CONSENSUS FORECAST - FocusEconomics · PDF file 2017-11-06 · outside the Eurozone....

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Transcript of CONSENSUS FORECAST - FocusEconomics · PDF file 2017-11-06 · outside the Eurozone....

  • CONSENSUS FORECAST

    SUMMARY 2 CALENDAR 15 EURO AREA 17 GERMANY 32 FRANCE 44 ITALY 57 SPAIN 69 AUSTRIA 80 BELGIUM 88 ESTONIA 96 FINLAND 103 GREECE 111 IRELAND 120 LATVIA 129 LITHUANIA 135 NETHERLANDS 141 PORTUGAL 149 SLOVAKIA 157 SLOVENIA 163 CYPRUS 169 LUXEMBOURG 172 MALTA 175 NOTES 178

    Contributors

    PUBLICATION DATE 31 March 2015 FORECASTS COLLECTED 24 March - 30 March 2015

    INFORMATION AVAILABLE Up to and including 30 March 2015 NEXT EDITION 5 May 2015

    Euro area • April 2015

    ARNE POHLMAN Chief Economist ARMANDO CICCARELLI Head of Research RICARDO ACEVES Senior Economist RICARD TORNÉ Senior Economist OLGA COSCODAN Economist

    CARL KELLY Economist TERESA KERSTING Economist DIRINA MANÇELLARI Economist ANGELA BOUZANIS Economist CECILIA SIMKIEVICH Economist

    ROBERT HILL Economist ERIC DENIS Economist MIRIAM DOWD Editor

  • FOCUSECONOMICS Summary

    FocusEconomics Consensus Forecast | 2

    April 2015

    Summary REAL SECTOR | Greece submits list of reforms, agreement with European leaders pending Greece’s relationship with the rest of the Eurozone deteriorated in recent days at a time when the country is running out of cash. On 27 March, Greece submitted a list of reforms, which the Eurogroup is expected to evaluate this week. Although the Greek government conceded to retain an unpopular property tax in the plan and to increase the value-added tax for Greek islands, the list failed to include reforms to labor laws and the pension system. It remains to be seen whether an agreement regarding the set of reforms will be sufficient for Athens to unlock much-needed external financing, or whether the Greek government will have to implement further reforms and push legislation through parliament. If European leaders merely seeing the set of reforms provided by the Greek government proves to be sufficient, this would represent a major concession for Greece. Conversely, if detailed reforms are not agreed upon soon, the political stalemate will be prolonged, capital controls are likely to be imposed in Greece, and the Greek government will go into arrears on its obligations to the IMF and the ECB in the coming months. Under this scenario, Greece would likely enter back into recession and the primary budget would return to deficit, which would put pressure on the SYRIZA- led government to shift its economic policy.

    Against this backdrop of uncertainty, Greek households and businesses pulled EUR 7.6 billion out of their bank accounts in February, driving deposit levels down to EUR 140.5 billion (February 2014: EUR 160.5 billion), which is the lowest level since March 2005. Although the withdrawals were smaller to those in January (EUR 12.2 billion), the nearly EUR 20 billion extracted from bank accounts in the first two months of the year reflects the serious risk that Greece could reach a full-scale bank run before the Greek government comes to an agreement with Eurozone leaders to extend its EUR 240 billion bailout to June.

    Despite the headwinds that Greece’s latest cash crisis has caused, more signs have emerged that the Eurozone economy is strengthening. Detailed data show that the region’s GDP improved in the fourth quarter of 2014. Although the improvement in Q4 was marginal relative to the growth rate registered in the previous quarter, recent data provide further evidence that the bloc’s economy is gaining momentum at the outset of 2015. The composite PMI—a closely-watched leading indicator—rose to the highest level in nearly four years in March and confidence regarding improving economic prospects in the Eurozone

    Regional outlook improves

    -2

    -1

    0

    1

    2

    Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 0.8

    1.2

    1.6

    2.0

    Nov Feb May Aug Nov Feb

    2015 2016

    Euro Area Economic Growth Change in GDP forecasts

    Note: GDP, real annual variation in %, Q1 2012 - Q4 2016.

    Note: GDP, evolution of 2015 and 2016 forecasts during the last 18 months.

  • FOCUSECONOMICS Summary

    FocusEconomics Consensus Forecast | 3

    April 2015

    strengthened further in the same month. Moreover, the recent slide of the euro should provide support for European export-oriented manufacturers, while borrowers will benefit from the ECB’s ultra- loose monetary policy.

    OUTLOOK | Outlook improves on start of QE program and more upbeat economic data The European Central Bank (ECB) began its bond-buying program—also known as quantitative easing (QE)—in the secondary market on 9 March. The program that the ECB launched on 22 January is expected to revive the Euro area economy and lift inflation. Although analysts remain cautious regarding whether the QE program will effectively fuel economic growth in the common currency area, the current slide of the euro against the U.S. dollar, lower oil prices and easing fiscal austerity will support growth in the Eurozone.

    The FocusEconomics panel is becoming more optimistic regarding the outlook for the Eurozone economy. Analysts polled this month raised their 2015 GDP growth forecasts again, this time by 0.1 percentage points over the previous month, and they now see the regional economy expanding 1.3%. April’s result mainly reflects rising optimism regarding the ECB QE program as well as an improvement in recent economic data. At a country level, the improving economic outlook for the region reflects upward revisions for 6 of the 19 economies surveyed, including key players such as France, Germany, and Spain. The forecasts for 7 economies were left unchanged, while projections for the remaining 6 economies were cut. Forecasters also raised their 2016 regional GDP growth forecast this month to 1.7% from the 1.6% that was expected last month.

    Cyprus and Finland are expected to be the weakest links in 2015, with a projected expansion of 0.3% and 0.5%, respectively. At the other end of the range, Ireland is expected to be the strongest performer with 3.6% growth, followed by Malta with a 2.8% increase. Looking at the region’s major economies, Spain continues to outperform its European peers with an expected GDP growth of 2.3%, followed by Europe’s powerhouse Germany with a 1.8% expansion. Meanwhile, panelists raised France’s growth prospects in April to 1.0%, while Italy’s projection was left unchanged at last month’s 0.5%.

    GREECE | Government presents list of reforms, but the country’s future is still uncertain The Greek economy grew in 2014 for the first time in six years, largely on the back of a recovery in private consumption and the external sector. However, Greece’s future is shrouded in uncertainty. The country is at the brink of bankruptcy and desperately needs additional financing from its European lenders. On 27 March, Prime Minister Alexis Tspiras presented Greece’s newest reform plan, which includes previously-discussed measures to reduce corruption and tax evasion. Tsipras also conceded to retain an unpopular property tax and increase the value added tax for Greek islands, although the proposal did not touch on reforms to the pension system or labor laws. Further discussions with troika

    -8

    -4

    0

    4

    Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 2

    3

    4

    5

    Nov Feb May Aug Nov Feb

    2015 2016

    Greece Economic Growth Change in GDP forecasts

    Note: GDP, real annual variation in %, Q1 2012 - Q4 2016.

    Note: GDP, evolution of 2015 and 2016 forecasts during the last 18 months.

    Change in GDP Growth Forecasts 20162015

    -0.3 -0.2 -0.1 0.0 0.1 0.2 0.3

    Austria

    Finland

    Ireland

    Italy

    Belgium

    Euro area

    France

    Netherlands

    Spain

    Germany

    -0.2 -0.1 0.0 0.1 0.2 0.3

    Austria

    France

    Italy

    Belgium

    Euro area

    Netherlands

    Germany

    Finland

    Ireland

    Spain

    Note: Change between April 2015 and March 2015 in percentage points. .

    . Source: FocusEconomics Consensus Forecast.

  • FOCUSECONOMICS Summary

    FocusEconomics Consensus Forecast | 4

    April 2015

    representatives are slated for this week, but at this point it is unlikely the latest plan will be enough to cement a deal and allow Greece to receive bailout extension funding.

    Looking forward, Greece’s outlook is deteriorating rapidly. The government’s funding gap is weighing heavily on the forecast and political tensions are rising in the country. Further, large downside risks of another election or even a ”grexit” from the Eurozone still loom. FocusEconomics Consensus panelists expect the economy to expand 0.9% in 2015, which is down 0.7 percentage points from last month’s forecast. For 2016, the panel sees the economy growing 2.3%. (see details on page 111)

    GERMANY | Economic activity remains strong at the outset of the year, prospects are bright Germany ended 2014 on a very strong note. Private consumption was the main anchor of growth in 2014, helped by the significant decline in the global oil price. Data for Q1 are somewhat mixed, but suggest overall that Germany remains on a solid growth track. Industrial production growth moderated and exports shrank in January, but business sentiment and the composite PMI improved again in March and the consumer confidence indicator reached an over-thirteen-year high in April. Finance Minister Wolfgang Schäuble presented amendments to this year’s budget, the draft 2016 budget and fiscal plans up to 2019 on 18 March. The key policy measure is an increase in pub