growth in food, beverages and tobacco production. In addition, weaker automobile production also affected the monthly reading adversely. Meanwhile, electricity, gas, steam and air conditioning added 27.4% in August, which was well above the 0.3% expansion tallied in July, and finally, mining and quarrying fell 0.1%, which came in above the 7.1% contraction recorded in July. That said, a month-on-month analysis does not corroborate the deterioration observed in the annual figures, as industrial production added 2.2% over the previous month in seasonally adjusted terms. In addition, the overall trend continues to improve, with annual average variation in industrial production jumping from 11.7% in July to 13.7%. Panellists currently expect industrial production to expand 13.7% this year, which is down 1.0 percentage points from last month’s estimate. Next year, industrial production is likely to slow to 7.4% The Central Bank expects the economy to expand 4.3% this year, with economic growth slowing to 3.0% in 2011. Consensus Forecast panellists expects the economy to expand 3.4% in this year, which is up 0.2 percentage points over last month’s forecast. For next year, the panel sees growth at 3.4%.
Industrial Production | variation in %
45.0 YoY 30.0 20.2 20.3 18.8 20.6 15.0 % 0.0 -8.7 -7.4 -6.2 1.4 11.8
YoY, Annual Average
28.7 23.5 16.8 16.3
-15.0
-30.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Note: Year-on-year and average annual changes in %. Source: Slovakia Statistical Office (SSOR) and FocusEconomics calculations.
FocusEconomics Consensus Forecast Eastern Europe
| 94
FOCUSECONOMICS
Slovakia
November 2010
Inflation | Consumer Price Index
0.4 Monthly (left scale) Annual (right scale) 0.3 0.2 0.1 % 0.0 0.0 -0.1 -0.2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul -0.1 Aug Sep 0.0 0.1 0.0 0.0 0.1 0.1 0.0 % 0.5 0.2 1.0 0.4 1.5
MONETARY SECTOR | Inflation edges up despite flat monthly reading In September, consumer prices remained unchanged over the previous month, which came in above the 0.1% price drop recorded in August. Lower prices for health helped compensate for higher prices in clothing and footwear. Despite the flat reading, annual headline inflation inched up from 1.0% in August to 1.1%. Annual average harmonised inflation (based on the harmonised index of consumer prices, HICP, which is the reference rate for measuring price increases within the European Union), was rose a notch from 0.3% in August to 0.4% in September. The Slovak Central Bank currently expects annual average harmonised inflation to reach only 0.9% this year. For next year, the Central Bank expects harmonised inflation to average 2.6%. Consensus Forecast participants expect headline inflation to rise and close the year at 1.7%, which is unchanged over last month’s estimate. Next year, panellists expect inflation to rise to 3.5%.
Note: Annual and monthly variation of consumer price index in %. Source: Slovakia Statistical Office (SSOR).
FocusEconomics Consensus Forecast Eastern Europe
| 95
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (USD) GDP (USD bn) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (eop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Money (annual variation of M1 in %) Inflation (CPI, annual variation in %) Inflation (Core, annual variation in %) Inflation (HICP, annual avg. variation in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month EURIBOR in %, eop Stock Market (variation of SAX in %) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account (% of GDP) Current Account (USD bn) Trade Balance (USD bn) Exports (USD bn) Imports (USD bn) Exports (annual variation in %) Imports (annual variation in %) International Reserves (USD bn) International Reserves (months of imports) External Debt (USD bn) External Debt (% of GDP) Quarterly Data Economic Growth (GDP, annual var. in %) Inflation (CPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month EURIBOR in %, eop Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 5.4 8,874 47.9 7,131 38.5 6.5 6.5 3.9 17.5 -2.5 15.3 -2.8 34.2 24.3 3.7 1.1 2.8 6.2 2.25 2.49 26.5 1.18 1.24 -8.4 -4.0 -2.5 32.1 34.5 16.1 18.4 15.5 5.4 26.9 56.2 Q3 09 -4.9 0.6 1.00 0.75 1.46 Dec-09 11.8 -0.1 0.5 1.43 2006 5.4 10,326 55.9 8,221 44.5 8.5 5.9 9.7 9.3 12.2 12.0 -3.5 30.5 41.2 4.2 2.5 4.2 5.6 3.50 3.73 0.6 1.32 1.26 -7.0 -3.9 -3.1 41.6 44.7 29.7 29.4 13.4 3.6 32.2 57.6 Q4 09 -2.6 0.5 1.00 0.70 1.43 Jan-10 20.2 0.2 0.4 1.39
Slovakia
November 2010
2007 5.4 13,799 75.0 10,067 54.7 10.4 7.1 0.1 9.1 16.1 10.3 -1.9 29.3 14.0 3.4 2.4 2.0 2.4 4.00 4.68 7.2 1.46 1.37 -5.3 -4.0 -0.9 57.5 58.4 38.2 30.6 18.6 3.8 44.3 59.1 Q1 10 4.8 0.8 1.00 0.63 1.35 Feb-10 20.3 0.0 0.4 1.36
2008 5.5 17,380 95.0 11,824 64.6 6.4 6.1 5.3 1.8 7.4 8.7 -2.3 27.7 -7.5 4.4 3.3 3.9 6.0 2.50 2.89 -19.4 1.39 1.47 -6.5 -6.2 -1.0 69.9 70.9 21.5 21.5 18.8 3.2 52.5 55.3 Q2 10 4.7 1.0 1.00 0.77 1.22 Mar-10 18.8 0.1 0.8 1.35
2009 5.5 16,046 88.2 11,520 63.3 -4.7 -0.7 2.8 -10.5 -13.1 13.9 -6.8 35.7 28.2 0.5 -0.2 0.9 -3.6 1.00 0.70 -25.7 1.43 1.39 -3.2 -2.8 1.7 55.3 53.7 -20.8 -24.3 1.8 0.4 65.3 74.0 Q3 10 2.9 1.1 1.00 0.89 1.37 Apr-10 20.6 0.4 1.3 1.32
2010 5.5 16,801 93.0 12,436 68.9 3.4 0.5 2.3 17.0 14.3 -7.4 1.7 1.00 0.95 1.27 1.35 -3.1 -2.9 1.2 59.6 58.5 7.7 9.0 1.5 0.3 71.1 76.4 Q4 10 2.7 1.7 1.00 0.95 1.27 May-10 28.7 0.1 1.2 1.23
2011 5.6 16,530 92.3 13,066 73.0 3.4 1.9 3.6 7.5 13.5 -5.6 3.5 1.38 1.50 1.26 1.27 -3.2 -3.0 1.4 62.4 61.1 4.8 4.5 1.6 0.3 77.8 84.2 Q1 11 3.0 3.2 1.00 1.09 1.28 Jun-10 23.5 0.0 1.0 1.22
2012 5.6 17,283 97 13,830 78.0 3.9 3.6 5.3 6.6 11.8 -3.9 2.5 2.26 2.39 1.24 1.25 -3.8 -3.7 0.8 68.0 67.2 8.9 9.8 1.7 0.3 78.7 80.8 Q2 11 3.0 3.2 1.06 1.30 1.29 Jul-10 16.8 0.1 1.1 1.30
2013 5.7 18,173 104 14,612 83.2 4.2 4.0 5.0 7.0 10.6 -2.6 2.7 3.10 3.29 1.25 1.24 -3.7 -3.8 0.7 72.6 72.3 6.9 7.7 1.8 0.3 78.4 75.7 Q3 11 3.5 3.4 1.20 1.49 1.29 Aug-10 16.3 -0.1 1.0 1.28
2014 5.8 19,297 111 15,423 88.9 4.2 4.3 4.9 6.4 10.3 -2.2 2.5 3.30 3.18 1.25 1.25 -3.5 -3.9 0.7 78.4 78.1 8.0 8.1 2.0 0.3 80.2 72.1 Q4 11 3.6 3.5 1.38 1.50 1.26 Sep-10 0.0 1.1 1.37
FocusEconomics Consensus Forecast Eastern Europe
| 96
FOCUSECONOMICS
Slovakia
November 2010
Real and Monetary Sector | Gross Domestic Product and Fiscal Balance
1 | Real GDP | 1995- 2014 | % variation
12
2 | Real GDP | Q1 07-Q4 11 | % variation
18 Slovakia Eastern Europe World
6
12
6 0 0 -6 Slovakia Eastern Europe World -12 1995 2000 2005 2010
-6
-12 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
6 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
8 Maximum Consensus Minimum
4
6
2
4
0
2
-2 May Aug Nov Feb May Aug
0 May Aug Nov Feb May Aug
Economic Growth and Fiscal Balance Real GDP Fiscal Balance variation in % % of GDP Individual Forecasts 2010 2011 2010 2011 BofA Merrill Lynch 1.4 4.1 Capital Economics 4.0 1.5 -8.0 -6.0 CSOB 3.0 3.2 -7.2 -5.5 DZ Bank 2.7 3.6 -6.0 -5.5 Erste Bank 3.1 4.0 -7.5 -6.0 Experian 3.2 2.9 ING 2.8 3.5 -6.4 -5.5 OTP Bank 4.2 2.8 -7.8 -4.9 Raiffeisen Research 4.2 4.0 -7.8 -4.9 UniCredit 4.3 3.1 -7.8 -5.0 VÚB Banka 4.2 3.6 -8.0 -6.5 WIIW 4.0 4.0 -7.0 -6.5 Summary 1.4 1.5 -8.0 -6.5 Minimum Maximum 4.3 4.1 -6.0 -4.9 Median 3.6 3.6 -7.6 -5.5 Consensus 3.4 3.4 -7.4 -5.6 History 30 days ago 3.2 3.4 -7.1 -5.5 60 days ago 2.9 3.4 -6.8 -5.4 90 days ago 2.9 3.4 -6.8 -5.4 Additional Forecasts IMF (Oct. 2010) 4.1 4.3 Euro. Comm. (May 2010) 2.7 3.6 -
5 | Unemployment | % of active pop.
22 Slovakia Eastern Europe 18
6 | Fiscal Balance | % of GDP
5 Slovakia Eastern Europe World
0
14
-5
10
-10
6 1995 2000 2005 2010
-15 1995 2000 2005 2010
7 | Unemployment | evolution of fcst
15
8 | Fiscal Balance | evolution of fcst
-2
Notes and sources
2010 2011
13
-4
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Statistical Office of the Slovak Republic (SVSR, Štatisticky úrad Slovenskej republiky). Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts during the last 18 months. 5 Unemployment, % of active population. 6 Balance of non-financial public sector, % of GDP. 7 Unemployment, evolution of 2010 and 2011 forecasts during the last 18 months. 8 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts during the last 18 months.
11 2010 2011 9 May Aug Nov Feb May Aug
-6
-8 May Aug Nov Feb May Aug
FocusEconomics Consensus Forecast Eastern Europe
| 97
FOCUSECONOMICS
Slovakia
November 2010
Monetary and External Sector | Inflation, Interest Rate, Exchange Rate and Current Account Balance
9 | Inflation | in %
24 Slovakia Eastern Europe 18 30
10 | Interest Rate | in %
40 Slovakia Eastern Europe
12
20
6
10
0 2000 2005 2010
0 2000 2005 2010
11 | Inflation | evolution of forecast
4
12 | Interest Rate | evolution of forecast
4
3 3 2 2 2010 2011 1 May Aug Nov Feb May Aug 1 2010 2011 0 May Aug Nov Feb May Aug
Consumer Price Index and Current Account CPI Current Account variation in % USD billion Individual Forecasts 2010 2011 2010 2011 BofA Merrill Lynch Capital Economics -2.9 -2.7 CSOB 1.6 3.1 DZ Bank Erste Bank 2.0 4.0 -2.0 -2.6 Experian -3.9 -3.3 ING -3.1 -3.8 OTP Bank 1.5 2.2 -3.1 -2.1 Raiffeisen Research 1.7 3.8 -1.0 -1.6 UniCredit 1.9 4.2 -4.1 VÚB Banka 1.7 3.4 -3.2 -3.2 WIIW -2.8 -4.4 Summary 1.5 2.2 -4.1 -4.4 Minimum Maximum 2.0 4.2 -1.0 -1.6 Median 1.7 3.6 -3.1 -3.0 Consensus 1.7 3.5 -2.9 -3.0 History 30 days ago 1.7 3.2 -2.9 -3.1 60 days ago 2.0 3.1 -3.0 -3.3 90 days ago 2.0 3.1 -3.0 -3.3 Additional Forecasts IMF (Oct. 2010) 1.0 2.0 Euro. Comm. (May 2010) 1.3 2.8 -
13 | Exchange Rate | USD per EUR
1.6
14 | Current Account | % of GDP
8 Slovakia 4 Eastern Europe
1.4
0
1.2
-4
1.0
-8
Notes and sources
0.8 1995 2000 2005 2010
-12 1995 2000 2005 2010
15 | USD/EUR | evolution of fcst
1.5 2010 2011 1.4
16 | Current Account | evol. of fcst
-2 2010 2011 -3
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Statistical Office of the Slovak Republic (SVSR, Štatisticky úrad Slovenskej republiky) and the Bank of Slovakia (NBS, Národná banka Slovenska). See below for details. European Commission forecasts refer to annual average harmonised inflation. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual variation in consumer price index (CPI) in % (eop). 2000-2014. Source: Slovakia Statistical Office. 10 Interest rate, ECB Refinancing rate in % (eop). 2000-2014. Source: NBS. 11 Inflation, evolution of 2010 and 2011 forecasts during the last 18 months. 12 Interest rate, evolution of 2010 and 2011 forecasts during the last 18 months. 13 Exchange rate, USD per EUR (eop). Source: NBS. 14 Current account balance as % of GDP. Source: NBS. 15 Exchange rate, evolution of 2010 and 2011 forecasts during the last 18 months. 16 Current account in USD billion, evolution of 2010 and 2011 forecasts during the last 18 months.
1.3
-4
1.2
-5
1.1 May Aug Nov Feb May Aug
-6 May Aug Nov Feb May Aug
FocusEconomics Consensus Forecast Eastern Europe
| 98
FOCUSECONOMICS
Slovenia
November 2010
Slovenia
Slovenia
Outlook improves
• Recent data point to a continued recovery in the Slovenian economy. Industrial production accelerated strongly in August to a 14.0% yearon-year expansion, buttressed by robust manufacturing growth. Consensus Forecast panellists anticipate GDP to expand 1.1% this year, which is up 0.3 percentage points over last month’s estimate. For 2011, the panel expects economic growth to accelerate to 2.1%. Inflation fell from 2.3% in August to 2.0% in September. Panellists expect inflation to inch up to 2.1% by the end of the year, which is down 0.3 percentage points over last month’s forecast. For 2011, the panel sees inflation rising to 2.3%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (USD bn): GDP per capita (USD): GDP growth (%): Fiscal Balance (% of GDP): Inflation (%): Current Account (% of GDP): External Debt (% of GDP): 2000-04 2.0 24.8 12,466 3.7 -3.0 6.8 -1.0 46 2005-09 2.0 44.8 22,131 2.6 -2.0 3.0 -3.2 96 2010-14 2.0 50.4 24,730 2.5 -3.6 2.3 -1.2 113
•
•
Keith Catlin
Senior Economist
REAL SECTOR | Industrial production jumps in August In August, industrial output increased 14.0% annually, which more than doubled the 6.9% expansion recorded in July (previously reported: +7.1% year-on-year). The acceleration in industrial production was broad-based, as growth in all three major categories picked up the pace over the previous month. Manufacturing output, which accounts for the bulk of industrial production, rose 15.0% over the same month last year, up from the 7.6% reading recorded the previous month. Electricity, gas and water added 1.1%, which contrasted the 3.6% decline in July, and finally, production in the mining sector soared 36.9%, which nearly doubled the 18.5% expansion observed in July. Seasonally adjusted data corroborate the pick up suggested by the annual data, as industrial production added 5.2% over July. Furthermore, annual average growth in industrial production jumped from minus 2.0% to a positive 0.4%. Consensus Forecast panellists expect industrial production to continue recovering throughout the year and expect it to expand 3.7% in the full year. For next year, the panel sees industrial output moderating to 3.5%. Meanwhile, Consensus Forecast panellists the economy to grow 1.1% this year, which is up 0.3 percentage points over the previous month’s projection. In 2011, the panel expects the economy to expand 2.1%.
Industrial Production | variation in %
10.0 MoM s.a. (left scale) YoY, Ann. Average (right scale) 6.1 5.0 3.5 3.1 3.8 4.8 2.9 0.6 0.0 5.2 0.0 10.0
%
-5.0 -3.9
-0.8 -2.8 -5.2 -2.1
% -10.0
-10.0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
-20.0
Note: Month-on-month seasonally adjusted changes and annual average growth of industrial production index in %. Source: Statistical Office of the Republic of Slovenia (SORS).
FocusEconomics Consensus Forecast Eastern Europe
| 99
FOCUSECONOMICS
Slovenia MONETARY SECTOR | Inflation dips in September
November 2010
Inflation | Consumer Price Index
1.2 0.9 0.6 0.1 0.0
%
In September, consumer prices fell 0.5% over the previous month, which contrasted the 0.3% increase registered in August. The price decrease was mainly driven by lower prices for restaurants and hotels, as well as for transport.
3.0
1.1
1.0
0.4
0.4
2.0 0.3 0.3
1.0 -0.2 -0.5 -0.8 Monthly (left scale) Annual (right scale) -0.7 -1.0 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep -0.5
%
As a result of the September reading, annual headline inflation moderated from 2.3% in August to 2.0%. Annual harmonised inflation (based on the harmonised consumer price index – HICP), which is the reference rate for measuring price increases within the European Union, followed suit and decreased from 2.4% in August to 2.1%. At the current level, inflation in Slovenia is well above the 1.8% September inflation rate estimated for the entire Euro area. The Euro area inflation is slowly approaching the 2.0% ceiling set by the European Central Bank (ECB). Nevertheless, on 7 October, the ECB left the benchmark interest rate unchanged at a historic low of 1.00% for the 17th consecutive month. Consensus Forecast participants expect headline inflation to rise to 2.1% this year. Next year, panellists anticipate inflation to inch up further to 2.3%.
-0.6
0.0
-1.2
Note: Annual and monthly variation of consumer price index in %. Source: Statistical Office of the Republic of Slovenia (SORS).
FocusEconomics Consensus Forecast Eastern Europe
| 100
FOCUSECONOMICS
Economic Indicators | 2005 - 2014
Annual Data Real Sector Population (million) GDP per capita (USD) GDP (USD bn) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (ann. var. in %) Government Consumption (ann. var. in %) Fixed Investment (annual variation in %) Industrial Production (annual variation in %) Unemployment (eop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Money (annual variation of M1 in %) Inflation (CPI, annual variation in %) Inflation (HICP annual average variation in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month EURIBOR in %, eop Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account (% of GDP) Current Account (USD bn) Trade Balance (USD bn) Exports (USD bn) Imports (USD bn) Exports (annual variation in %) Imports (annual variation in %) International Reserves (USD bn) International Reserves (months of imports) External Debt (USD bn) External Debt (% of GDP) Quarterly Data Economic Growth (GDP, annual var. in %) Inflation (CPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month EURIBOR in %, eop Exchange Rate (USD per EUR, eop) Monthly Data Industrial Production (annual variation in %) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Exchange Rate (USD per EUR, eop) 2005 2.0 17,469 35.0 14,050 28.1 4.5 2.8 3.4 3.7 3.5 6.5 -1.4 27.0 13.0 2.3 -0.7 1.5 2.25 2.49 1.18 1.24 -1.8 -0.6 -1.3 18.1 19.4 13.0 12.0 6.9 4.3 24.3 69 Q3 09 -8.8 -0.1 1.00 0.75 1.46 Dec-09 4.7 -0.5 1.8 1.43 2006 2.0 19,019 38.2 15,283 30.7 5.9 2.9 4.0 10.1 5.7 6.0 -1.3 26.7 8.2 2.8 -1.1 3.3 3.50 3.73 1.32 1.26 -2.6 -1.0 -1.5 21.3 22.8 17.5 17.6 7.1 3.8 31.7 83 Q4 09 -5.7 1.8 1.00 0.70 1.43 Jan-10 -8.7 -0.8 1.5 1.39
Slovenia
November 2010
2007 2.0 23,475 47.4 18,689 37.7 6.9 6.7 0.7 12.8 7.2 4.7 0.0 23.4 2.2 5.6 -2.9 3.4 4.00 4.68 1.46 1.37 -4.7 -2.2 -2.3 27.1 29.4 27.0 29.0 1.0 0.4 51.1 108 Q1 10 -1.1 1.4 1.00 0.63 1.35 Feb-10 -1.2 0.4 1.3 1.36
2008 2.0 26,893 54.6 19,620 39.8 3.7 3.0 6.2 8.5 2.5 4.3 -1.7 22.6 -3.7 2.1 0.7 2.2 2.50 2.89 1.39 1.47 -6.1 -3.3 -3.9 29.6 33.5 9.3 13.8 1.0 0.3 54.5 100 Q2 10 2.2 1.9 1.00 0.77 1.22 Mar-10 8.4 1.1 1.4 1.35
2009 2.0 23,798 48.6 16,190 33.1 -8.1 -0.6 3.0 -21.6 -17.4 6.4 -5.5 35.7 7.7 1.8 -0.6 -1.2 1.00 0.70 1.43 1.39 -1.0 -0.5 -0.9 22.6 23.4 -23.8 -30.0 1.1 0.6 57.8 119 Q3 10 1.8 2.0 1.00 0.89 1.37 Apr-10 9.1 1.0 2.3 1.32
2010 2.0 23,674 48.5 17,523 35.9 1.1 -0.2 -4.4 3.7 7.4 -5.9 2.1 1.00 0.95 1.27 1.35 -1.0 -0.5 -0.6 23.7 24.8 4.8 5.8 0.8 0.4 58.7 121 Q4 10 1.0 2.1 1.00 0.95 1.27 May-10 14.4 0.4 2.1 1.23
2011 2.0 23,109 47.3 18,267 37.4 2.1 1.9 4.5 3.5 6.8 -4.4 2.3 1.38 1.50 1.26 1.27 -1.7 -0.8 -0.8 25.8 27.1 8.6 9.3 0.8 0.4 58.4 123 Q1 11 2.5 2.4 1.00 1.09 1.28 Jun-10 10.3 0.3 1.9 1.22
2012 2.0 24,092 49.3 19,279 39.4 3.1 2.2 3.9 4.0 6.3 -3.4 2.4 2.26 2.39 1.24 1.25 -1.4 -0.7 -1.0 27.0 28.5 5.0 5.1 0.8 0.3 53.1 108 Q2 11 2.3 2.0 1.06 1.30 1.29 Jul-10 6.9 -0.7 2.1 1.30
2013 2.0 25,463 51.9 20,473 41.7 3.2 2.9 4.3 3.9 5.6 -2.3 2.6 3.10 3.29 1.25 1.24 -1.0 -0.5 -0.8 27.9 29.2 3.4 2.6 0.8 0.3 55.8 108 Q3 11 1.5 1.9 1.20 1.49 1.29 Aug-10 14.0 0.3 2.3 1.28
2014 2.0 27,313 55.3 21,829 44.2 3.3 3.0 4.5 3.9 5.3 -1.9 2.8 3.30 3.18 1.25 1.25 -1.0 -0.5 -0.8 28.9 30.3 3.5 3.8 0.8 0.3 56.8 103 Q4 11 3.3 2.3 1.38 1.50 1.26 Sep-10 -0.5 2.0 1.37
FocusEconomics Consensus Forecast Eastern Europe
| 101
FOCUSECONOMICS
Slovenia
November 2010
Real and Monetary Sector | Gross Domestic Product and Fiscal Balance
1 | Real GDP | 1995 - 2014 | % var.
10
2 | Real GDP | Q1 07-Q4 11 | % variation
15 Slovenia Eastern Europe World
Economic Growth and Fiscal Balance
Real GDP Fiscal Balance variation in % % of GDP 2010 2011 2010 2011 1.5 1.8 -5.0 -4.0 1.1 1.8 -6.5 -6.0 1.3 1.8 0.9 2.5 1.5 2.7 -5.8 -2.9 0.5 2.0 -6.0 -4.5 1.2 2.1 -6.0 -4.7 0.5 2.0 -6.0 -4.5 0.5 1.5 1.2 1.1 0.8 0.8 0.8 0.8 1.1 1.8 2.7 2.0 2.1 2.1 2.2 2.2 2.4 1.8 -6.5 -5.0 -6.0 -5.9 -5.7 -5.7 -5.7 -6.0 -2.9 -4.5 -4.4 -4.4 -4.5 -4.5 -
5
10
5 0 0 -5
Slovenia Eastern Europe World 2000 2005 2010
-5
Individual Forecasts Capital Economics DZ Bank Experian IMAD Institute EIPF Raiffeisen Research UniCredit WIIW Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) Euro. Comm. (May 2010)
-10 1995
-10 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11
3 | GDP 2010 | evolution of forecasts
4 Maximum Consensus Minimum
4 | GDP 2011 | evolution of forecasts
5 Maximum Consensus Minimum
4
2
3
0
2
-2 May Aug Nov Feb May Aug
1 May Aug Nov Feb May Aug
5 | Unemployment | % of active pop.
12
6 | Fiscal Balance | % of GDP
5 Slovenia Eastern Europe World
10 0 8 -5 6 Slovenia Eastern Europe 4 1995 2000 2005 2010 -10 2000 2005 2010
7 | Unemployment | evolution of fcst
8.0 2010 2011 7.5
8 | Fiscal Balance | evolution of fcst
0 2010 2011
Notes and sources
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Statistical Office of the Republic of Slovenia (SORS). Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %. 3 GDP, evolution of 2010 forecasts during the last 18 months. 4 GDP, evolution of 2011 forecasts during the last 18 months. 5 Unemployment, % of active population. 6 Balance of non-financial public sector, % of GDP. 2000-2014. 7 Unemployment, evolution of 2010 and 2011 forecasts during the last 18 months. 8 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts during the last 18 months.
-2 7.0 -4 6.5
6.0 May Aug Nov Feb May Aug
-6 May Aug Nov Feb May Aug
FocusEconomics Consensus Forecast Eastern Europe
| 102
FOCUSECONOMICS
Slovenia
November 2010
Monetary and External Sector | Inflation, Interest Rate, Exchange Rate and Current Account Balance
9 | Inflation | in %
24 Slovenia Eastern Europe 18 30
10 | Interest Rate | in %
40 Slovenia Eastern Europe
Consumer Price Index and Current Account
CPI Current Account variation in % USD billion 2010 2011 2010 2011 -0.6 -0.7 -0.7 -0.7 1.8 2.3 -0.4 -0.5 2.2 1.5 -0.6 -1.3 2.0 2.0 -0.4 -0.7 2.5 3.2 -0.5 -1.0 -0.4 -0.7 1.8 2.5 2.1 2.1 2.4 1.9 1.9 2.1 1.8 1.5 3.2 2.2 2.3 2.2 2.2 2.2 2.4 2.0 -0.7 -0.4 -0.5 -0.5 -0.5 -0.6 -0.6 -1.3 -0.5 -0.7 -0.8 -0.8 -0.9 -0.9 -
12
20
6
10
Individual Forecasts Capital Economics DZ Bank Experian IMAD Institute EIPF Raiffeisen Research UniCredit WIIW
2005 2010
0 2000 2005 2010
0 2000
11 | Inflation | evolution of forecast
3.0 2010 2011
12 | Interest Rate | evolution of forecast
4 2010 2011 3
Summary Minimum Maximum Median Consensus History 30 days ago 60 days ago 90 days ago Additional Forecasts IMF (Oct. 2010) Euro. Comm. (May 2010)
2.5 2 2.0 1
1.5 May Aug Nov Feb May Aug
0 May Aug Nov Feb May Aug
13 | Exchange Rate | USD per EUR
1.6
14 | Current Account | % of GDP
4
1.4
0
1.2
-4
1.0
Slovenia Eastern Europe
Notes and sources
0.8 1995 2000 2005 2010
-8 1995 2000 2005 2010
15 | USD/EUR | evolution of fcst
1.5 2010 2011 1.4
16 | Current Account | evol. of fcst
0 2010 2011 -1
General: Long-term chart period from 1995 to 2014 unless otherwise stated. All real sector data are from the Statistical Office of the Republic of Slovenia (SORS) and the Central Bank of Slovenia (BS, Banka Slovenije). See below for details. European Commission Forecasts refer to annual average harmonised inflation. Forecasts based on FocusEconomics Consensus Forecast. 9 Inflation, annual variation in consumer price index (CPI) in % (eop). 2000-2014. Source: SORS. 10 Interest rate, ECB refinancing rate in % (eop). 2000-2014. Source: BS. 11 Inflation, evolution of 2010 and 2011 forecasts during the last 18 months. 12 Interest rate, evolution of 2010 and 2011 forecasts during the last 18 months. 13 Exchange rate, USD per EUR (eop). Source: BS. 14 Current account balance as % of GDP. Source: BS. 15 Exchange rate, evolution of 2010 and 2011 forecasts during the last 18 months. 16 Current account in USD billion, evolution of 2010 and 2011 forecasts during the last 18 months.
1.3 -2 1.2
1.1 May Aug Nov Feb May Aug
-3 May Aug Nov Feb May Aug
FocusEconomics Consensus Forecast Eastern Europe
| 103
FOCUSECONOMICS
Cyprus
November 2010
Cyprus
Cyprus
Outlook improves
• Consensus Forecast panellists expect the economy to contract 0.1% this year, which is up 0.1 percentage points from last month’s forecast. For 2011, panellists expect the economy to rebound and grow 1.4%. Inflation rose from 3.2% in August to 3.5% in September. Panellists expect inflation to average 2.6% this year, which is up 0.1 percentage points from last month’s figure. In 2011, the panel anticipates inflation will moderate to 2.4%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 0.7 11.2 15,777 3.5 -3.9 60.9 3.1 -4.0 2005-09 0.8 15.6 20,063 3.0 -1.1 59.3 2.2 -10.0 2010-14 0.8 19.0 22,368 1.7 -5.5 66.2 2.5 -6.7
•
Joan Enric Domene
Economist
1 | GDP | % variation
6
2 | Fiscal Balance | % of GDP
5 Cyprus Euro area World
3 | Inflation | in %
6 Cyprus Euro area 4
3
0
0
-5
2
-3 Cyprus Euro area World -6 2000 2003 2006 2009
-10 2000 2003 2006 2009
0 2000 2003 2006 2009
4 | GDP | evolution of forecasts
3 2010 2011 2
5 | Fiscal Balance | evolution of fcst
-5 2010 2011 -6
6 | Inflation | evolution of forecasts
3.0 2010 2011 2.5
1 -7 0 2.0
-1 Jan Mar May Jul Sep Nov
-8 Jan Mar May Jul Sep Nov
1.5 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 104
FOCUSECONOMICS
Economic Indicators | 2002 - 2011
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, ann. var. in %) Private Consumption (annual var. in %) Fixed Investment (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Inflation (HICP, annual variation in %) Inflation (HICP annual average variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2002 0.7 15,563 11.0 2.1 1.3 8.6 3.6 -4.4 64.6 3.1 2.8 2.75 2.87 -3.7 -0.4 -3.4 0.9 4.2 -18.6 -1.7 2003 0.7 16,446 11.8 1.9 2.1 2.4 4.1 -6.5 68.9 2.2 4.0 2.00 2.14 -2.2 -0.3 -3.1 0.8 3.9 -6.7 -7.3
Cyprus
November 2010
2004 0.7 17,326 12.7 4.2 6.5 11.6 4.7 -4.1 70.2 3.9 1.9 2.00 2.16 -5.0 -0.6 -3.6 0.9 4.6 14.9 16.3
2005 0.7 17,969 13.5 3.9 4.2 4.1 5.3 -2.4 69.1 1.4 2.0 2.25 2.49 -5.9 -0.8 -3.8 1.2 5.1 31.2 10.7
2006 0.8 18,834 14.4 4.1 4.7 10.2 4.6 -1.2 64.6 1.5 2.2 3.50 3.73 -7.0 -1.0 -4.4 1.1 5.5 -9.5 8.8
2007 0.8 20,392 15.9 5.1 9.4 13.4 4.0 3.4 58.3 3.7 2.2 4.00 4.68 -11.7 -1.9 -5.3 1.1 6.4 -2.6 15.2
2008 0.8 21,853 17.2 3.6 8.4 8.6 3.6 0.9 48.4 1.8 4.4 2.50 2.89 -17.7 -3.0 -6.2 1.2 7.4 9.9 15.9
2009 0.8 21,266 16.9 -1.7 -3.0 -12.0 5.3 -6.1 56.2 1.6 0.2 1.00 0.70 -7.9 -1.3 -4.7 1.0 5.7 -19.1 -23.2
2010 0.8 21,153 17.4 -0.1 -1.5 -6.3 6.3 -6.8 62.1 2.6 1.00 0.97 -7.7 -1.3 -4.9 1.0 5.8 4.6 2.6
2011 0.8 21,606 18.0 1.4 1.8 -0.3 6.4 -7.0 66.4 2.4 1.17 1.37 -7.3 -1.3 -5.2 1.1 6.1 8.4 5.5
7 | Unemployment | % of active pop.
12 Cyprus Euro area
8 | Current Account | EUR bn
0
-1
9
-2
6
-3
Notes and sources
3 2000 2003 2006 2009
-4 2000 2003 2006 2009
9 | Unemployment | evol. of fcst
7.0 2010 2011 6.5
10 | Current Account | evol. of fcst
-1.2 2010 2011 -1.4
General: Long-term chart period from 2000 to 2011 unless otherwise stated. All data are from the Central Bank of Cyprus (CBC), the Statistical Service of the Republic of Cyprus (CYSTAT) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: CYSTAT. 2 Balance of non-financial public sector, % of GDP. Source: CYSTAT. 3 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). Source: CYSTAT. 4 GDP, evolution of 2010 and 2011 forecasts since January 2010. 5 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since January 2010. 6 Inflation, evolution of 2010 and 2011 forecasts since January 2010. 7 Unemployment, % of active population. Source: Eurostat. 8 Current account balance EUR bn. Source: Eurostat. 9 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 10 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
6.0
-1.6
5.5 Jan Mar May Jul Sep Nov
-1.8 Jan Mar May Jul Sep Nov
FocusEconomics Consensus Forecast
| 105
FOCUSECONOMICS
Luxembourg
November 2010
Luxembourg
Luxembourg
Outlook improves
• Consensus Forecast panellists raised their projections for 2010 growth by 0.2 percentage points and anticipate the economy to grow 2.2%. Next year, the panel expects the economy to expand 2.5%. Inflation stepped up from 2.2% in August to 2.4%. Consensus Forecast panellists expect inflation to remain stable in the remainder of the year and average 2.4%, which is up 0.1 percentage points from last month’s projection. Next year, the panel sees inflation moderating to 1.9%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 0.4 24.4 54,694 4.2 2.7 6.2 2.8 10.5 2005-09 0.5 35.8 74,995 2.8 1.4 9.5 2.7 8.7 2010-14 0.5 43.3 83,282 2.7 -1.8 19.9 2.0 7.2
•
Armando Ciccarelli
Senior Economist
1 | GDP | variation in %
10
2 | Fiscal Balance | % of GDP
8
3 | Inflation | in %
6
4
4
5
0 2
0
-4 0 Luxembourg Euro area World 2006 2008 2010 Luxembourg Euro area -2 2000 2002 2004 2006 2008 2010
-5
Luxembourg Euro area World
-8
2000 2002 2004 2006 2008 2010
2000 2002 2004
4 | GDP | evolution of forecasts
3.0
5 | Fiscal Balance | evolution of fcst
-3.0 2010 2011
6 | Inflation | evolution of forecasts
3.0
2.5
-3.5
2.5
2.0
-4.0
2.0
1.5 2010 1.0 Jan Mar May Jul Sep Nov 2011
-4.5
1.5 2010 2011 May Jul Sep Nov
-5.0 Jan Mar May Jul Sep Nov
1.0 Jan Mar
FocusEconomics Consensus Forecast
| 106
FOCUSECONOMICS
Economic Indicators | 2002 - 2011
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Fixed Investment (annual var. in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector HICP (annual variation in %) HICP (annual average variation in %) Inflation (PPI, annual variation in %) ECB Refinancing Rate (%, eop) 3-Month Euribor (%, eop) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2002 0.4 54,025 24.0 4.1 5.7 5.5 2.6 2.1 6.3 2.8 2.1 0.8 2.75 2.87 1.05 0.95 10.5 2.5 -2.2 10.1 12.3 -0.3 -4.5 2003 0.4 57,627 25.8 1.5 -5.9 6.3 3.5 0.5 6.1 2.4 2.5 0.1 2.00 2.14 1.26 1.13 8.1 2.1 -2.6 9.7 12.3 -3.6 0.4
Luxembourg
November 2010
2004 0.5 60,343 27.5 4.4 1.9 2.7 3.9 -1.1 6.3 3.5 3.2 17.3 2.00 2.16 1.36 1.24 11.9 3.3 -2.9 10.9 13.7 12.2 11.4
2005 0.5 65,660 30.3 5.4 2.2 2.5 4.2 0.0 6.1 3.4 3.8 2.1 2.25 2.49 1.18 1.24 11.0 3.3 -3.4 11.7 15.1 8.0 10.1
2006 0.5 72,800 34.2 5.6 2.4 4.7 4.4 1.4 6.5 2.3 3.0 7.1 3.50 3.73 1.32 1.26 10.3 3.5 -3.4 13.2 16.6 12.0 9.5
2007 0.5 78,677 37.5 6.5 2.5 12.6 4.4 3.6 6.7 4.3 2.7 4.1 4.00 4.68 1.46 1.37 10.1 3.8 -3.5 13.4 16.9 2.2 2.1
2008 0.5 81,332 39.3 0.0 3.2 -0.1 4.4 2.9 13.7 0.7 4.1 6.0 2.50 2.89 1.39 1.47 5.3 2.1 -4.3 14.5 18.9 8.1 11.5
2009 0.5 76,505 37.8 -3.4 -0.7 -14.9 5.7 -0.7 14.5 2.5 0.0 -9.9 1.00 0.70 1.43 1.39 6.8 2.5 -3.1 11.2 14.2 -23.1 -24.6
2010 0.5 78,681 39.5 2.2 1.0 1.6 5.9 -3.3 18.7 2.4 1.00 0.97 1.33 1.38 4.6 1.8 -2.8 11.9 14.4 6.6 1.5
2011 0.5 80,739 41.2 2.5 2.2 3.8 5.7 -3.3 21.1 1.9 1.17 1.37 1.30 1.31 5.0 2.1 -2.9 12.8 14.9 7.1 3.1
7 | Unemployment | % of active pop.
12 Luxembourg Euro area 9
8 | Current Account | EUR bn
4
3
6
2
3
Notes and sources
0 2000 2002 2004 2006 2008 2010
1 2000 2002 2004 2006 2008 2010
9 | Unemployment | evol. of fcst
8 2010 2011
10 | Current Account | evol. of fcst
4 2010 2011
General: Long-term chart period from 2000 to 2011 unless otherwise stated. All data are from the Central Bank of Luxembourg (BCL), Eurostat, and the Statistics Office (STATEC, Service Central de la Statistique et des Études Économiques). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: STATEC. 2 General government balance, % of GDP. Source: Eurostat. 3 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). Source: STATEC. 4 GDP, evolution of 2010 and 2011 forecasts since January 2010. 5 General government balance, evolution of 2010 and 2011 forecasts since January 2010. 6 Inflation, evolution of 2010 and 2011 forecasts since January 2010. 7 Unemployment, % of active population. Source: STATEC. 8 Current account balance in EUR bn. Source: BCL. 9 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 10 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
7
3
6
2
5 Jan Mar May Jul Sep Nov
1 Jan Mar May Jul Sep Nov
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Malta
November 2010
Malta
Malta
Outlook improves
• Consensus Forecast panellists expect the economy to expand 1.5% this year, which is up 0.3 percentage points from last month’s forecast. For 2011, panellists expect economic growth to accelerate to 1.9%. Panellists expect inflation to average 1.9% this year, which is down 0.1 percentage points from last month’s estimate. In 2011, the panel anticipates inflation will average 2.1%.
LONG-TERM TRENDS | 5-year averages
Population (million): GDP (EUR bn): GDP per capita (EUR): GDP growth (%): Fiscal Balance (% of GDP): Public Debt (% of GDP): Inflation (%): Current Account (% of GDP): 2000-04 0.4 4.4 11,174 2.2 -6.5 63.9 2.5 -4.6 2005-09 0.4 5.4 13,112 2.3 -3.2 65.7 2.5 -6.7 2010-14 0.4 6.5 15,492 2.1 -3.3 71.0 2.2 -10.0
•
Marcos Felipe Casarin
Economist
1 | GDP | % variation
10 Malta Euro area World 5
2 | Fiscal Balance | % of GDP
5 Malta Euro area World 0
3 | Inflation | in %
6 Malta Euro area
4
0
-5
2
-5 2000 2003 2006 2009
-10 2000 2003 2006 2009
0 2000 2003 2006 2009
4 | GDP | evolution of forecasts
3 2010 2011 2
5 | Fiscal Balance | evolution of fcst
-3.5
6 | Inflation | evolution of forecasts
2.4
2.2 -4.0 2.0
1
-4.5 1.8 2010 2011 1.6 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2010 2011
0 Jan Mar May Jul Sep Nov
-5.0
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Economic Indicators | 2002 - 2011
Annual Data Real Sector Population (million) GDP per capita (EUR) GDP (EUR bn) Economic Growth (GDP,annual var. in %) Private Consumption (annual var. in %) Fixed Investment (annual variation in %) Unemployment (aop, % of active population) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector HICP (annual variation in %) HICP (annual average variation in %) 3-Month Euribor (%, eop) 10-year Bond Yield (%, eop) Exchange Rate (USD per EUR, eop) Exchange Rate (USD per EUR, average) External Sector Current Account Balance (% of GDP) Current Account Balance (EUR bn) Trade Balance (EUR bn) Exports (EUR bn) Imports (EUR bn) Exports (annual variation in %) Imports (annual variation in %) 2002 0.4 11,375 4.5 2.6 -1.5 -19.5 7.5 -5.5 60.1 2.1 2.3 2.87 5.74 1.05 0.95 2.4 0.1 0.1 3.8 3.7 7.6 -1.2 2003 0.4 11,129 4.4 -0.3 3.9 23.1 7.6 -9.8 69.3 2.4 2.1 2.14 4.98 1.26 1.13 -3.1 -0.1 -0.1 3.6 3.6 -5.7 -0.8
Malta
November 2010
2004 0.4 11,276 4.5 0.7 2.4 -0.8 7.4 -4.7 72.3 1.9 2.6 2.16 4.68 1.36 1.24 -6.0 -0.3 -0.2 3.6 3.7 -0.3 2.5
2005 0.4 11,867 4.8 3.9 2.3 12.1 7.2 -2.9 70.1 3.4 2.6 2.49 4.57 1.18 1.24 -8.8 -0.4 -0.3 3.7 4.0 3.7 5.7
2006 0.4 12,628 5.1 3.6 0.6 5.1 7.1 -2.6 63.7 0.8 2.5 3.73 4.32 1.32 1.26 -9.2 -0.5 -0.3 4.5 4.7 20.5 19.1
2007 0.4 13,396 5.5 3.8 2.2 -0.6 6.4 -2.2 61.9 3.1 0.9 4.68 4.73 1.46 1.37 -6.1 -0.3 -0.1 4.9 5.0 10.0 6.3
2008 0.4 13,839 5.7 1.7 5.1 -21.7 5.9 -4.5 63.7 5.0 4.6 2.89 4.81 1.39 1.47 -5.6 -0.3 -0.2 4.7 4.9 -4.0 -2.8
2009 0.4 13,830 5.7 -1.5 1.3 -18.8 6.9 -3.8 69.1 -0.4 1.7 0.70 4.54 1.43 1.39 -3.9 -0.2 0.1 4.2 4.1 -11.5 -16.5
2010 0.4 14,308 5.9 1.5 1.1 5.6 7.1 -4.2 70.7 1.9 0.97 4.20 1.33 1.38 -5.7 -0.3 -0.3 4.1 4.4 -0.3 7.6
2011 0.4 14,827 6.2 1.9 1.9 5.7 7.0 -3.8 71.8 2.1 1.37 5.10 1.30 1.31 -6.2 -0.4 -0.4 4.4 4.7 6.7 7.1
7 | Unemployment | % of active pop.
12 Malta 10 Euro area
8 | Current Account | EUR bn
0.5
0.0
8
-0.5
6
Notes and sources
4 2000 2003 2006 2009
-1.0 2000 2003 2006 2009
9 | Unemployment | evol. of fcst
7.6 2010 7.4 2011
10 | Current Account | evol. of fcst
-0.1 2010 2011 -0.2
General: Long-term chart period from 2000 to 2011 unless otherwise stated. All data are from the Central Bank of Malta (BCM, Bank Centrali ta’ Malta) and Eurostat. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: Eurostat. 2 Balance of non-financial public sector, % of GDP. Source: Eurostat. 3 Inflation, annual average variation in harmonised index of consumer prices (HICP) in % (aop). Source: Eurostat. 4 GDP, evolution of 2010 and 2011 forecasts since January 2010. 5 Balance of non-financial public sector, evolution of 2010 and 2011 forecasts since January 2010. 6 Inflation, evolution of 2010 and 2011 forecasts since january 2010. 7 Unemployment, % of active population. Source: Eurostat. 8 Current account balance in EUR bn. Source: Eurostat. 9 Unemployment, evolution of 2010 and 2011 forecasts since January 2010. 10 Current account balance in EUR bn, evolution of 2010 and 2011 forecasts since January 2010.
7.2 -0.3 7.0 -0.4
6.8
6.6 Jan Mar May Jul Sep Nov
-0.5 Jan Mar May Jul Sep Nov
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Notes and Statements PUBLICATION NOTE Consensus forecasts are mean averages of projections of economic forecasters surveyed by FocusEconomics for our monthly publication. Quarterly averages may not correspond to the annual figures due to different forecast panels. The GDP-weighted averages for the world refer to economies surveyed by FocusEconomics on a monthly basis, and include the following countries and regions, comprising more than 90% of total global output: G7 (7 countries): Canada, Japan, United Kingdom and United States; France, Germany and Italy are also Euro area countries. Euro area (16 countries): Austria, Belgium, Cyprus, Finland, Greece, Ireland, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain. Eastern Europe (14 countries): Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Turkey and Ukraine. Asia-Pacific (11 countries): Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam. Latin America (20 countries): Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. Weights are based on market exchange rates and reflect the latest forecasts on GDP growth, inflation and exchange rates. BRIC (4 countries): Brazil, Russia, India, and China. The term was coined by Goldman Sachs in November 2001 and has since been widely adopted in investment and finance. Slovakia and Slovenia are from Eastern Europe publication. For publication and poll dates please refer to FocusEconomics Consensus Forecast Eastern Europe.
November 2010
COPYRIGHT NOTE © Copyright 2009 FocusEconomics S.L. Duplication, reproduction, transmission, publication or redistribution in any form or by any means electronic, mechanical, or otherwise without prior written consent of FocusEconomics S.L. is strictly prohibited. Please cite source when quoting. All rights reserved under International Copyright Conventions. The FocusEconomics Consensus Forecast - Major Economies is a monthly publication of FocusEconomics. Communications to the Editor or FocusEconomics in general should be addressed as follows: FocusEconomics S.L. Gran Via 657 E-08010 Barcelona Spain tel: +34 932 651 040 fax: +34 932 650 804 e-mail:
[email protected] web: http://www.focus-economics.com
DISCLOSURE STATEMENT The FocusEconomics Consensus Forecast – Euro Area (“Forecast”) is based on information obtained from sources believed to be reliable. FocusEconomics and the participating panellists (“Information Providers”) do not guarantee that the information supplied in the Forecast is accurate, complete or timely. The Information Providers do not make any warranties with regard to the results obtained from the Forecast. The Information Providers are not responsible for any errors or omissions, or for any injuries or damages resulting from the use of this information, including incidental and consequential damages. Recipients should not regard the Forecast as a substitute for the exercise of their own judgement. The recommendations made in the Forecast may be unsuitable for investors depending on their specific investment objectives and financial position. The Forecast has been prepared solely for informational purposes and is not a solicitation of any transaction or an offer to enter into any transaction. Any opinions expressed in this report are subject to change without notice and the Information Providers are under no obligation to update the information contained herein. FocusEconomics Consensus Forecast
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November 2010
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