Economic Outlook: Positive with increasing uncertainties
(Thomson Reuters ONE) -
The outlook for the world economy is still positive, but uncertainties are more
pronounced than previously. We still expect the world economy to weather the
storm though mainly because the current growth momentum seems even stronger than
at the beginning of the year.
The Nordic economies are still in the lead. Economic growth in Sweden and Norway
looks set to be strong again this year supported by impressive public and
external balances. But the Swedish and Norwegian central banks also have to hike
interest rates to prevent overheating in the housing and labour markets.
Economic growth in Finland is also strong while Denmark is the laggard, but on
the right track. Both countries are facing slight fiscal policy tightening, but
their public finances are in much better shape than average for the Euro area.
The Swedish economy grew by a record-strong 5.5% in 2010 and GDP will continue
to increase over the forecast horizon albeit at a somewhat slower pace. Exports
benefit from the upswing in global trade and the household economy is in good
shape, supporting private consumption. Investment picked up in 2010 and will
increase further. Employment, already at a record-high level, is seen growing
sharply in 2011 supporting public finances in reaching the target of 1% of GDP
in 2011. Inflation will pick up on the back of rising energy prices and higher
wages, which is why the Riksbank is expected to continue to raise rates.
We still expect fairly strong Norwegian economic growth but have revised down
our unemployment forecast and raised our wage growth forecast for next year.
Core inflation has been lower than expected this year in spite of sharply
increased retailers' purchase prices. With expected strong growth in
consumption, retailers will gradually pass on the costs to consumers. A more
rapid uptick in inflation will lead Norges Bank to hike interest rates more
aggressively than the ECB.
Growth in the Danish economy fell surprisingly in Q4 2010 for the first time
since mid-2009. But a few negative quarters are not unusual and the latest
indicators point to renewed improvement, which is expected to continue during
the forecast period. We believe that growth will be sufficiently high to reduce
unemployment. Ultimately, this could have a decisive impact on the general
election to be held in November this year at the latest.
The outlook for the Finnish economy remains strong, driven by both foreign trade
and domestic demand. Exports benefit from the exceptionally strong performance
of Finland's most important trading partners Germany, Sweden and Russia.
Investment growth will accelerate markedly following the rise in the industrial
capacity utilisation rate. Sharply higher consumer prices will lead to a
slowdown in consumption growth towards the end of the forecast period, despite
the balancing effects of higher employment and an expected fall in household
savings.
The full report is available on www.nordea.com.
For further information:
Helge J. Pedersen, Global Chief Economist, + 45 33 33 31 26
Press release (PDF):
http://hugin.info/1151/R/1516602/452927.pdf
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Source: Nordea via Thomson Reuters ONE
[HUG#1516602]
Unternehmensinformation / Kurzprofil:
Datum: 18.05.2011 - 09:01 Uhr
Sprache: Deutsch
News-ID 54775
Anzahl Zeichen: 3997
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Kategorie:
Business News
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"Economic Outlook: Positive with increasing uncertainties"
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