Comparative Economic Projections
for 2014 and beyond
Webinar presentation by the
Council for
Multilateral
Business
Diplomacy
11 February 2014
Comparative Economic Projections
for 2014 and beyond
•
Perspectives and Context – an overview of relative economic size and growth
•
International Governmental Organizations that provide economic projections
– Descriptions of the IMF, World Bank, OECD and UN DESA programs
– Most recent projections: Outcomes and Implications
•
Comparisons of Current Country Projections to 2015 and Extensions to 2020
– Projections to 2015, top 10 economies, by the IMF, World Bank, OECD and UN
DESA
– Extended projections to 2020 for USA, China, Japan, Germany, France, UK,
Brazil, Italy
Perspectives and Context
•
The economy of the United States, with a current GDP of over 16 trillion dollars, is the world’s largest. It is about twice the
size of the second largest economy, China, which has a GDP of about 8.3 trillion US dollars. About 6 times in per capita terms
•
Between 2000 and 2011, the economy of China expanded at an average annual rate more than 6 times that of the United
States. Going forward, with China’s economy growing at 7 percent per year, and the US economy growing at 3 percent per
year, the economy of China will be the larger by the year 2030.
•
The 3rd and 4th largest economies are those of Japan ( $6 trillion) and Germany ( $3.4 trillion). Both of these economies are
expected to grow slowly in the future on account of aging and declining populations.
•
The 5th, 6th, 7th, 8th and 9th largest economies; France, United Kingdom, Brazil, Russia and Italy, are all clustered between 2
and 3 trillion US dollars, as measured by GDP. Differences in growth rates will result in a shuffling within those ranks in the
next few years. India is the 10th largest economy with a GDP of about $1.8 trillion and growing fast.
This map shows the relative sizes of country economies in 2011
Perspectives and Context
•
A one percentage point increase in the GDP of the United States is as large as the entire GDP of Romania
or Viet Nam. A three percent increase in the GDP of the United States is as large as the entire GDP of
Poland or Belgium.
•
India is the 10th largest economy, with a current GDP of 1.8 trillion US dollars. It is a bit more than 10
percent as large as the US economy, but with about 3 times as many people. A 6 percent growth in India’s
GDP is roughly equivalent to the entire GDP of Bangladesh or Angola.
•
Within many of the world’s largest economies, exports have been expanding at rates at least as great as
the rates of overall GDP growth.
This map shows rates of growth in GDP by country in 2011
Economic Growth
and Business Opportunity
Growth has implications for
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Sales
Marketing
Sourcing
Production
Combined with other key factors
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Political stability
Taxes
Laws and customs
Human resources
International Governmental Organizations
that produce economic projections
International Monetary Fund
The World Bank Group
Organization for Economic
Cooperation and Development
United Nations Department of
Economic and Social Affairs
International
Monetary Fund
World Economic Outlook
International Monetary Fund
World Economic Outlook
•
Coverage
189 Countries; 44 indicators related to GDP in current and constant prices; inflation; savings and investment;
exports and imports; government receipts, expenditures and debt; and employment and unemployment
•
Forecast Horizon
Annual projections to 2018 are provided in the WEO database; growth rates to 2015 are published in current
the WEO reports. Much of the detailed, near-term analysis is focused on quarterly data.
•
Methodology
Country level projections are produced by country teams. The country level projections are aggregated and
revised through an iterative process. The methodologies employed vary from country to country and the
forecasts depend on a variety of factors specific to each country
•
Release schedule
The WEO database and publication are updated and published twice a year, usually in April and September or
October, in support of the meetings of the International Monetary and Financial Committee. The WEO forms
the main instrument of the IMF's global surveillance activities. The WEO Update covers key WEO projections
and is published in between the full Spring and Fall WEO reports. The most recent release was 21 January
2014.
•
Other
The chief economist is Olivier Blanchard.
International Monetary Fund
World Economic Outlook
Release notes – 21 January 2014
General Remarks
The world economy strengthened during the second half of 2013, as predicted in
the previous IMF outlook report
As the advanced economies continue to recover, further improvements in the
world economy are expected for 2014-2015
Global growth will be about 3.7 percent in 2014, and 3.9 percent in 2015
Downside risks remain for some economies, growth projections for which have
been revised downwards
International Monetary Fund
World Economic Outlook
Release notes: 21 January 2014
•
United States
Growth is expected to be 2.8 percent in 2014, up from 1.9 percent in 2013, led by an uptick in inventories in
the second half of 2013, carried further by stronger final domestic demand and the confidence borne out of
the recent budget agreement. However, maintenance of the sequester cuts may constrain growth going
forward. The growth projection for 2015 is 3.0 percent, down from the 3.4 percent in the October 2013
forecast.
•
The euro area
The euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent
in 2014 and 1.4 percent in 2015, but the recovery will be uneven. The pickup will generally be more modest in
economies under stress, despite some upward revisions.
•
United Kingdom
The United Kingdom has been buoyed by easier credit conditions and increased confidence. Growth is
expected to average 2.25 percent in 2014–15, but economic slack will remain high.
•
Japan
Slower growth is projected for Japan, compared to earlier releases of the WEO. The consumption tax increase
created a drag that is partly offset by temporary fiscal stimulus. Hence the growth projection for 2014 is 1.7
percent, and for 2015 it is slower, at 1 percent.
International Monetary Fund
World Economic Outlook
Release notes – 21 January 2014
•
China
Growth in China rebounded strongly in the second half of 2013, due largely to an acceleration in investment.
This surge is expected to be temporary, in part because of policy measures aimed at slowing credit growth and
raising the cost of capital. Growth is thus expected to moderate slightly to around 7.5 percent in 2014–15.
•
India
India’s growth has been fostered by strong demand for
exports, and policies that encourage investment. India’s
economy has also benefited from favorable weather
conditions. Growth rates: 2013 4.4%; 2014 5.4%; 2015 6.5%.
•
Other Emerging Economies
Emerging market and developing economies have started to
benefit from stronger import demand in advanced
economies and China. In many, however, domestic demand
has remained weaker than expected, due in some cases to
tighter financial conditions and policies since mid-2013, to
policy or political uncertainty and bottlenecks in others,
hampering investment growth.
•
The World Economy
Global growth is projected to increase from 3
percent in 2013 to 3.7 percent in 2014 and
3.9 percent in 2015.
International Monetary Fund
World Economic Outlook
Most recent release – 21 January 2014
The World Bank Group
Global Economic Prospects
The World Bank Group
Global Economic Prospects
•
Coverage
The GEP analyses are based on a large volume of high-frequency data, with a focus on industrial output,
inflation, trade, and international finance data for some 100 developing countries – including short-term (6
month) forecasts for some of these variables -- are used to help evaluate the international economic climate.
Regional forecasts are constructed on the basis of approximately 160 separate country-specific forecasts.
•
Horizon
The time horizon in the latest published Global Economic Prospects release is 2016.
•
Methodology
The country-specific forecasts are prepared by the World Bank Development Prospects Group in conjunction
with World Bank country experts. Country level results are aggregated and revised in a broader model of the
global economy. The medium-term forecasts are largely driven by the international investment cycle,
macroeconomic policy considerations and other cyclical forces.
•
Release schedule
World Bank global economic forecasts are published twice yearly, in January and June. The main Global
Economic Prospects report and its several regional and topical annexes, are available as electronic documents,
and their content are replicated in interactive on-line databases.
•
Other
Chief Economist is Kaushik Basu
The World Bank Group
Global Economic Prospects
Release notes: January 2014 -- General Remarks
“For the first time in five years, there are indications that a self-sustaining recovery has begun among highincome countries
suggesting that they may now join developing countries as a second engine of growth in the global economy.
The stronger growth in high-income countries reflects progress in both private- and public-sector healing in the
wake of the financial crisis.
In particular, the drag from fiscal consolidation and policy uncertainty is expected to ease sharply in the
United States and in high-income Europe.
The stronger growth in rich countries is expected to boost demand for the exports of developing countries and
contribute to a modest acceleration in their growth.
Overall, global trade growth which has been particularly weak is expected to strengthen over next few years
reaching about 5.1 percent by 2016.”
Kaushik Basu, Chief Economist, the World Bank Group
The World Bank Group
Global Economic Prospects
•
Release notes: January 2014 – High Income Countries
United States
The recovery is the most advanced in the United States. GDP there has grown for 10 consecutive quarters (as of
Q3, 2013) and is now 5.6 percent higher than it was in the pre-crisis period. The drag from higher long-term
interest rates, fiscal uncertainty, and the government shutdown have delayed but not derailed the recovery.
•
Japan
The economy has responded to strong fiscal and monetary stimulus with robust growth, rising inflation, and a
substantial depreciation of the currency that has boosted exports. Output is nearly at par with the pre-crisis
peak. Activity has rebounded from the 3rd quarter 2013 slump, with momentum gaining additional strength in
the fourth quarter as consumers frontload spending ahead of the upcoming consumption tax increase in April
2014.
•
Euro area
The Euro Area is out of recession but per capita incomes are still declining in several countries. Growth turned
positive in the second quarter of 2013 led by stronger growth in Germany. In addition, output in the troubled
Southern European periphery economies has also strengthened. Three of the five high-spread economies Ireland, Portugal and Spain - exited recession during 2013, helped by strong export growth, while the
recession is easing in the other two (Italy and Greece). Euro Area output remains well below pre-crisis levels
and 10 or more percent below pre-crisis levels in some of the hardest-hit countries of the area.
The World Bank Group
Global Economic Prospects
Release notes: January 2014 – Developing Countries
•
Growth began to strengthen in the second and third quarters of 2013
•
The recovery has been uneven, however, with GDP growth accelerations in China, India, Malaysia,
Thailand and Mexico in the third quarter offsetting softness in South Africa, Turkey, Indonesia and
contraction in Brazil.
•
Manufacturing data for developing countries has continued to show sustained expansion in four of five
regions where data are available
•
The improvement partly reflects strengthening high -income economies and rising demand in China
•
Developing-country exports (excluding China) grew at a 11.2 percent pace during the three months
ending October 2013, the fastest in seven months.
The World Bank Group
Global Economic Prospects
Most recent release – January 2014
Organization for
Economic
Cooperation
and Development
Economic Outlook
Organization for Economic
Cooperation and Development
Economic Outlook
•
Coverage
OECD Member Countries, of which there are 33, plus Brazil, Russia, India, China, South Africa and Indonesia –
39 countries
•
Horizon
Projections in the published materials run to 2015.
•
Methodology
The OECD’s forecasts combine expert judgment with a variety of existing and new information relevant to
current and prospective developments. These include revised policy settings, recent statistical outturns and
conjectural indicators, combined with analyses based on specific economic and statistical models and
analytical techniques. Projections are first made using the ”NIGEM global model” of the British National
Institute of Economic and Social Research, and short-term indicator models. The results from these models
provide a backdrop for analyses undertaken using individual country models.
•
Release schedule
The OECD Economic Outlook is released twice a year, in April or May, and in October or November.
•
Other
The chief economist at the OECD is Pier Carlo Padoan.
Organization for Economic
Cooperation and Development
Release notes – November 2013
•
Overview
The global economy continues to expand at a moderate pace, with some acceleration of growth anticipated in
2014 and 2015. But global growth forecasts have been revised down significantly for this year and 2014, in
large part due to weaker prospects in many emerging market economies (EMEs). Downside risks dominate and
policy must address them.
•
United States
The strengthening recovery in the United States should gradually reduce unemployment and erode economic
slack, with inflation rising close to targets.
•
Euro area
The muted pick-up in the euro area will make little dent in high levels of joblessness and ample slack will keep
inflation very low. In the euro area, recovery is lagging and uneven, unemployment – especially among the
young – remains very high and inflationary pressures are very subdued. The ECB should consider further policy
measures if deflationary risks become more serious.
•
Japan
Core inflation is set to turn positive but, abstracting from indirect tax effects, still remain well below its target.
the initial impact of new monetary, fiscal and structural policies has produced strong export growth, rising
consumer spending and a rebound in business investment. The increase in the consumption tax rate to 8% is
welcome and should be followed by a further hike as planned in 2015.
Organization for Economic
Cooperation and Development
Most recent release – November 2013
UN Department of
Economic
and Social Affairs
World Economic Situation
and Prospects
UN Department of Economic
and Social Affairs
•
Coverage
The World Economic Situation and Prospects report provides estimates of real GDP growth, unemployment
rates and inflation rates for about 80 developed, developing and transition economies.
•
Forecast Horizon
Projections in the current World Economic Situation and Prospects report extend to 2015.
•
Methodology
Project LINK is an international collaborative research group for econometric modeling, coordinated jointly by
the Development Policy and Analysis Division of UN/DESA and the University of Toronto.
•
Release schedule
The WESP is published twice a year, in January and June.
•
Other
•
The chief economist responsible for the WESP is Dr. Pingfan Hong.
UN Department of Economic
and Social Affairs
UN Department of Economic
and Social Affairs
Most recent release – 14 January 2014
World Economic Growth
2012 - 2015
•World Gross Product in 2012 was between 71 and 73 trillion US dollars.
•Growth of 0.1 percent is equivalent in size to the entire economy of Saudi
Arabia or the Netherlands.
•Growth of 0.1 percent is equivalent in size to one and a half times the total
revenue (sales) of the world’s largest companies, like Walmart, Shell, and
ExxonMobil
Comparisons of Projections to 2015
and Extensions to 2020
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•
•
•
United States
China
Japan
Germany
•
•
•
•
France
United Kingdom
Brazil
Italy
Projection Comparison
United States
real annual GDP growth, percent
2012
2013
2014
2015
IMF
2.8
1.9
2.8
3.0
World
Bank
2.7
1.8
2.8
2.9
OECD
2.8
1.7
2.9
3.4
UN
DESA
2.8
1.6
2.5
3.2
HRI
2.8
1.8
2.9
3.0
HRI 2015 – 2020: 2.5 avg. per year
Projection Comparison
United States
real annual GDP growth, percent
2012
2013
2014
2015
IMF
2.8
1.9
2.8
3.0
World
Bank
2.7
1.8
2.8
2.9
OECD
2.8
1.7
2.9
3.4
UN
DESA
2.8
1.6
2.5
3.2
HRI
2.8
1.8
2.9
3.0
HRI 2015 – 2020: 2.5 avg. per year
Projection Comparison
China
real annual GDP growth, percent
2012
2013
2014
2015
IMF
7.7
7.7
7.5
7.3
World
Bank
7.7
7.7
7.7
7.5
OECD
7.7
7.7
8.2
7.5
UN
DESA
7.7
7.7
7.5
7.3
HRI
7.7
7.8
8.0
7.9
HRI 2015 – 2020: 7.3 avg. per year
Projection Comparison
China
real annual GDP growth, percent
2012
2013
2014
2015
IMF
7.7
7.7
7.5
7.3
World
Bank
7.7
7.7
7.7
7.5
OECD
7.7
7.7
8.2
7.5
UN
DESA
7.7
7.7
7.5
7.3
HRI
7.7
7.8
8.0
7.9
HRI 2015 – 2020: 7.3 avg. per year
Projection Comparison
Japan
real annual GDP growth, percent
2012
2013
2014
2015
IMF
1.4
1.7
1.7
1.0
World
Bank
1.9
1.7
1.4
1.2
OECD
1.9
1.8
1.5
1.0
UN
DESA
1.9
1.9
1.5
1.2
HRI
2.0
1.6
1.4
1.3
HRI 2015 – 2020: 1.3 avg. per year
Projection Comparison
Japan
real annual GDP growth, percent
2012
2013
2014
2015
IMF
1.4
1.7
1.7
1.0
World
Bank
1.9
1.7
1.4
1.2
OECD
1.9
1.8
1.5
1.0
UN
DESA
1.9
1.9
1.5
1.2
HRI
2.0
1.6
1.4
1.3
HRI 2015 – 2020: 1.3 avg. per year
Projection Comparison
Germany
real annual GDP growth, percent
2012
2013
2014
2015
0.9
0.5
1.6
1.4
OECD
0.9
0.5
1.7
2.0
UN
DESA
0.7
0.4
1.9
1.9
HRI
0.9
0.4
1.7
1.9
IMF
World
Bank
HRI 2015 – 2020: 0.6 avg. per year
Projection Comparison
Germany
real annual GDP growth, percent
2012
2013
2014
2015
0.9
0.5
1.6
1.4
OECD
0.9
0.5
1.7
2.0
UN
DESA
0.7
0.4
1.9
1.9
HRI
0.9
0.4
1.7
1.9
IMF
World
Bank
HRI 2015 – 2020: 0.6 avg. per year
Projection Comparison
Germany
real annual GDP growth, percent
2012
2013
2014
2015
0.9
0.5
1.6
1.4
OECD
0.9
0.5
1.7
2.0
UN
DESA
0.7
0.4
1.9
1.9
HRI
0.9
0.4
1.7
1.9
IMF
World
Bank
HRI 2015 – 2020: 0.6 avg. per year
Projection Comparison
France
real annual GDP growth, percent
2012
2013
2014
2015
0.0
0.2
0.9
1.5
OECD
0.0
0.2
1.0
1.6
UN
DESA
0.0
0.1
0.8
1.1
HRI
0.0
0.2
1.0
1.4
IMF
World
Bank
HRI 2015 – 2020: 1.5 avg. per year
Projection Comparison
United Kingdom
real annual GDP growth, percent
2012
2013
2014
2015
0.3
1.7
2.4
2.2
OECD
0.1
1.4
2.4
2.5
UN
DESA
0.1
1.4
2.2
2.4
HRI
0.2
1.4
1.8
2.0
IMF
World
Bank
HRI 2015 – 2020: 2.0 avg. per year
Projection Comparison
Brazil
real annual GDP growth, percent
2012
2013
2014
2015
IMF
1.0
2.3
2.3
2.8
World
Bank
0.9
2.2
2.4
2.7
OECD
0.9
2.5
2.2
2.5
UN
DESA
0.9
2.5
3.0
4.2
HRI
0.9
2.9
3.4
3.1
HRI 2015 – 2020: 2.9 avg. per year
Projection Comparison
Italy
real annual GDP growth, percent
2012
2013
2014
2015
-2.5
-1.8
0.6
1.1
OECD
-2.6
-1.9
0.6
1.4
UN
DESA
-2.5
-1.8
0.8
1.4
HRI
-2.5
-1.8
0.7
0.9
IMF
World
Bank
HRI 2015 – 2020: 1.6 avg. per year
Projection Comparison
Thank You
For questions and comments concerning the
content of this presentation please contact
Ralph Doggett
HRI/CMBD
rdoggett@hrigeneva.com
rdoggett@cmbd.ch
+41 78 895 8485