Après le référendum sur le Brexit, le 23 juin 2016, l’économie britannique a suivi une dynamique plus réduite. Cela a reflété notamment des changements d’anticipations sur ce qui se passera pendant et après les négociations, mieux vaut attendre que de s’engager trop vite, et des coûts d’opportunité puisque le Brexit a incité les entreprises et les investisseurs à regarder dans d’autres pays non affectés par les effets directs du référendum.
Ce changement de dynamique est visible dans le graphe ci-dessous. J’ai calculé une tendance de 2013 jusqu’au 2ème trimestre 2016. Je l’ai ensuite prolongée jusqu’au premier trimestre 2018.
L’écart à la tendance s’accroît de façon significative après le référendum. C’est le coût du Brexit pour le Royaume Uni qui a été incapable de prolonger la dynamique d’avant consultation sur la sortie de l’Union Européenne. Lire la suite
Usually a nice chart gives a lot of information. This succession of 9 charts is targeted to give you a very simple but persuasive view on the economic dynamics in the Euro Area.
GDP growth numbers have been stronger than expected for a bunch of countries and for the Euro Area as a whole.
This simultaneity means that the reduction in uncertainty is an important source, an important contribution for this improvement. There are a lot of new institutions that were put in place during the last year. They have dramatically reduced the risk of a Euro burst. So the economic horizon for households and for companies is no more limited by this systemic uncertainty that was perceived a year ago. Nevertheless, this does not mean that we are at the eve of a strong and durable recovery. Companies’ investment is still too low to witness a long lasting recovery. That’s the point to look at in the next couple of quarters. During this period governments have to adopt a more business friendly attitude in order to let the economy improves by itself. It’s not time to change again the global framework if the target is to reduce uncertainty to favor investment and then employment. We don’t need more austerity that can be interpreted as negative shock on the economy. Targeted budget balances have to be conditioned by growth, not the contrary.
The very positive point for the Euro Area outlook can be seen in companies’ surveys. Lire la suite
During the second quarter of this year, Greek GDP was down for the 20th consecutive quarter. Compared to Q2 2012, Q2 2013 figure was down only by -4.6% after -5.6% during the first three months. The pace is slower as it can be seen on the first chart but GDP is still down.
The most problematic issue is that, due to deflation, nominal GDP is decreasing more rapidly that real GDP. This has a very strong consequence on Public Debt to GDP ratio and on Public Deficit to GDP ratio. Lire la suite
In June after its FOMC meeting, the Federal Reserve has published its forecasts for 2013. GDP growth is expected for 2013 to be in the range [2.3 – 2.6%]. The middle of the range is 2.45%.
We then have to compare this number to the result of the first two quarters.
In Q1 GDP growth was 1.1% at annual rate and in Q2 it was 1.7%. This means that the carryover growth at the end of the second quarter is just 1.05%. (carryover growth is the average growth for 2013 if Q3 and Q4 GDP level remains at Q2 level (last known)).
To converge to 2.45% on average for 2013, GDP numbers have to be 7.4% at annual rate both in Q3 and Q4.
Such a sequence has not been seen since the beginning of the 80’s when Ronald Reagan had a very strong program to boost the economy.
The current fiscal policy is conditionned by sequestration and we see that since the beginning of 2010 government expenditures (local and federal) are a drag on GDP growth.
Once again, the Fed’s behavior will be interesting to watch.
Nevertheless as it was mentionned by Tim Duy (@TimDuy), (see here): in the past unemployment rate forecasts were more accurate than GDP forecasts. Even with that in mind the gap will be large and will probably require interpretation by Ben Bernanke.
Even if GDP growth number is positive in Germany and negative in France, GDP profile lacks of momentum in both countries. A detailed analysis will come later during the day but it’s important to have the two profiles in mind
GDP dropped by -0.2% in the first quarter of 2013 . It was the same number during the last quarter of 2012 (numbers are -0.65% and -0.8% at annual rate respectively). Compared to the first quarter of 2010 economic activity is -0.4% lower. Carry Over growth for 2013 was -0.3% at the end of the first quarter.
The most problematic issue on France is the GDP profile. On the chart we see that since the first quarter of 2011 its level is almost unchanged. The main challenge for the government economic policy will to change this profile on the upside as such a trajectory is consistent with a reduction of employment.
Only companies’ investment can change this profile rapidly, but a stable financial and fiscal framework is needed to reduce uncertainty.
GDP was up by 0.1% during the first quarter after a deep drop of -0.7% in the last quarter of 2012 (+0.25 and -2.7% at annual rate respectively). Compared to the first quarter of 2012 GDP level is lower by -0.25% and carry over growth for 2013 is negative at -0.3% at the end of the first quarter.
German GDP profile does not show a strong momentum. It’s weaker than, expected.
More details later
This morning in the United Kingdom the good surprise was the higher than expected growth figure. During the first quarter, GDP was up by 1.2% at annual rate and by 0.6% compared to the first quarter of 2012. Carry over growth for 2013 at the end of the first quarter is between 0.4 and 0.5%.
(To be more precise: GDP figures are published with one decimal. It was 103.2 in Q1 2012 and 103.6 in the first quarter of 2013. This makes 0.4% quarterly change and 1.6 at annual rate. But the official numbers are 0.3 and 1.2%. Published level numbers lack of precision to match official numbers)
Lire la suite