Expected Rates of Economic Expansion

April 13, 2009

A monthly survey of forecasters compiled by The Economist provides a handy comparison of consensus market expectations of economic growth across a variety of advanced economies.  Results of the latest survey published in the latest issue showed downward revisions to projected 2009 GDP growth for all 13 national economies covered and the euro area as a whole.  The table below presents the 2009 average forecasts in the April 2009 survey for six selected economies and the size of revisions in percentage points (ppts) from results of surveys taken one month earlier and from a half-year earlier.  The final column of figures documents how much projected growth changed in the previous six months between April 2008 and October 2008.  In that earlier six-month period to October 2008, the perceived outlooks of the United States, euro area, and Japan deteriorated in tandem.  There was a much more pronounced slide in sentiment toward Britain but no change in projected Australian growth.

Coincidentally, in the October 2009 survey taken just weeks after the Lehman bankruptcy escalated the global financial crisis, the United States, Euroland and Japan were all expected to experience a small, positive 0.6% expansion of real GDP in calendar 2009.   In the last six months to April 2009, U.S. projected growth in 2009 was revised down by less than its Euroland counterpart, and both of these were revised down by much less than projected Japanese growth.  The earlier insulation of attitudes about Canada and Australia unraveled.  Dollar appreciation this year has been associated with lessening comparative concern about how the United States vis-a-vis other economies, but a less competitive dollar could undermine the presumption that U.S. may not be hit as severely as some other key economies.  Indeed, projected U.S. GDP growth in 2010 of 1.4% is clearly above expected growth of 0.2% in Euroland, 0.4% in Japan and 0.3% in Britain.

  Latest Forecast Revision from Revision from Revision: 10/08
2009 GDP-f April Poll March Poll October Poll versus 04/08
U.S. -2.7% -0.5 ppts -3.3 ppts -1.1 ppts
Euro Area -3.4% -1.0 ppts -4.0 ppts -1.0 ppts
Japan -6.5% -1.2 ppts -7.1 ppts -0.9 ppts
Britain -3.5% -0.4 ppts -3.6 ppts -1.7 ppts
Canada -1.9% -0.4 ppts -3.3 ppts -0.7 ppts
Australia -0.8% -0.5 ppts -3.8 ppts No Change

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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