Economic environment in 2013
For 2013, we anticipate the following economic conditions:
- At 2.4%, world economic growth slightly exceeds level of previous year
- Austerity measures to improve public finances dampen demand in eurozone and United States
- Growth supported by low interest rates and government stimulus measures in emerging markets
- Slight growth in gross domestic product in European Union (+0.3%)
- U.S. growth slightly below previous year’s level (+1.8%); growth gains some momentum in Asia (excluding Japan) (+6.5%); growth stabilizes in Japan (+1.0%); growth accelerates significantly in South America (+3.7%)
- Oil price averages $110 per barrel for the year
- Average exchange rate of $1.30 per euro
The global economy is likely to grow at a rate of 2.4% in 2013, slightly faster than in 2012 (+2.2%). However, we continue to expect a volatile environment. Austerity measures to improve public finances will continue to dampen demand in the eurozone and the United States. Worldwide economic growth will be bolstered, however, by low interest rates and government stimulus measures in the emerging markets. We anticipate a gradual decline in economic uncertainty and an increase in investor and consumer confidence. For 2013, we assume an average oil price of $110 per barrel and an exchange rate of $1.30 per euro.
Outlook for gross domestic product 2013
(Real change compared with previous year)
Trends in gross domestic product 2013–2015
(Average annual real change)
We anticipate only slight growth (+0.3%) in the European Union in 2013. The recessionary trends in southern Europe will likely slow down and put less of a strain on European trading partners’ export business than in the previous year. We expect the stricter consolidation measures in France to have a negative impact on economic growth. In this environment, the German economy will develop only marginally better (+0.9%) than in 2012. In our forecast, we do not anticipate a re-escalation of the sovereign debt crisis in the eurozone. In the medium term, we expect average annual economic growth of 1.1% for the European Union.
We assume that gross domestic product will grow by 1.8% in the United States in 2013 – approximately the same rate as in the previous year – despite the dampening effects of fiscal policy. Growth had already been weakened in 2012 by the anticipation of austerity measures in public budgets. The real estate market will likely continue to stabilize, due in part to the Federal Reserve’s support program for the mortgage market. Under these conditions, we expect the job market to sustain its gradual improvement. We predict that the U.S. economy will grow by around 2.1% per year in the medium term.
Economic growth in Asia (excluding Japan) is expected to gain some momentum in 2013 (+6.5%). After the previous year’s slowdown, we foresee that the economy in China will once again pick up speed. Expansive fiscal and monetary stimulus measures will support this growth. In light of the gradually improving economic situation in Europe, foreign trade will also contribute more substantially to economic growth in the region. In the medium term, we expect average annual economic growth of 6.7% for the emerging markets of Asia.
We predict that growth in Japan will once again stabilize in 2013 (+1.0%), partly as a result of economic stimulus measures from the government. The export sector is likely to see positive development. With Japan’s expansive monetary policy and the expected alleviation of the eurozone crisis, the yen will presumably depreciate, increasing Japanese exporters’ competitiveness in the eurozone. We anticipate annual growth of 1.2% for Japan in the medium term.
We expect economic growth in South America to significantly accelerate in 2013 (+3.7%). We assume that government investment programs and interest rate decreases will further support the economic upturn in Brazil. Demand for raw materials is likely to increase in conjunction with the slight recovery predicted for the global economy. In the medium term, we forecast that South America will grow at an annual rate of 4.1%.