LONG-TERM ECONOMIC FORECASTS
In addition to their annual forecasts, we regularly ask our country panellists to provide longer-term forecasts for the next 5 to 10 years. We undertake these special surveys across our publications Consensus Forecasts, Asia Pacific Consensus Forecasts, Latin American Consensus Forecasts and Eastern Europe Consensus Forecasts twice a year and the resulting tables and analysis are displayed in both the hard-copy and PDF versions of the publications.
Long-term forecasts are updated every April and October (in Consensus Forecasts, Asia Pacific Consensus Forecasts and Latin American Consensus Forecasts) and March and September (in Eastern Europe Consensus Forecasts) for each of the countries listed below.
| Consensus Forecasts | Asia Pacific Consensus Forecasts |
Latin American Consensus Forecasts |
Eastern Europe Consensus Forecasts |
|---|---|---|---|
| United States | Australia | Argentina | Czech Republic |
| Japan | China | Brazil | Hungary |
| Germany | Hong Kong | Chile | Poland |
| France | India | Mexico | Russia |
| United Kingdom | Indonesia | Venezuela | Turkey |
| Italy | Japan | Colombia | Bulgaria |
| Canada | Malaysia | Peru | Croatia |
| Euro zone | New Zealand | Estonia | |
| Netherlands | Philippines | Latvia | |
| Norway | Singapore | Lithuania | |
| Spain | South Korea | Romania | |
| Sweden | Taiwan | Slovakia | |
| Switzerland | Thailand | Slovenia | |
| Ukraine |
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The table below shows a portion of the data from one of our surveys for Long-Term forecasts in Germany (from our October 2010Consensus Forecasts survey) and the text below is taken from the same source.
| GERMANY | |||||||||||
| * % change over previous year | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016-20201 |
| Gross Domestic Product* | 3.4 | 2.7 | 1.0 | -4.7 | 3.3 | 2.0 | 1.8 | 1.8 | 1.7 | 1.6 | 1.5 |
| Private Consumption* | 1.4 | -0.2 | 0.7 | -0.2 | 0.0 | 1.2 | 1.2 | 1.3 | 1.1 | 1.1 | 0.9 |
| Mach. & Equip. Investment* | 11.7 | 10.7 | 3.5 | -22.6 | 8.0 | 6.4 | 3.8 | 3.9 | 3.3 | 3.1 | 2.8 |
| Industrial Production* | 5.7 | 5.9 | -0.1 | -15.4 | 9.7 | 4.2 | 2.9 | 2.9 | 2.8 | 2.2 | 2.2 |
| Consumer Prices* | 1.6 | 2.3 | 2.6 | 0.4 | 1.1 | 1.4 | 1.6 | 1.7 | 1.8 | 1.8 | 1.7 |
| Current Account (Euro bn) | 150 | 185 | 167 | 117 | 128 | 139 | 148 | 137 | 130 | 126 | 107 |
| 10-Yr Treasury Bond Yield, %2 | 4.0 | 4.3 | 3.0 | 3.4 | 2.43 | 3.04 | 3.7 | 4.0 | 4.1 | 4.3 | 4.1 |
1 Signifies average for period. 2 End period. 3 End Jan. 2011. 4 End Oct. 2011
When compared with our panels’ Long-Term Forecasts in April 2010, latest expectations point to an even sharper slowdown in G-7 and Western European GDP growth next year than initially predicted. Following the 2009 global recession, the hope had been for an entrenched recovery but this has proved difficult to sustain. In addition to accumulated housing and bank debt (which triggered the 2008 financial freefall in the first place), governments took on huge financing burdens as they introduced fiscal stimulus measures in order to prop up activity. The US, for example, racked up a US$1.413tn Federal budget deficit in FY2009, a large chunk of which was attributed to the sizeable recovery package. With growth in all but a few countries remaining lacklustre, the authorities are finding it increasingly difficult to meet their debt obligations. As a result, economies like Germany, France, the UK, Italy, Spain and others are introducing austerity measures. Given that these reforms are likely to take a few years to implement (and perhaps longer to actually impact on their respective economies), their effect can be factored into the medium- and long-term outlook. Indeed, while our US forecasters are predicting a return to pre-crisis rates of growth in 2012, the expansion is expected to slow again after 2015. Canada’s GDP forecast over the next 5-10 years follows a similar pattern. However, North American growth remains positioned above the pace predicted for Japanese, German, French, Italian and Euro zone activity. One reason for this is that the US and Canada have generally enjoyed relatively stronger productivity cycles and flexible labour and price markets. Moreover, Western Europe faces a looming fiscal crunch in the face of an aging working population and low post-war birth rates. Reforms to social security are finally being debated by policymakers, despite stiff opposition from unions (particularly in France and Spain). Economies such as the UK are seeking to rebalance their economies away from the public sector, leading to a slow, painful readjustment process, and this is negatively impacting on the forecast horizon.
A portion of text from Consensus Forecasts October 11, 2010