From Turbulence towards Moderate Growth
(Thomson Reuters ONE) -
Pohjola Pankki Oyj /
From Turbulence towards Moderate Growth
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World economic growth is expected remain more subdued on average during the rest
of the year. Industrialised countries are anticipated to face a near-miss
recession towards the end of the year, as GDP growth almost comes to a halt both
in Western Europe and the USA.
OP-Pohjola's economists estimate that the global economic hiccup will, however,
be short-lived. Global inflation is about to begin to decelerate apace, which
will also brighten growth prospects in emerging economies. The largest emerging
countries also have scope for reviving their economies through both monetary and
fiscal policy measures.
Industrialised countries are still conducting an easy monetary policy, and the
largest economies are anticipated to tighten their fiscal policy only
moderately. With the stabilising market situation, the pace of recovery is
expected to be moderate.
The Federal Reserve has announced that it will keep its key interest rate
unchanged until 2013. The ECB's key rate will not probably begin to rise before
the end of the first half 2012. We anticipate the ECB to raise this rate twice,
reaching 2.00% during the second half of 2012.
Finland's economic growth to nearly grind to a halt
The Finnish economy grew strongly in the first half of 2011, but the early
summer already showed signs of a slowdown as a result of milder export demand.
During the second half, the export market slowdown will also put a strain on
Finnish economic development.
OP-Pohjola's economists forecast that Finland's economic growth will nearly
grind to a halt during the second half of 2011. Nevertheless, the Finnish
economic growth rate is expected to stand at 2.8% this year. Next year,
economic growth is anticipated to reach a fairly good rate, although the annual
average GDP growth rate is expected to stand at 2.3% because of the sluggish
rate early in the year. Our growth forecast for both years is one percentage
point lower than what we predicted last spring.
Inflation is projected to decelerate markedly, as energy and food prices should
stop increasing and interest rate hikes should be smaller than earlier expected.
On average, the inflation rate will slow down from 3.4% this year to 2% next
year.
Unemployment is anticipated to decrease slightly next year and the employment
growth rate to remain slow. Because the Finnish Government plans to front-load
spending cuts, the fiscal balance should improve slowly as expected earlier,
although we have revised down our forecast for the economic growth rate for
2011 and 2012.
Our forecast is based on the view that every effort will be made to solve the
sovereign European debt crisis - as governments agreed to so in the second
bailout package for Greece - and the situation in Italy and Spain will remain
stable. The greatest risk that may undermine this forecast is that managing the
debt crisis will not proceed as hoped for and the situation will only
exacerbate, which at its worst may result in the same kind of panic reaction as
experienced in late 2008.
For further information, please contact Mr Reijo Heiskanen, Chief Economist,
Tel. +358 10 252 8354.
--- End of Message ---
Pohjola Pankki Oyj
POHJOLA Finland
ISIN: FI0009003222;
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Source: Pohjola Pankki Oyj via Thomson Reuters ONE
[HUG#1541506]
Unternehmensinformation / Kurzprofil:
Datum: 29.08.2011 - 09:01 Uhr
Sprache: Deutsch
News-ID 59884
Anzahl Zeichen: 4358
contact information:
Town:
POHJOLA
Kategorie:
Business News
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