Taking a Turn for the Better - But Not Yet a Fundamental Turn
(Thomson Reuters ONE) -
Press release, 30 January 2012
OP-Pohjola's economists expect the economic situation to turn for the better
during the spring. Recent economic surveys have indicated that there are already
more hopeful signs on the horizon.
Most factors that have slowed down world economic growth are slowly fading away
or their role is becoming less important. OP-Pohjola's economists expect the
world economy to recover within the next 12 months and reach somewhat the same
average growth rate as in 2011.
US economic growth rate has already accelerated, this growth being staid but
relatively steady and broad-based. The Federal Reserve is expected support
economic growth by keeping its key interest rates exceptionally low next year
too. Added uncertainty may be caused by the approaching US presidential election
and the management of public finances.
Growth in emerging economies will stabilise at a good level and is partly
expected to rebound in the course of the year. Economic growth in China will
remain subdued by its own standard during the first half but will pick up in the
course of the year, as a result of economic policy easing.
Short recession in the euro area
OP-Pohjola's economists predict that the euro-area will face a short recession.
Economic trends in the euro area usually follow those of the rest of the world,
and this time is no exception either. In fact, some economic indicators have
already begun to improve.
Chief Economist Reijo Heiskanen points out that the economic recovery will
proceed at a subdued pace and be uneven and uncertain.
- In light of the occasionally slow progress in resolving the European sovereign
debt crisis, we will probably see a weak economic situation in the second half
of the year too. The euro area is going from worse to bad.
- Inflation in the euro area is decelerating but will in the next few years
remain slightly above the ECB's target. Nevertheless, the ECB will this year
continue to conduct an easy monetary policy as a whole, with a view to ensuring
financial market stability. The key rate is expected to vary between 0.75 and
1.0 per cent at the end of the year and the 12-month Euribor rate to drop to
around 1.5 per cent.
Finnish growth rate this year at one per cent
OP-Pohjola's economists project the Finnish economic growth rate to stand at
1.0 per cent this year. The weakest period should be the winter season when the
economy is expected to face a recession. After that, a recovery in the export
market and a cheaper euro should prop up exports. Consumer spending is expected
to grow at a moderate, steady pace but capital spending is anticipated to turn
slightly negative. Next year, the economy should grow at a rate of 2.0 per cent.
Unemployment is anticipated to rise temporarily this year but will, on average,
remain at somewhat the same rate as in the previous year. The inflation rate is
expected to decelerate but is anticipated to stand at over 2 per cent due to tax
hikes.
Mr Heiskanen reckons that, despite the quite hopeful economic outlook, the
Finnish economy will be facing an increasing number of future challenges, given
that the previous economic buffers have been depleted. The balance on current
account has also worsened, showing a deficit. Finland will have to rely on
foreign borrowing to finance its widening fiscal deficit. In the economic
policy, the country will have to take seriously the risk of losing its top
credit rating.
- The greatest risk is still associated with managing the debt crisis. It is
probable that the situation will be kept under control but it is highly possible
that uncertainty may increase occasionally, and we still cannot rule out an
escalation of the crisis.
For more information, please contact: Reijo Heiskanen, Chief Economist, tel.
010 252 8354
OP-Pohjola Group is Finland's leading financial services group providing a
unique range of banking, investment and insurance services. The Group has the
mission of promoting the sustainable prosperity, well-being and security of its
owner-members, customers and operating regions through its local presence. Its
objective is to offer the best and most versatile package of loyal customer
benefits on the market. OP-Pohjola Group consists of some 200 member cooperative
banks and the Group's central institution, OP-Pohjola Group Central Cooperative,
with its subsidiaries and closely-related companies, the largest of which is the
listed company Pohjola Bank plc. With a staff of more than 12,000, OP-Pohjola
Group posted consolidated earnings of 575 million euros before tax in 2010 and
had total assets of 84 billion euros on 31 December 2010. The group has over
four million customers.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Pohjola Pankki Oyj via Thomson Reuters ONE
[HUG#1580908]
Unternehmensinformation / Kurzprofil:
Datum: 30.01.2012 - 09:01 Uhr
Sprache: Deutsch
News-ID 108747
Anzahl Zeichen: 5773
contact information:
Town:
POHJOLA
Kategorie:
Business News
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"Taking a Turn for the Better - But Not Yet a Fundamental Turn"
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