1. No category

FORECASTS AT A GLANCE
10 April 2015
Strong tailwinds
CONTENTS
•
Global: Cheap oil, supportive central banks, but some EMs look shaky.
•
US: Little austerity, monetary policy gains traction; 2.8% growth.
US: Waiting for wages
2
•
China: Resilient growth slowing gradually to 6.7% in 2016.
China: Gradually slowing
3
•
Japan: Artificial stimulus has faded, future hinges on reforms.
Japan: Will Abe deliver?
4
•
Eurozone: Periphery firming, core rebounding but Russian/Greek risks.
UK: Strong but caution
5
•
UK: Robust growth but mind the political risks.
Eurozone: Gradual upturn
6
Germany: Putin shock fades
7
Policy
France: Still the laggard
8
•
Monetary policy: Fed to hike in September, BoE next year.
Italy: Renzi reforms help
9
•
Central banks: Policy to stay supportive even after hikes begin.
Spain: Reform success
10
•
Fiscal policy: Neutral in Europe and US for 2015.
Portugal: Stable uptrend
11
Forecast changes
12
Berenberg versus consensus
12
Key financial forecasts
13
Risks: Two big risks – geopolitics and crises in oil producers such as Russia.
•
Upside: Geopolitical tensions ease fast, global economy accelerates.
•
Downside: Russia steps up its aggression; rout in emerging markets.
•
Inflation: Balanced as oil prices stabilise.
Forecast changes: Fed to delay rate hike to September. UK growth down.
GDP
2014 2015
2016
2013
Inflation
2014 2015
2016
2013
2.6
2.8
0.9
7.0
7.5
0.9
2.9
2.9
1.5
6.7
7.5
1.8
1.5
0.4
2.6
9.5
6.1
1.6
2.7
2.0
8.0
6.0
0.4
0.6
1.3
7.3
5.8
1.9
0.7
2.5
7.5
5.5
7.4
4.0
4.1
6.2
3.6
4.1
5.4
3.5
4.3
4.8
3.5
4.3
-5.8
-9.0
-2.0
-7.2
-3.4
-5.5
-7.8
-2.1
-6.9
-3.5
-4.3
-6.5
-2.0
-6.5
-3.5
-3.8
-6.3
-2.0
-6.0
-3.5
1.3
0.9
1.6
0.4
-0.3
1.4
0.9
1.2
1.4
1.9
1.1
0.3
2.6
1.7
1.9
1.9
2.3
1.4
1.1
2.4
2.3
1.3
1.6
1.0
1.3
1.5
0.4
0.4
0.8
0.6
0.2
-0.2
-0.2
0.2
0.3
-0.2
0.2
-0.6
0.1
1.2
1.5
0.7
1.0
1.0
1.1
12.0
5.2
10.3
12.2
26.1
16.4
11.6
5.0
10.3
12.7
24.5
14.1
11.1
4.6
10.5
12.6
22.4
13.7
10.2
4.2
10.4
12.2
20.1
12.6
-2.9
0.1
-4.1
-2.8
-6.3
-4.5
-2.6
0.4
-4.0
-3.0
-5.7
-4.0
-2.4
0.3
-3.8
-2.7
-4.0
-2.9
-2.2
0.2
-3.4
-2.2
-2.5
-2.0
1.7
1.9
1.3
2.8
1.9
1.9
2.6
1.1
2.3
2.6
1.6
2.6
2.6
-0.2
0.4
1.5
0.1
0.0
0.2
-0.7
0.6
1.5
0.1
1.5
7.6
3.2
8.0
6.2
3.2
7.8
5.3
3.3
7.6
4.7
3.5
7.2
-5.7
0.2
-1.3
-5.1
0.6
-2.0
-4.1
0.4
-1.3
-3.1
0.4
-0.8
1.3
4.1
0.5
3.0
-4.0
3.6
-1.0
3.8
6.8
7.5
7.8
8.9
14.1
6.8
8.6
6.5
5.5
9.1
5.5
9.8
7.0
9.4
8.0
9.3
-1.3
-1.5
-1.5
-1.6
-3.0
-2.0
-3.1
-1.8
Weight
2013
World*
US
Japan
China
India
Latin America
100.0
22.8
6.8
12.2
2.4
7.9
2.4
2.2
1.6
7.7
6.7
2.7
2.4
2.4
-0.1
7.4
7.2
1.1
Europe
Eurozone
Germany
France
Italy
Spain
Portugal
Other Western Europe
UK
Switzerland
Sweden
Other Europe
Russia
Turkey
30.0
17.3
4.9
3.7
2.8
1.8
0.3
0.5
-0.4
0.2
0.4
-1.7
-1.2
-1.6
3.4
0.9
0.8
2.9
1.1
Unemployment
2014 2015 2016
2013
Fiscal balance
2014 2015 2016
Unemployment rate: Harmonised definition (ILO/Eurostat); fiscal balance: general government deficit in % of GDP excluding one-off bank support.
*At current exchange rates, not purchasing power parity. PPP estimates give more weight to fast-growing emerging markets and inflate global GDP.
Weights based on IMF World Global Outlook statistics 2013 estimated GDP figures.
Holger Schmieding
Chief Economist
holger.schmieding@berenberg.com
+44 20 3207 7889
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
1
Holger Schmieding
Chief Economist
holger.schmieding@berenberg.com
+44 20 3207 7889
US: waiting for wage growth
Key drivers of forecast
Monetary policy gaining traction
The Fed will not spoil the recovery: Interest rates
will remain very supportive even after the Fed starts
hiking rates gradually in late summer 2015.
•
Private sector resilient despite short-term wobbles:
Companies and households have largely repaired
their balance sheets and can spend normally again.
Strong dollar weighs on manufacturing, cheap oil
helps consumers. Q1 weather effects.
•
Waiting for wage growth: A gradual pick-up in
response to the tightening labour market should give
the recovery another kick.
•
Risks: Balanced.
130
Household debt, % disposable income, lhs
120
Debt service ratio, rhs
14
110
13
100
12
90
11
80
10
70
1995
9
1998
2001
2004
2007
Upside chance: US consumer boom, a stronger
global recovery, cheap energy boosts real incomes.
•
Downside risks: Higher mortgage rates damage the
recovery, sharp Chinese slowdown, geopolitical
tensions lead to marked global slowdown, oil
investment falls very sharply.
GDP
Inflation
Unemployment
Inflation: Very gradual uptick only, not a serious risk.
Bloomberg consensus, taken 10 April 2015
GDP
2010
2013
Debt on left-hand scale, debt service on right-hand scale. Source: Fed
•
•
15
% y/y
% q/q
2014
2.4
2015
2.8
2.4
2.5
2.9
2.7
-2.0
-0.2
0.8
1.1
11.9
1.6
5.3
3.0
6.3
2.0
0.2
Ber
2.8
0.4
5.4
2015
Cons
2.9
0.2
5.4
Gap
-0.1
0.2
0.0
2016
Cons
2.9
2.2
5.0
Ber
2.9
1.9
4.8
Gap
0.1
-0.3
-0.2
2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
1.9
2.6
2.7
2.4
3.3
3.0 2.5
2.6
3.0 2.9
2.9
2.9
2.9
-0.5
1.1
1.2
0.5
0.4 0.8
0.7
0.7
0.7
0.7
0.7
0.7
-2.1
2.2
0.3
4.6
2.4
0.6
5.0
2.7
0.8
2.2
2.9
1.1
1.5
2.9
0.3
3.2
3.1
0.8
2.9
3.0
0.7
2.9
2.5
0.7
2.9
2.9
0.7
2.9
2.7
0.7
2.9
2.7
0.7
2.9
2.7
0.7
6.1
-1.1
-0.2
3.5
-0.7
0.4
1.2
0.3
1.1
-0.7
0.8
-0.5
2.5
1.2
0.2
5.3
1.0
0.2
4.6
0.1
0.2
5.3
0.9
0.3
5.9
1.0
0.3
6.1
1.1
0.3
6.1
1.2
0.3
6.1
1.3
0.3
6.1
6.4
5.9
-1.3
4.7
2.1
6.8
0.8
7.6
0.9
6.2
1.3
7.1
1.5
6.4
1.5
5.8
1.5
6.2
1.5
6.5
1.5
6.1
1.5
5.7
1.5
5.4
2.5
3.1
3.1
0.4
2.0
0.2
2.3
2.4
0.9
2.2
2.8
1.0
1.2
3.0
0.8
1.3
3.3
0.5
1.6
3.2
0.8
1.6
3.0
0.8
1.6
2.9
0.8
1.5
3.2
0.8
1.3
3.1
0.7
1.3
3.0
0.7
1.3
3.0
0.7
-0.2
-0.2
-0.1
0.0
0.0
0.0
-0.1
-0.4
0.0
-0.1
-0.1
0.3
0.0
0.2
-0.1
-0.5
-0.2
0.0
-0.2
-0.1
0.2
-0.2
0.0
-0.1
-0.4
0.0
-0.1
-0.2
0.0
-0.1
-0.2
0.0
0.0
-0.1
0.0
0.0
-0.1
0.0
0.0
-0.1
0.0
0.0
-411
-2.4
-474
-2.7
-494
-2.7
-0.3
-101
0.3
-97
0.0
-99
0.0
-113
-0.1
-116
0.0
-118
0.0
-119
0.0
-121
0.0
-122
0.0
-123
0.0
-124
0.0
-124
4.2
2.8
2.9
3.3
1.0
4.2
1.4
4.6
1.0
4.5
1.1
3.6
0.0
2.8
0.7
2.6
0.8
2.3
0.8
3.0
0.8
3.0
0.7
2.8
0.6
2.7
0.6
%
7.4
6.2
5.4
4.8
6.6
6.2
6.1
5.7
5.6 5.4 5.3
5.2
% y/y
1.5
1.6
0.4
1.9
1.4
2.1
1.8
1.2
-0.1 0.2
0.3
1.1
% of GDP -5.8 -5.5
-4.3
-3.8
% of GDP 104.2 105.7 106.7 105.5
%
0.25 0.25 0.75 2.00 0.25 0.25 0.25 0.25 0.25 0.25 0.50 0.75
Fed Funds Rate 4
1
Contribution to GDP growth 2 Period averages 3 General government overall balance, IMF Fiscal monitor 4 End of period
5.0
2.1
4.9
1.8
4.7
1.8
4.6
1.8
1.00
1.25
1.50
2.00
Private Consumption
Government Consumption
Residential Investment
%q/q ann.
% y/y
% q/q
2013
2.2
Berenberg versus consensus
% y/y
% q/q
% y/y
% q/q
Non-Residential Investment % y/y
Final Dom Demand 1
Net Exports1
Stockbuilding 1
Current Account Balance
Industrial Production 2
Unemployment Rate 2
CPI 2
General Govt. Balance 3
General Govt. Debt
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
0.0
% q/q
USD bn
-400
% of GDP -2.4
% y/y
2.9
% q/q
2
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
China: gradually slowing
Key drivers of forecast
Controlled slowdown
•
Gradual growth slowdown as China matures, but no
major fluctuations around that trend.
20
•
Authorities have all policy levers: High private
savings, low inflation and huge forex reserves. China
may hit problems, but it can contain them.
15
The ride may get bumpy at times: But China has
plenty of catch-up left. Growth should gradually
trend down but remain strong.
10
•
Real retail sales, yoy %
Risks: Downside for growth and inflation.
•
Upside chance: Strong global recovery boosts
exports. Cheap energy boosts consumer real incomes
and company profits.
5
2000 2002 2004 2006 2008 2010
2012
2014
Three-month moving average. Source: National Bureau of Statistics
Berenberg versus consensus
•
•
Downside risks: Real estate correction intensifies;
US, EU stumble; domestic policy mistakes.
Inflation: No serious upside risk.
GDP
Inflation
Unemployment
Ber
7.0
1.3
4.3
2015
Cons
7.0
1.5
4.1
Gap
0.0
-0.2
0.2
Ber
6.7
2.5
4.3
2016
Cons
6.7
2.2
4.1
Fiscal balance
-2.0
-2.4
0.4
-2.0
-2.5
Gap
0.0
0.3
0.2
0.5
Bloomberg consensus, taken 10 April 2015
Industrial Production
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
% y/y
7.4
7.0
6.7
7.4
7.5
7.3
7.3
7.1
7.1
6.9
6.9
6.8
6.7
6.6
6.7
7.7
% q/q
1.5
2.0
1.9
1.5
1.5
1.7
1.7
1.5
1.5
1.6
1.6
1.6
%q/q ann.
6.1
8.2
7.8
6.1
6.1
7.0
7.0
6.1
6.1
6.6
6.6
6.6
% y/y
9.5
8.3
6.6
6.0
8.8
8.9
8.0
7.6
6.8
6.7
6.5
6.4
6.2
6.1
5.9
5.8
Exports 1
% y/y
7.8
6.0
8.1
7.0
-3.5
4.9
12.9
8.5
12.2
7.0
7.0
7.0
7.0
7.0
7.0
7.0
Imports 1
% y/y
7.3
0.7
2.1
6.5
2.0
1.3
1.2
-1.6
-11.7
6.5
6.5
6.5
6.5
6.5
6.5
6.5
$ bn
148 201 286 312
% of GDP 0.7
0.8
1.1
1.1
Unemployment Rate
%
4.1
4.1
4.3
4.3
% y/y
2.6
2.0
1.3
2.5
CPI 2
General Govt. Balance
% of GDP -2.0 -2.1 -2.0 -2.0
General Govt. Debt
% of GDP 22.9 20.9 19.3 17.7
1
Growth rates based on monthly value data in USD 2 Period averages
7.0
73.4
72.2
48.8
28.1
94.5
93.2
69.8
34.7
101.2 99.9
76.5
4.1
2.3
4.1
2.2
4.1
2.0
4.1
1.5
4.2
1.1
4.2
1.2
4.3
1.3
4.3
1.5
4.3
2.5
4.3
2.5
4.3
2.5
GDP
Current Account Balance
4.3
2.5
3
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
Japan: will Abe finally deliver?
Key drivers of forecast
Abenomics lost its shine
Big monetary stimulus: Massive asset purchases and
public investment boosted demand in 2013. But the
effect was temporary. The sugar rush faded in 2014.
•
Recession over, but not convincingly: Back to
growth as Japan has now digested the April 2014 VAT
hike. Cheap oil helps. But investment still weak in
the absence of major supply-side reforms.
•
46
44
42
40
38
Lack of reform: Japan needs serious pro-growth
reforms. Abe has made useful proposals, but a more
dramatic shake-up will be needed.
•
36
Risks: Balanced near-term, to the downside long-term.
•
Upside chance: Having won a fresh mandate, Abe
delivers big reforms. Cheap oil will boost consumer
purchasing power and lower cost of energy imports.
•
Downside risks: Monetary sugar rush wears off, a
huge budget deficit looms and the yen collapses as
Japanese investors dump JGBs. Unlikely for now.
Inflation: BoJ policy boosts inflation expectations.
But weak demand and cheap oil keep inflation low.
•
Consumer confidence
34
Jun-11
Jun-12
Jun-13
Jun-14
Source: Japanese Cabinet Office.
Berenberg versus consensus
GDP
Inflation
Ber
0.9
0.6
2015
Cons
1.0
0.9
Gap
-0.1
-0.3
Ber
1.5
0.7
2016
Cons
1.4
1.3
Gap
0.1
-0.6
Unemployment
Fiscal balance
3.5
-6.5
3.5
-6.5
0.0
0.0
3.5
-6.3
3.3
-6.3
0.2
0.0
Bloomberg consensus, taken 10 April 2015
GDP
Private Consumption
Government Consumption
Private Investment
Public Investment
Final Domestic Demand 1
Net Exports1
Stockbuilding1
Current Account Balance
Industrial Production 2
Unemployment Rate 2
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
JPY trn
% of GDP
% y/y
% q/q
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
-0.1 0.9
1.5
2.1
-0.4 -1.4 -0.7 -1.3
0.9
1.9
1.9
1.7
1.5
1.4
1.4
1.6
1.3
-1.6 -0.7 0.4
0.7
0.5
0.4
0.4
0.4
0.3
0.3
0.3
5.1
-6.4 -2.6 1.5
2.7
1.8
1.6
1.6
1.6
1.3
1.3
1.3
2.0
-1.2
0.0
1.2
2.0
0.4
0.7
0.4
1.9
2.3
-0.5
2.4
7.9
3.7
4.0
2.8
2.2
-0.1
0.2
1.3
-0.2
0.3
0.6
0.2
-0.4
-0.2
0.0
0.0
3.9
0.8
-0.6
2.6
0.5
2.1
6.1
1.2
2.4
7.3
1.4
2.2
CPI 2
General Govt. Balance
%
% y/y
% of GDP
4.0
0.4
-9.0
3.6
2.7
-7.8
3.5
0.6
-6.5
3.5
0.7
-6.3
General Govt. Debt
% of GDP
243
244
246
248
1
2
Contribution to GDP growth
3.1
2.1
0.5
-2.7
-4.9
0.2
-2.9
0.1
0.5
-2.3
0.5
0.6
-4.0
0.3
1.0
1.3
0.5
0.7
1.6
0.4
0.6
1.5
0.4
0.4
1.5
0.4
0.4
1.3
0.2
0.4
1.1
0.2
0.4
1.0
0.2
0.4
-0.3
10.6
5.3
0.4
1.9
-5.9
0.3
-0.7
-1.3
0.3
-2.4
-0.2
0.1
-6.4
1.0
0.1
0.1
0.6
0.1
2.0
0.6
0.1
2.8
0.6
0.1
2.4
0.6
0.1
2.4
0.6
0.1
2.4
0.6
0.1
2.4
0.6
7.1
-2.2
3.9
4.9
1.1
-1.1
1.6
2.1
-1.7
1.8
0.8
-1.6
5.1
1.0
-3.1
4.7
0.7
1.1
3.3
0.7
1.5
3.1
0.7
1.5
2.8
0.7
1.5
2.8
0.7
1.3
2.8
0.7
1.2
2.8
0.7
1.2
2.0
-0.6
0.0
-3.8
0.0
0.8
0.0
0.5
0.1
0.3
1.2
0.3
0.4
1.2
0.1
0.4
0.5
0.0
0.4
0.4
0.0
0.4
0.2
0.0
0.4
0.2
0.0
0.3
0.2
0.1
0.3
0.2
0.1
0.3
0.2
0.1
-1.1
-0.7
-0.9
0.6
1.4
0.4
-0.2
-0.8
1.6
-0.1
0.0
1.5
0.6
0.0
1.7
-0.8
0.0
0.7
0.0
0.0
1.9
0.0
0.0
1.8
0.0
0.0
2.0
0.0
0.0
1.0
0.0
0.0
2.2
0.0
0.0
2.1
8.4
3.0
2.6
-3.8
-1.0
-1.9
-1.2
1.6
-1.4
2.8
2.4
-0.1
5.0
0.6
3.9
0.6
1.7
0.6
2.4
0.6
2.4
0.6
2.4
0.6
3.6
1.5
3.6
3.6
3.6
3.3
3.5
2.5
3.5
2.3
3.5
0.2
3.5
0.0
3.5
0.1
3.5
0.7
3.5
0.7
3.5
0.7
3.5
0.7
Period averages
4
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
UK: strong economy but mind the politics
Key drivers of forecast
UK labour market: your flexible friend
•
Gentle
slowing:
Geopolitical
tensions
manufacturing from H2 2014, slowing growth.
hit
•
Here comes oil: Oil price fall will boost real incomes
and put fizz back into the recovery this year.
75
73
71
69
67
65
63
61
59
57
55
1972
Policy supportive: We look for the BoE to start
hiking rates in February 2016, but that will proceed
only gradually as the UK’s flexible labour market is
keeping wage growth low.
•
Inflation: Likely to hover close to zero through most
of 2015. Sharp fall due to petrol, but weak underlying
pressures will keep inflation low in 2016.
•
30
25
20
15
10
5
0
-5
1977 1982 1987 1992 1997 2002 2007 2012
Employment rates, %, on the left-hand axis, RPI inflation on the righthand scale. Source: ONS.
Risks: Balanced.
•
Upside chance: Strong investment cycle. Consumers
spend oil windfall freely.
•
Downside risks: Consumers retrench again in
response to renewed rate hike expectations or
perhaps political uncertainty. World growth falters.
Berenberg versus consensus
Ber
2.6
0.2
5.3
-4.1
GDP
Inflation
Unemployment
Fiscal balance
Politics: Uncertainty about general election in May
2015 and potential Brexit significant.
•
16-64 employment rate
50-64 employment rate
Inflation
2015
Cons
2.6
0.4
5.5
-4.2
Gap
0.0
-0.2
-0.2
0.1
Ber
2.6
1.5
4.7
-3.1
2016
Cons
2.3
1.7
5.2
-3.2
Gap
0.3
-0.2
-0.5
0.1
Bloomberg consensus, taken 10 April 2015
GDP
% y/y
% q/q
Private Consumption
%q/q ann.
% y/y
% q/q
1.7
2.5
3.0
2.9
4Q15
2.6
0.6
1Q16 2Q16 3Q16 4Q16
2.7
2.7
2.6
2.6
0.6
0.6
0.7
0.7
3.6
2.1
0.8
3.4
2.2
0.5
2.5
2.7
1.0
2.5
2.8
0.4
2.4
2.9
0.8
2.7
3.1
0.8
2.9
2.9
0.8
2.5
3.2
0.7
2.6
3.1
0.7
2.6
3.0
0.7
2.7
2.9
0.7
2.6
2.8
0.7
Government Consumption
% y/y
% q/q
-0.3
1.7
0.9
-0.4
0.0
0.2
2.3
1.7
2.3
0.5
2.1
-0.2
2.0
0.1
0.7
0.4
0.3
0.1
0.4
-0.1
0.2
-0.1
-0.5
-0.2
-0.6
-0.1
-0.7
-0.2
Investment
3.4
7.8
3.9
7.6
Final Domestic Demand 1
% y/y
% q/q
% y/y
1.5
3.2
2.7
3.1
9.0
3.2
2.8
9.2
0.7
3.4
8.2
1.7
3.5
5.1
-0.6
3.1
2.9
1.1
2.7
3.3
1.1
2.7
3.4
1.8
2.5
6.1
1.9
3.1
7.0
2.0
3.2
7.8
1.9
3.1
7.9
1.9
3.0
7.8
1.9
3.0
Net Exports 1
% q/q
% y/y
0.0
-0.5
0.3
-0.2
1.1
-1.4
0.8
-1.3
1.0
-0.1
0.1
0.7
0.7
0.5
0.8
0.2
0.8
0.7
0.8
-0.3
0.8
-0.3
0.7
-0.2
0.7
-0.2
0.7
-0.1
0.3
0.3
-0.6
-0.3
0.1
1.4
-0.2
0.2
0.9
-0.2
-0.5
-0.4
0.0
0.8
-0.8
-0.5
-0.1
-0.7
-0.1
-0.1
-0.6
-0.1
-0.1
-0.7
-0.1
-0.1
-0.3
-0.1
-0.1
-0.3
-0.1
0.0
-0.3
-0.1
0.0
-0.3
-0.1
0.0
-0.3
-0.1
-77
-4.5
-0.6
-95
-5.3
1.6
-77
-4.2
1.4
-57
-3.0
2.4
-21
-4.7
-24
-5.4
-28
-6.1
-22
-5.0
-21
-4.6
-20
-4.3
-19
-4.1
-17
-3.7
-16
-3.3
-15
-3.1
-14
-2.9
-13
-2.7
2.3
0.5
1.9
0.3
1.2
0.1
1.1
0.2
0.5
0.0
0.9
0.7
1.7
0.9
2.4
0.8
2.9
0.5
2.7
0.5
2.2
0.5
1.8
0.4
7.6
2.6
-5.7
6.2
1.5
-5.1
5.3
0.2
-4.1
4.7
1.5
-3.1
6.8
1.8
6.3
1.7
6.0
1.4
5.7
0.9
5.5
0.1
5.4
-0.1
5.2
0.1
5.0
0.6
4.9
1.3
4.7
1.6
4.7
1.6
4.6
1.7
87.3
88.2
90.5 90.8
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.75
0.75
1.00
1.25
Stockbuilding 1
% q/q
% y/y
% q/q
Current Account Balance
GBP bn
% of GDP
Industrial Production 2
% y/y
% q/q
Unemployment Rate 2
CPI 2
General Govt. Balance 3
%
% y/y
% of GDP
General Govt Debt 3
% of GDP
BoE Bank Rate
1
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
2.8
2.6
2.6
2.7
2.9
2.8
3.0
2.7
2.5
2.6
1.7
0.9
0.8
0.6
0.6
0.6
0.7
0.7
4
Contribution to GDP growth
0.50 0.50 0.50
2
3
1.25
4
Period averages Maastricht basis End period
5
Holger Schmieding
Chief Economist
holger.schmieding@berenberg.com
+44 20 3207 7889
Eurozone: ECB, weaker euro, cheap oil provide strong tailwind
Key drivers of forecast
Confidence improving again
Upswing resumes: Putin’s war weighed on
confidence and investment in core Europe in mid2014. As that effect faded, growth firmed in late 2014.
•
Reform countries versus refuseniks: Spain, Ireland
and Portugal, along with strong core countries, enjoy
solid rebound. Growth is starting to stir even in
reform laggards France and Italy.
•
•
Cheaper oil provides a big boost over time.
•
ECB: Quantitative easing equals softer euro. That helps.
•
Austerity over: No net fiscal drag in 2015.
•
Inflation: Gradual rise back into positive territory
likely as oil prices stabilise; still-high unemployment
keeps core inflation subdued.
4.5
110
3.0
100
1.5
0.0
90
Upside chance: Greek issues leave no ripples in
confidence, consumers respond strongly to cheaper
oil prices, undervalued euro.
•
Downside risks: New Russian war or Russian crisis?
Further Greek troubles delay rebound in confidence
and investment.
GDP
Private Consumption
Government Consumption
Investment
Final Domestic Demand 1
Net Exports 1
Stockbuilding 1
Current Account Balance
Industrial Production 2
Unemployment rate 2
CPI 2
General Govt. Balance
General Govt. Debt
ECB main refinancing rate 3
Contribution to GDP growth
1
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
EUR bn
% of GDP
% y/y
% q/q
%
% y/y
% of GDP
% of GDP
%
2
-3.0
GDP yoy in %, rhs
70
1995
-4.5
1998
2001 2004 2007
2010
2013
Economic sentiment and yoy change in GDP. January used for Q1 2015
figure. Source: European Commission; Eurostat
Berenberg versus consensus
Risks: Tilted to the upside for growth.
•
-1.5
Economic sentiment, lhs
80
GDP
Inflation
Unemployment
Fiscal balance
Ber
1.4
0.2
11.1
-2.4
2015
Cons
1.3
0.0
11.2
-2.3
Gap
0.1
0.2
-0.1
-0.1
Ber
1.9
1.2
10.2
-2.2
2016
Cons
1.6
1.2
10.9
-2.0
Gap
0.3
0.0
-0.6
-0.2
Bloomberg consensus, taken 10 April 2015
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
1.4
1.9
1.1
0.8
0.8
0.9
1.0
1.2
1.5
1.7
1.7
1.9
2.0
2.0
-0.4 0.9
0.3
0.1
0.2
0.3
0.4
0.3
0.5
0.5
0.5
0.5
0.5
0.5
1.1
0.3
0.7
1.3
1.7
1.2
1.9
1.9
1.9
2.1
2.1
2.1
-0.6 1.0
1.5
1.2
0.6
0.8
1.1
1.4
1.7
1.6
1.4
1.3
1.1
1.2
1.2
1.2
0.2
0.2
0.5
0.4
0.5
0.2
0.3
0.3
0.3
0.3
0.3
0.3
0.2
0.7
0.8
1.4
0.6
0.6
0.7
0.8
0.8
0.8
0.8
1.0
1.2
1.4
1.5
1.6
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
0.4
0.4
0.4
0.4
-2.4 1.0
1.4
3.2
2.3
1.0
0.4
0.3
0.4
1.2
1.8
2.2
2.5
3.1
3.4
3.5
0.4 -0.5 0.0
0.4
0.5
0.3
0.6
0.8
0.8
0.9
0.9
0.9
-0.8 0.9
1.3
1.6
0.9
0.7
0.8
1.0
1.2
1.3
1.3
1.4
1.4
1.6
1.7
1.7
0.3
0.1
0.3
0.4
0.4
0.2
0.3
0.4
0.4
0.4
0.4
0.4
0.4
0.1
0.3
0.3
0.1
-0.1
0.2
0.2
0.2
0.3
0.4
0.2
0.3
0.3
0.3
0.3
0.0
0.0
0.0
0.2
0.0
0.1
0.1
0.1
0.1
0.1
0.1
0.1
-0.1 -0.1 -0.2 -0.3 0.1
0.1
-0.2 -0.3 -0.4 -0.3 -0.2 0.1
0.1
0.1
0.1
0.1
0.1
0.0 -0.1 -0.2 0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
230 231 275 267
52
52
58
68
75
64
66
70
75
64
63
65
2.4
2.4
2.8
2.6
-0.7 0.7
1.3
2.0
1.4
0.8
0.4
0.3
0.5
0.9
1.8
1.9
2.0
2.1
2.1
2.1
0.1
0.1
-0.3 0.4
0.4
0.5
0.5
0.5
0.5
0.5
0.5
0.5
12.0 11.6 11.1 10.2 11.8 11.6 11.6 11.5 11.3
11.2 11.1 10.8 10.5 10.3 10.1
9.9
1.3
0.4 0.2
1.2
0.7
0.6
0.4
0.2 -0.3 0.0
0.2
0.7
1.1
1.1
1.2
1.2
-2.9 -2.6 -2.4 -2.2
90.9 93.0 93.9 93.2
0.25 0.05 0.05 0.05 0.25 0.15 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
Period averages
3
End of period
6
Holger Schmieding
Chief Economist
holger.schmieding@berenberg.com
+44 20 3207 7889
Germany: Putin growth pause over, strong tailwinds
Key drivers of forecast
•
•
•
•
•
Completing post-Putin rebound
Geopolitical risks fading: As worries fade,
confidence is retracing the ground lost last year
when Putin initially escalated the war in Ukraine.
Positive fundamentals: A strong competitive
position, extremely low funding costs and pent-up
demand boost business investment as tensions ease.
Booming
consumer
confidence:
Strong
employment, rising wages and low inflation support
consumption growth.
Neutral
net
trade:
Global
demand
and
competitiveness support exports, but domestic
demand raises imports even slightly more. Shortterm boost from lower euro likely.
Inflation: Normal wage growth leads inflation
towards the higher end of the Eurozone range.
2
1
0
-1
-3
Jan 2012 Jul 2012 Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jan 2015
Ifo expectations, ZEW expectations, GfK consumer confidence, in
standard-deviations from the mean. Sources: Ifo, ZEW, GfK
Berenberg versus consensus
Risks: Tilted to the upside for growth.
•
Upside: A stronger response to extremely low
borrowing costs. Cheap oil, undervalued euro.
•
Downside: New Russian war or Russian crisis.
Further Greek troubles delay rebound.
Ifo expectations
ZEW investor expectations
GfK consumer confidence
-2
GDP
Inflation
Unemployment
Fiscal balance
Ber
1.9
0.3
4.6
0.3
2015
Cons
1.6
0.2
n/a
0.2
Gap
0.3
0.1
n/a
0.1
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
EUR bn
% of GDP
% y/y
% q/q
%
% y/y
% of GDP
% of GDP
2016
Cons
1.9
1.5
n/a
0.2
Gap
0.5
0.0
n/a
0.0
Bloomberg consensus, taken 10 April 2015
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
1.6
1.9
2.3
2.3
1.4
1.2
1.5
1.3
1.7
2.3
2.2
0.2
0.8
-0.1
0.1
0.7
0.6
0.4
0.6
0.6
3.1 -0.3 0.3
2.8
2.4
1.4
2.5
2.5
Private Consumption
0.9
1.2
2.3
1.8
1.2
0.6
1.1
2.1
2.3
2.7
2.4
2.0
0.6
0.0
0.8
0.8
0.8
0.4
0.4
0.4
Government Consumption
0.7
1.1
1.3
1.3
0.6
1.2
1.2
1.5
1.7
1.4
1.0
1.0
0.1
0.6
0.6
0.2
0.3
0.3
0.3
0.3
Investment
-0.4 3.4
2.1
5.1
7.6
3.3
1.3
1.3
-0.8
1.3
3.9
4.0
3.0
-1.7 -1.2
1.2
0.9
0.4
1.3
1.3
0.6
1.6
2.0
2.3
2.3
1.2
1.1
1.7
1.4
2.0
2.3
2.1
Final Domestic Demand 2
1.0 -0.3 0.3
0.7
0.7
0.4
0.5
0.5
-0.5 0.4 0.2 -0.3 0.2
0.1
0.8
0.6
0.5
0.5
0.1
-0.2
Net Exports 2
-0.1 0.0
0.4
0.2 -0.1
0.0
0.0
0.0
0.1 -0.4 -0.5 0.3 -0.2 0.2 -0.7 -0.8 -0.7 -0.8 -0.1
0.2
Stockbuilding 2
-0.2 0.2 -0.6 -0.2 0.0
0.0
0.1
0.1
Current Account Balance
187 227 227 215
54
51
61
60
57
51
61
57
6.6
7.8
7.5
6.9
0.2
1.3
1.8
2.5
3.2
1.2
0.4
0.6
0.5
1.8
2.6
2.4
Industrial Production 3
0.5 -0.6 -0.2 0.8
0.4
0.8
0.6
0.6
5.2
5.0
4.6
4.2
5.1
5.0
5.0
4.9
4.7
4.6
4.5
4.4
Unemployment Rate 4
1.6
0.8
0.3
1.5
1.0
0.9
0.8
0.4 -0.2 0.1
0.4
0.7
CPI 5
General Govt. Balance
0.1
0.4 0.3
0.2
General Govt. Debt
76.9 74.5 72.0 69.4
1
Calendar-adjusted 2 Contribution to GDP growth 3 Ex construction, s.a., period averages 4 ILO measure, period averages, s.a.
5
EU-harmonised, period averages
GDP 1
Ber
2.3
1.5
4.2
0.2
1Q16 2Q16 3Q16 4Q16
2.2
2.4
2.4
2.3
0.6
0.6
0.6 0.6
2.3
2.3
2.3
2.3
1.7
1.8
1.9
1.9
0.5
0.5
0.5
0.5
1.1
1.2
1.4
1.5
0.3
0.4
0.4 0.4
4.4
5.3
5.3
5.3
1.3
1.3
1.3
1.3
2.0
2.3
2.4
2.4
0.6
0.6
0.6 0.6
-0.2 -0.3 -0.4 -0.5
-0.1 -0.1
-0.1 -0.1
0.3
0.4
0.4 0.4
0.1
0.1
0.1
0.1
54
48
58
54
2.6
0.6
4.3
1.5
2.4
0.6
4.2
1.5
2.4
0.6
4.1
1.5
2.4
0.6
4.1
1.6
7
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
France: Europe’s reform laggard
Key drivers of forecast
Who is competitive, who is not?
Modest reforms: President Hollande has thrown his
weight behind the reformers. The left-wingers have
been sidelined. But the reforms so far are too timid
and leave out the crucial labour market.
•
150
•
France continues to lag behind: Lack of labour
market flexibility prevents stronger recovery.
130
•
Inflation: Very low.
120
110
Risks: Balanced.
Upside: More reforms could restore business
sentiment and thus investment. Cheap oil, weaker
euro help.
•
Downside: Watch the politics. Left-wingers within
the ruling Socialist Party could block future reform
efforts in parliament. Street protests could bring
down the government and trigger new elections. The
far-right Front National is still strong in the polls,
although March 2015 regional elections showed its
support hit a ceiling near 25%.
•
France
Spain
140
100
2002
2004
2006
2008
2010
2012
2014
France, Spain real exports, 2005 = 100. Source: Eurostat
Berenberg versus consensus
Ber
1.1
-0.2
10.5
-3.8
GDP
Inflation
Unemployment
Fiscal balance
2015
Cons
0.9
0.1
10.3
-4.3
Gap
0.2
-0.3
0.2
0.5
Ber
1.4
0.7
10.4
-3.4
2016
Cons
1.4
1.0
10.2
-3.9
Gap
0.0
-0.3
0.3
0.5
Bloomberg consensus, taken 10 April 2015
GDP
Private Consumption
Government Consumption
Investment
Final Domestic Demand 1
Net Exports 1
Stockbuilding 1
Current Account Balance
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
EUR bn
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
0.4
1.1
1.4
0.8
0.0
0.4
0.2
0.7
1.0
1.1
1.4
1.3
1.4
1.4
1.3
0.4
-0.1 -0.1
0.3
0.1
0.4
0.2
0.3
0.4
0.4
0.3
0.3
0.3
-0.3
0.4
-0.3
-0.4
0.6
0.4
1.2
0.9
0.3
0.5
0.6
0.2
1.6
1.3
0.4
1.0
1.1
0.2
1.4
1.2
0.4
1.5
1.3
0.4
1.5
1.3
0.3
1.2
1.3
0.2
1.2
1.2
0.2
1.3
1.0
0.2
2.0
0.3
-0.4
1.6
0.4
-1.4
2.0
0.6
-2.0
1.9
0.4
-2.5
1.6
0.1
-1.6
1.3
0.1
-0.7
0.7
0.1
0.1
0.4
0.1
1.0
0.4
0.1
1.0
0.4
0.1
1.3
0.4
0.1
1.5
0.4
0.1
1.5
-0.7
0.6
-0.2
-0.8
0.4
0.1
-0.8
0.5
0.2
-0.8
0.2
0.1
0.3
0.8
0.3
0.1
0.8
0.2
0.2
0.9
0.3
0.4
1.0
0.3
0.4
1.0
0.3
0.4
1.1
0.2
0.4
1.0
0.2
0.4
1.0
0.2
0.1
0.1
-0.2
-0.1
0.3
-0.6
-0.2
0.3
-0.3
-0.2
0.0
-0.3
0.1
0.3
-0.2
0.0
0.0
0.0
0.0
0.1
0.3
0.0
0.1
0.2
0.0
0.1
0.2
0.1
0.1
0.2
0.1
0.1
0.2
0.1
0.1
0.2
0.1
0.1
-19
-0.9
-1.0
-13
-0.6
1.8
0.3
-9 -10.5
-0.4
-0.3
1.9
-0.8
0.0
-9.6
0.0
1.9
0.0
-0.8
0.0
-10.8
0.0
-8.0
0.0
0.9
0.0
4.9
0.0
-6.0
0.0
-2.7
0.0
-3.3
0.0
3.5
-2.2
-0.8
-0.1
0.8
-1.4
-0.6
0.7
1.4
2.0
0.4
1.7
0.5
2.8
0.5
1.9
0.5
1.9
0.5
1.9
0.5
1.9
0.5
10.1
0.8
10.4
0.5
10.5
0.3
10.6
-0.3
10.5
-0.3
10.5
-0.2
10.4
0.0
10.3
0.5
10.3
0.6
10.2
0.7
10.2
0.8
0.3
0.6
1.2
1.2
2.0
1.9
1.0
0.4
-0.8
-1.6
-0.3
1.3
0.5
0.4
0.9
1.0
0.1
-0.3
0.1
0.2
-0.2
0.3
-30
-1.4
-0.4
Industrial Production 2
% of GDP
% y/y
% q/q
Unemployment Rate 2
CPI 2
General Govt. Balance
%
% y/y
% of GDP
10.3
1.0
-4.1
10.3
0.6
-4.0
10.5
-0.2
-3.8
10.4
0.7
-3.4
General Govt. Debt
% of GDP
92.2
95.6
97.0
97.5
1
2
Contribution to GDP growth
10.1
0.9
Period averages
8
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
Italy: Renzi reforms lift confidence
Key drivers of forecast
Manufacturing PMI now above US ISM
•
Finally reforms: Prime Minister Renzi has delivered
the long-awaited labour reform. Business sentiment
rebounding strongly.
•
Less austerity: The end of major tax hikes removed
that drag on growth in 2014. But planned 2015 tax
cuts partly shelved to fulfil EU fiscal rules.
58
54
Politics key: Renzi’s reform agenda is an opportunity
to break Italy’s weak growth trend. His popularity
should help him to implement further change.
•
•
•
50
US ISM Manufacturing
46
Italy PMI Manufacturing
Businesses waiting: Renzi’s reforms have lifted
confidence, but actual investment is still lagging
behind.
Sources: Markit, ISM
Inflation: Very low due to internal devaluation.
Berenberg versus consensus
42
Apr 2012
Okt 2012
Apr 2013
Risks: Tilted to the upside for growth.
•
Upside: Serious structural reforms boost potential
growth; the credit crunch eases early. The EU could
grant some fiscal flexibility. Cheap oil, weaker euro.
•
Downside: Russian crisis. Further Greek troubles
delay rebound.
GDP
Private Consumption
Government Consumption
Investment
Final Domestic Demand 1
Net Exports 1
Stockbuilding 1
Current Account Balance
Industrial Production 2
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
-2.8
0.3
0.5
0.7
-0.3
-1.0
0.3
0.4
-5.8
-3.3
-0.3
1.3
-2.8
-0.6
0.3
0.7
0.8
0.2
0.1
0.3
% q/q
% y/y
% q/q
0.3
0.1
-0.1
-0.1
EUR bn
% of GDP
% y/y
15.5
1.0
-3.1
29.3
1.8
-0.7
36.4
2.3
-0.2
42.4
2.6
1.6
CPI 2
General Govt. Balance
General Govt. Debt
% of GDP 127.9 131.0 131.0 129.0
1
2
Contribution to GDP growth
GDP
Inflation
Unemployment
Fiscal balance
2015
Cons
0.5
0.0
12.8
-2.8
Apr 2014
Gap
-0.2
0.2
-0.2
0.1
Okt 2014
Ber
1.1
1.0
12.2
-2.2
2016
Cons
1.0
0.8
12.5
-2.4
Gap
0.1
0.2
-0.3
0.2
Bloomberg consensus, taken 10 April 2015
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
1.1
-0.1 -0.3 -0.5 -0.5 -0.3
0.2
0.6
0.8
1.1
1.1
1.1
1.1
-1.7 -0.3 0.3
-0.1 -0.2 -0.1
0.0
0.1
0.3
0.3
0.3
0.3
0.2
0.2
0.3
-0.5 -0.8 -0.5 0.0
0.2
1.1
1.0
1.0
1.2
1.0
1.0
1.0
% q/q
%
% y/y
% of GDP
Unemployment Rate 2
Ber
0.3
0.2
12.6
-2.7
Okt 2013
12.2
1.3
-2.8
12.7
0.2
-3.0
12.6
0.2
-2.7
12.2
1.0
-2.2
-0.2
0.1
-1.0
0.5
0.2
-1.8
0.5
0.2
-0.7
0.5
0.1
-0.6
0.4
0.0
-0.1
0.5
0.2
0.5
0.5
0.2
0.4
0.6
0.2
0.4
0.8
0.2
0.4
0.7
0.1
0.4
0.6
0.1
0.4
0.5
0.1
0.4
-0.4
-2.5
-1.5
-0.5
-3.3
-0.7
0.2
-4.2
-1.0
0.1
-3.1
0.0
0.1
-1.7
0.0
0.1
-0.8
0.2
0.1
0.5
0.3
0.1
0.8
0.3
0.1
1.2
0.4
0.1
1.3
0.4
0.1
1.4
0.4
0.1
1.4
0.4
-0.8
-0.3
0.3
-0.6
-0.1
0.0
-0.5
0.0
0.2
-0.3
0.1
0.1
-0.1
0.0
0.0
0.2
0.2
0.0
0.5
0.2
0.1
0.6
0.2
0.2
0.8
0.2
0.3
0.7
0.1
0.3
0.7
0.1
0.3
0.6
0.1
0.3
0.2
0.3
0.0
0.1
0.3
-0.2
-0.1
-0.1
-0.1
-0.1
-0.2
0.0
0.0
-0.2
0.0
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.1
0.0
0.1
0.1
0.0
0.1
0.1
0.0
0.1
0.2
0.0
-0.8
5.8
10.3
14.0
1.7
7.3
11.8
15.5
3.2
8.8
13.3
17.0
0.0
-0.2
-1.2
-1.6
-1.6
-0.7
0.6
1.1
1.6
1.6
1.6
1.6
0.0
12.5
0.5
-0.5
12.4
0.4
-0.9
12.8
-0.1
-0.1
13.0
0.1
-0.1
12.7
-0.2
0.4
12.6
0.0
0.4
12.5
0.3
0.4
12.4
0.5
0.4
12.3
0.9
0.4
12.2
0.9
0.4
12.1
1.0
0.4
12.0
1.1
Period averages
9
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
Spain: the poster child for reform
Key drivers of forecast
Spain: the worst is over
•
Very competitive: Wage restraint and labour market
reforms have reduced labour costs; exports benefit.
•
Diminishing fiscal drag: While still uncomfortable,
the fiscal position has allowed an easing of austerity.
•
Stabilising domestic demand: Consumer confidence
returns, consumption now growing solidly.
•
Inflation to stay below the Eurozone average despite
strong growth rebound due to internal devaluation.
Risks: Tilted to the upside for growth.
Upside: A sharper fall in borrowing costs boosts
investment. Global growth lifts export demand.
Cheap oil helps.
•
1400
1200
Change in
unemployment (12m
1000
thsds)
800
600
400
200
0
-200
-400
2001 2003 2005 2007 2009
2013
2015
National definition, 000s, 12m sum. Source: Spanish Labour Ministry
Berenberg versus consensus
Downside: Rise of anti-austerity movement
Podemos
on
political
scandals,
Catalunya
independence debate. Further Greek troubles delay
rebound.
•
2011
Ber
2.6
-0.6
22.4
-4.0
GDP
Inflation
Unemployment
Fiscal balance
2015
Cons
2.2
-0.5
22.6
-4.5
Gap
0.4
-0.1
-0.2
0.5
2016
Cons
2.2
1.1
21
-3.4
Ber
2.4
1.0
20.1
-2.5
Gap
0.2
-0.1
-0.9
0.9
Bloomberg consensus, taken 10 April 2015
GDP
Private Consumption
Government Consumption
Investment
Final Domestic Demand 1
Net Exports 1
Stockbuilding 1
Current Account Balance
Industrial Production 2
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
1.4
2.6
2.4
0.6
1.2
1.6
2.0
2.4
2.6
2.6
2.6
2.4
2.3
2.4
2.4
-1.2
0.3
0.5
0.5
0.7
0.7
0.6
0.6
0.6
0.6
0.6
0.6
0.6
1.2
2.1
2.1
2.7
2.9
2.6
2.3
2.4
2.3
2.2
2.5
2.5
-2.3
2.4
2.8
1.7
-2.9
0.1
-0.7
0.4
-3.8
3.4
4.5
4.0
-2.6
2.0
2.4
1.9
1.3
-0.7
0.2
0.5
% q/q
% y/y
% q/q
0.2
0.3
0.2
0.1
EUR bn
% of GDP
% y/y
15
1.4
-1.3
8
0.8
2.0
9
0.8
1.7
9
0.8
2.4
% q/q
%
% y/y
26.1
1.5
24.5
-0.2
22.4
-0.6
20.1
1.0
General Govt. Debt
% of GDP
% of GDP
-6.3
92.1
-5.7
96.5
-4.0
98.0
-2.5
97.8
1
2
Unemployment Rate 2
CPI 2
General Govt. Balance
Contribution to GDP growth
1.3
0.6
0.3
2.3
1.0
0.3
2.7
0.8
0.3
3.3
0.9
-0.5
3.6
0.8
-1.4
3.1
0.5
-0.9
2.7
0.4
-0.7
2.1
0.4
0.4
1.7
0.4
0.4
1.6
0.4
0.4
1.7
0.5
0.4
1.8
0.5
0.4
1.0
0.8
0.4
-0.4
3.9
2.0
-0.1
3.9
1.1
-1.0
5.1
1.4
0.1
5.6
0.9
0.1
4.4
0.9
0.1
4.2
0.9
0.1
3.8
1.0
0.1
3.9
1.0
0.1
4.0
1.0
0.1
4.1
1.0
0.1
4.1
1.0
1.0
0.6
-0.5
2.1
0.9
-1.0
2.4
0.6
-0.9
2.8
0.6
-0.6
2.8
0.7
-0.3
2.4
0.5
0.2
2.2
0.4
0.5
2.0
0.4
0.5
1.8
0.5
0.6
1.8
0.5
0.5
1.9
0.5
0.5
1.9
0.5
0.4
-0.2
0.1
-0.1
-0.3
0.1
0.0
-0.1
0.2
0.0
0.2
-0.2
-0.1
0.1
-0.1
0.0
0.1
-0.1
0.0
0.1
-0.1
0.0
0.2
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.0
-3.7
0.1
4.7
7.3
-3.2
0.1
4.7
7.3
-3.2
0.1
4.7
7.3
2.5
2.6
1.3
1.6
0.8
1.1
2.2
2.4
2.4
2.4
2.4
2.4
1.4
25.2
0.0
0.3
24.7
0.2
-0.5
24.2
-0.4
0.4
23.7
-0.6
0.6
23.2
-1.1
0.6
22.7
-0.7
0.6
22.1
-0.5
0.6
21.5
0.0
0.6
20.9
0.8
0.6
20.3
0.9
0.6
19.7
1.0
0.6
19.3
1.1
Period averages
10
Christian Schulz
Senior Economist
christian.schulz@berenberg.com
+44 20 3207 7878
Portugal: politically stable, economically rebounding
Key drivers of forecast
Portugal: paying back the debt
Regained competitiveness supports an export- and
investment-led recovery.
•
80
Debt overhang drops: Private debt downtrend,
government to exit EU excessive deficit procedure in
2015.
•
•
Stronger neighbour: Neighbouring Spain’s return to
growth is boosting Portugal’s export prospects.
•
Inflation: Inflation is below the Eurozone average
due to internal devaluation.
•
GDP: Moderate recovery continues.
•
Stable politics: Still no serious populist upstart,
elections in October.
70
60
50
MFI loans to non-financial corporations (% of GDP)
MFI loans to households (% of GDP)
40
Jan 2003 Jan 2005 Jan 2007 Jan 2009 Jan 2011
Upside: Low interest rates ease fiscal pressure.
Cheap oil. Spain boom spill-over.
•
Downside: Grexit spill-over. Post-election reform
reversals.
Jan 2015
MFI loans to households/NPISH and non-financial corporations, % of
GDP. Sources: ECB, INE
Berenberg versus consensus
Risks: Tilted to the upside for growth.
•
Jan 2013
Ber
1.7
0.1
13.7
-2.9
GDP
Inflation
Unemployment
Fiscal balance
2015
Cons
1.5
0.0
13.5
-3.0
Gap
0.2
0.1
0.2
0.1
Ber
2.3
1.1
12.6
-2.0
2016
Cons
1.8
0.9
13.1
-2.4
Gap
0.5
0.2
-0.4
0.4
Bloomberg consensus, taken 10 April 2015
GDP
Private Consumption
Government Consumption
Investment
Final Domestic Demand 1
Net Exports 1
Stockbuilding 1
Current Account Balance
Industrial Production 2
% y/y
% q/q
%q/q ann.
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
% q/q
% y/y
2013 2014 2015 2016 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
0.9
1.7
2.3
0.9
0.9
1.2
0.7
1.6
1.5
1.9
1.9
2.1
2.3
2.3
2.4
-1.6
-0.5 0.5
0.2
0.5
0.3
0.5
0.5
0.5
0.5
0.6
0.6
0.6
-2.0 1.9
0.7
2.2
1.4
1.8
2.2
2.2
2.2
2.5
2.5
2.4
-1.5
2.1
1.3
1.3
-2.4
-0.3
0.0
0.8
-6.7
2.5
4.0
3.6
-2.5
1.7
1.5
1.6
0.9
-1.1
0.8
0.7
% q/q
% y/y
% q/q
0.0
0.3
-0.5
0.0
EUR bn
% of GDP
% y/y
2.3
1.3
0.6
1.0
0.6
1.2
3.3
1.9
0.9
5.1
2.8
3.6
CPI 2
General Govt. Balance
% q/q
%
% y/y
% of GDP
General Govt. Debt
% of GDP 128.0 134.0 133.0 130.0
1
2
Unemployment Rate 2
Contribution to GDP growth
16.4
0.4
-4.5
14.1
-0.2
-4.0
13.7
0.1
-2.9
12.6
1.1
-2.0
2.1
0.3
-0.2
1.7
0.4
0.1
2.6
1.1
0.4
1.9
0.2
-1.4
1.8
0.2
-0.8
1.6
0.2
-0.4
0.9
0.3
0.3
1.0
0.3
0.8
1.1
0.3
0.8
1.3
0.4
0.8
1.4
0.4
0.8
1.5
0.4
0.8
-0.4
0.0
-2.6
-0.3
3.7
2.8
-0.4
4.1
2.2
-0.3
2.4
0.1
0.2
6.0
0.8
0.2
3.9
0.8
0.2
2.6
0.9
0.2
3.4
0.9
0.2
3.5
0.9
0.2
3.6
0.9
0.2
3.6
0.9
0.2
3.4
0.7
1.3
-0.3
-2.0
1.7
0.6
-0.7
2.4
0.9
-0.9
1.3
0.0
-0.6
1.9
0.3
1.2
1.6
0.3
0.2
1.0
0.4
1.1
1.3
0.4
0.6
1.4
0.4
0.7
1.6
0.4
0.7
1.6
0.4
0.7
1.7
0.4
0.7
-1.8
1.6
1.6
1.2
-0.1
-1.3
-0.7
-0.3
0.0
0.8
0.0
-0.3
0.0
-1.6
0.0
0.2
-0.3
0.0
0.2
-0.3
0.0
0.2
0.0
0.0
0.2
0.0
0.0
0.2
0.0
0.0
0.2
0.0
0.0
0.2
0.0
0.0
-0.7
0.1
1.2
0.5
0.1
0.5
1.7
0.9
0.6
1.0
2.1
1.4
2.3
1.8
1.6
-0.9
0.6
-0.4
0.8
2.5
3.4
3.7
3.7
3.7
-1.4
14.9
-0.1
1.7
14.4
-0.2
-0.3
13.7
-0.3
-0.7
13.6
0.0
0.0
14.0
-0.2
0.6
13.8
0.0
0.9
13.6
0.1
0.9
13.3
0.4
0.9
13.0
0.9
0.9
12.7
1.1
0.9
12.5
1.2
0.9
12.3
1.3
Period averages
11
FORECASTS AT A GLANCE
Economics
Forecast changes
•
US Fed: The recent run of poor labour market and manufacturing confidence data,
even though it is probably largely due to temporary factors such as bad weather, gives
the Fed ample reason to delay the first hike a little longer. We now expect the first hike
in September 2015, rather than in July 2015.
•
UK: Strong sterling and weak construction weigh on growth, and political uncertainty
hurts investment. We reduce our 2015 GDP call from 2.8% to 2.6%.
Berenberg compared to consensus
GDP
US
China
Japan
UK
EZ
Germany
France
Italy
Spain
Portugal
2015
-0.1
0.0
-0.1
0.0
0.1
0.3
0.2
-0.2
0.4
0.2
0
-.1
0.0
0
-.1
0.0
0.1
0.3
0.2
0
-.2
0.4
0.2
Inflation
2016
0.1
0.0
0.1
0.3
0.3
0.5
0.0
0.1
0.2
0.5
0.1
0.0
0.1
0.3
0.3
0.5
0.0
0.1
0.2
0.5
2015
0.2
-0.2
-0.3
-0.2
0.2
0.1
-0.3
0.2
-0.1
0.1
2016
0.2
0
-.2
0
-.3
0
-.2
0.2
0.1
0
-.3
0.2
0
-.1
0.1
-0.3
0.3
-0.6
-0.2
0.0
0.0
-0.3
0.2
-0.1
0.2
0
-.3
0.3
0
-.6
0
-.2
0.0
0.0
0
-.3
0.2
0
-.1
0.2
Unemployment Rate
2015
2016
0.0
-0.2
0.2
0.2
0.0
0.2
-0.2
-0.5
-0.1
-0.6
n/a
n/a
0.2
0.3
-0.2
-0.3
-0.2
-0.9
0.2
-0.4
0.0
0.2
0.0
0
-.2
0.2
0.2
0
-.2
0
-.5
0
-.1
0
-.6
0.2
0.3
0
-.2
0
-.3
0
-.2
0
-.9
0.2
0
-.4
Govt. Budget Balance
2015
2016
0.0
0.0
0.4
0.5
0.0
0.0
0.1
0.1
-0.1
-0.2
0.1
0.0
0.5
0.5
0.1
0.2
0.5
0.9
0.1
0.4
0.0
0.0
0.4
0.5
0.0
0.0
0.1
0.1
0
-.1
0
-.2
0.1
0.0
0.5
0.5
0.1
0.2
0.5
0.9
0.1
0.4
Table shows difference between Berenberg forecasts and Bloomberg consensus. The bars show graphically whether Berenberg forecasts are stronger
(green) or weaker (red) than consensus. Bloomberg consensus taken on 10 April 2015. Berenberg Germany unemployment forecasts based on ILO
measure, which is not comparable to consensus figures that are based on the national unemployment definition. Source: Bloomberg, Berenberg
12
FORECASTS AT A GLANCE
Economics
Key financial forecasts
Current1
MidMid -2015
EndEnd -2015
0.00-0.25%
0.05%
0.50%
0.10%
0.00-0.25%
0.05%
0.50%
0.10%
0.75%
0.05%
0.50%
0.10%
1.93%
0.15%
1.58%
2.50%
0.4%
2.10%
2.80%
0.8%
2.50%
1.06
0.72
1.47
120
128
1.04
1.04
0.70
1.50
121
126
1.08
1.12
0.73
1.53
122
137
1.12
Central bank rates
US Fed
ECB
BoE
BoJ
1010-year bond yields
US
Germany
UK
Currencies
EUR-USD
EUR-GBP
GBP-USD
USD-JPY
EUR-JPY
EUR-CHF
1
Taken 10 April 2015 at 15:00.
13
FORECASTS AT A GLANCE
Economics
Disclaimer
This document was compiled by the above mentioned authors of the economics department of Joh. Berenberg, Gossler & Co. KG
(hereinafter referred to as “the Bank”),. The Bank has made any effort to carefully research and process all information. The
information has been obtained from sources which we believe to be reliable such as, for example, Thomson Reuters, Bloomberg
and the relevant specialised press. However, we do not assume liability for the correctness and completeness of all information
given. The provided information has not been checked by a third party, especially an independent auditing firm. We explicitly
point to the stated date of preparation. The information given can become incorrect due to passage of time and/or as a result of
legal, political, economic or other changes. We do not assume responsibility to indicate such changes and/or to publish an updated
document. The forecasts contained in this document or other statements on rates of return, capital gains or other accession are the
personal opinion of the author and we do not assume liability for the realisation of these.
This document is only for information purposes. It does not constitute a financial analysis within the meaning of § 34b or § 31
Subs. 2 of the German Securities Trading Act (Wertpapierhandelsgesetz), no investment advice or recommendation to buy
financial instruments. It does not replace consulting regarding legal, tax or financial matters.
Remarks regarding foreign investors
The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions
may be restricted by law, and persons, into whose possession this document comes, should inform themselves about, and observe,
any such restrictions.
United Kingdom
This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for
distribution to or the use of private investors or private customers.
United States of America
This document has been prepared exclusively by Joh. Berenberg, Gossler & Co. KG. Although Berenberg Capital Markets LLC, an
affiliate of the Bank and registered US broker-dealer, distributes this document to certain customers, Berenberg Capital Markets LLC
does not provide input into its contents, nor does this document constitute research of Berenberg Capital Markets LLC. In addition,
this document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for
distribution to or the use of private investors or private customers.
This document is classified as objective for the purposes of FINRA rules. Please contact Berenberg Capital Markets LLC (+1
617.292.8200), if you require additional information.
Copyright
The Bank reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or
duplicated in any form by any means or redistributed without the Bank’s prior written consent.
© May 2013 Joh. Berenberg, Gossler & Co. KG
14
Contacts: Investment Banking
www.berenberg.com
e-mail: firstname.lastname@berenberg.com / e-mail US: firstname.lastname@berenberg-us.com
EQUITY RESEARCH
RESEARCH
AEROSPACE & DEFENCE
Andrew Gollan
+44 20 3207 7891
Tom O'Donnell
+44 20 3465 2668
AUTOMOTIVES
Adam Hull
Paul Kratz
+44 20 3465 2749
+44 20 3465 2678
BANKS
Nick Anderson
Adam Barrass
James Chappell
Andrew Lowe
Eoin Mullany
Eleni Papoula
+44 20 3207 7838
+44 20 3207 7923
+44 20 3207 7844
+44 20 3465 2743
+44 20 3207 7854
+44 20 3465 2741
BEVERAGES
Javier Gonzalez Lastra
Adam Mizrahi
+44 20 3465 2719
+44 20 3465 2653
BUSINESS SERVICES, LEISURE & TRANSPORT
Najet El Kassir
+44 20 3207 7836
Stuart Gordon
+44 20 3207 7858
Simon Mezzanotte
+44 20 3207 7917
Yousuf Mohamed
+44 20 3465 2672
Matthew O'Keeffe
+44 20 3207 7895
Josh Puddle
+44 20 3207 7881
CAPITAL GOODS
Alex Deane
Rui Dias
Stephan Klepp
Sebastian Kuenne
Kai Mueller
Horace Tam
+44 20 3465 2730
+44 20 3207 7823
+44 20 3207 7819
+44 20 3207 7856
+44 20 3465 2681
+44 20 3465 2726
Internet www.berenberg.com
CHEMICALS
John Klein
Evgenia Molotova
Jaideep Pandya
CONSTRUCTION
Lush Mahendrarajah
Chris Moore
Robert Muir
Michael Watts
+44 20 3207 7930
+44 20 3465 2664
+44 20 3207 7890
+44 20 3207 7896
+44 20 3465 2737
+44 20 3207 7860
+44 20 3207 7928
DIVERSIFIED FINANCIALS
Pras Jeyanandhan
+44 20 3207 7899
FOOD MANUFACTURING
Fintan Ryan
+44 20 3465 2748
James Targett
+44 20 3207 7873
FOOD RETAIL
Estelle Weingrod
GENERAL RETAIL
Michelle Wilson
HEALTHCARE
Scott Bardo
Alistair Campbell
Graham Doyle
Klara Fernandes
Tom Jones
Louise Pearson
Laura Sutcliffe
HOUSEHOLD & PERSONAL CARE
Ana Caludi Muldoon
+44 20 3207 7841
Bassel Choughari
+44 20 3465 2675
James Targett
+44 20 3207 7873
INSURANCE
Peter Eliot
Matthew Preston
Sami Taipalus
+44 20 3207 7880
+44 20 3207 7913
+44 20 3207 7866
LUXURY GOODS
Bassel Choughari
Zuzanna Pusz
+44 20 3465 2675
+44 20 3207 7812
MEDIA
Robert Berg
Laura Janssens
Jessica Pok
Sarah Simon
+44 20 3465 2680
+44 20 3465 2639
+44 20 3207 7907
+44 20 3207 7830
+44 20 3207 7931
+44 20 3465 2663
+44 20 3207 7869
+44 20 3207 7876
+44 20 3465 2634
+44 20 3465 2718
+44 20 3207 7877
+44 20 3465 2747
+44 20 3465 2669
MID CAP GENERAL
Robert Chantry
Gunnar Cohrs
Sam England
Benjamin May
Virginia Nordback
Anna Patrice
Simona Sarli
Stanislaus von Thurn
und Taxis
+44 20 3207 7861
+44 20 3207 7894
+44 20 3465 2687
+44 20 3465 2667
+44 20 3465 2693
+44 20 3207 7863
+44 20 3207 7834
+44 20 3465 2631
EQUITY SALES
OIL & GAS
Asad Farid
Jaideep Pandya
+44 20 3207 7932
+44 20 3207 7890
REAL ESTATE
Tina Kladnik
Kai Klose
+44 20 3465 2716
+44 20 3207 7888
TECHNOLOGY
Adnaan Ahmad
Rebecca Alvey
Gergios Kertsos
Daud Khan
Gal Munda
Tammy Qiu
+44 20 3207 7851
+44 20 3207 7910
+44 20 3465 2715
+44 20 3465 2638
+44 20 3465 2746
+44 20 3465 2673
TELECOMMUNICATIONS
Wassil El Hebil
+44 20 3207 7862
Usman Ghazi
+44 20 3207 7824
Siyi He
+44 20 3465 2697
Paul Marsch
+44 20 3207 7857
Barry Zeitoune
+44 20 3207 7859
TOBACCO
Erik Bloomquist
+44 20 3207 7870
UTILITIES
Andrew Fisher
Mehul Mahatma
Lawson Steele
+44 20 3207 7937
+44 20 3465 2698
+44 20 3207 7887
ECONOMICS
Holger Schmieding
Christian Schulz
Robert Wood
+44 20 3207 7889
+44 20 3207 7878
+44 20 3207 7822
E-mail: firstname.lastname@berenberg.com
SPECIALIST SALES
BANKS & DIVERSIFIED FINANCIALS
Iro Papadopoulou
+44 20 3207 7924
CONSUMER
Rupert Trotter
+44 20 3207 7815
HEALTHCARE
Frazer Hall
+44 20 3207 7875
INDUSTRIALS
Chris Armstrong
+44 20 3207 7809
INSURANCE
Trevor Moss
+44 20 3207 7893
MEDIA & TELECOMMUNICATIONS
Julia Thannheiser
+44 20 3465 2676
MATERIALS
Jina Zachrisson
+44 20 3207 7879
TECHNOLOGY
Jean Beaubois
+44 20 3207 7835
SALES (cont.)
LONDON
John von BerenbergConsbruch
Matthew Chawner
Fabian De Smet
Toby Flaux
Karl Hancock
Sean Heath
David Hogg
James Matthews
David Mortlock
Richard Payman
George Smibert
Anita Surana
Paul Walker
SALES
BENELUX
Miel Bakker
Alexander Wace
PARIS
Alex Chevassus
Dalila Farigoule
Clémence La ClavièrePeyraud
FRANKFURT
Michael Brauburger
Nina Buechs
André Grosskurth
Joerg Wenzel
E-mail: firstname.lastname@berenberg.com
+44 20 3207 7808
+44 20 3465 2670
+49 69 91 30 90 741
+49 69 91 30 90 735
+49 69 91 30 90 734
+49 69 91 30 90 743
SCANDINAVIA
Marco Weiss
+44 20 3207 7805
+44 20 3207 7847
+44 20 3207 7810
+44 20 3465 2745
+44 20 3207 7803
+44 20 3465 2742
+44 20 3465 2628
+44 20 3207 7807
+44 20 3207 7850
+44 20 3207 7825
+44 20 3207 7911
+44 20 3207 7855
+44 20 3465 2632
+33 1 5844 9512
+33 1 5844 9510
+33 1 5844 9521
+49 40 350 60 719
SALES (cont.)
ZURICH
Andrea Ferrari
Stephan Hofer
Carsten Kinder
Gianni Lavigna
Jamie Nettleton
Benjamin Stillfried
SALES TRADING
HAMBURG
Sebastian Grünberg
Alexander Heinz
Marc Hosthausen
Gregor Labahn
Patrick Schepelmann
Lars Schwartau
Marvin Schweden
Tim Storm
Philipp Wiechmann
+41 44 283 2020
+41 44 283 2029
+41 44 283 2024
+41 44 283 2038
+41 44 283 2026
+41 44 283 2033
+49 40 350 60 763
+49 40 350 60 359
+49 40 350 60 761
+49 40 350 60 571
+49 40 350 60 559
+49 40 350 60 450
+49 40 350 60 576
+49 40 350 60 415
+49 40 350 60 346
LONDON
Mike Berry
Stewart Cook
Chris McKeand
Simon Messman
Paul Somers
+44 20 3465 2755
+44 20 3465 2752
+44 20 3207 7938
+44 20 3465 2754
+44 20 3465 2753
Zubin Hubner
Jessica London
Emily Mouret
Peter Nichols
Kieran O'Sullivan
Jonathan Saxon
Bob Spillane
+1 646 445 5572
+1 646 445 7218
+1 415 802 2525
+1 646 445 7204
+1 617 292 8292
+1 646 445 7202
+1 646 445 5574
US SALES
BERENBERG CAPITAL MARKETS LLC
Member FINRA & SIPC
ELECTRONIC TRADING
Matthias Führer
+49 40 350 60 597
Julian Winter
+49 40 350 60 463
SOVEREIGN WEALTH FUNDS
Max von Doetinchem
+44 20 3207 7826
CRM
Edwina Lucas
Ellen Parker
Greg Swallow
+44 20 3207 7908
+44 20 3465 2684
+44 20 3207 7833
INVESTOR ACCESS
Jennie Jiricny
+44 20 3207 7886
EVENTS
Charlotte Kilby
Natalie Meech
Charlotte Reeves
Sarah Weyman
Hannah Whitehead
+44 20 3207 7832
+44 20 3207 7831
+44 20 3465 2671
+44 20 3207 7801
+44 20 3207 7922
E-mail: firstname.lastname@berenberg-us.com
Colin Andrade
Burr Clark
Julie Doherty
Scott Duxbury
Kelleigh Faldi
Shawna Giust
Tristan Hedley
+1 646 445 7214
+1 617 292 8282
+1 617 292 8228
+1 646 445 5573
+1 617 292 8288
+1 646 445 7216
+1 646 445 5566
CRM
Laura Cooper
+1 646 445 7201
INVESTOR ACCESS
Olivia Lee
+1 646 445 7212
15