November 19, 2012
http://www.sgresearch.com
The muddle-through policy setting has been an additional headwind to debt deleveraging, with the resulting uncertainty delaying consumption, investment and hiring decisions.
Extrapolating this configuration over time, the result is deep and protracted economic weakness that even aggressive central bank action would struggle to avert1. With the expiration date for muddle through quickly approaching, 2013-14 marks an inflection point.
Our new Global Economic Outlook (GEO) 2013-17 makes the critical assumption that policy setting will strengthen, significantly reducing policy uncertainty over the coming period, notably for the US and euro area. This will be a positive for growth, but will not remove the drag from austerity and private sector deleveraging. As a result, our US growth forecast remains below consensus for H1 13, but with a lift higher once Fiscal Cliff uncertainty is removed. In the euro area, we expect austerity to be extended beyond 2013 as targets are missed, placing our 2014 forecast well below consensus. Looking out to 2015, lesser austerity and clarity on a new institutional framework for the euro area should bring sustainable recovery. For Asia, we see a cyclical bounce over the coming quarters but our long held view of structurally slower growth keeps us below consensus medium-term. For Emerging Europe, our more positive view on Poland sets us apart as we look for this economy to engage the convergence path previously witnessed in the Czech Republic and Slovakia.
MARCUSSEN Michala
No comments:
Post a Comment