International forecasts - what's going up? what's going down?

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Last week I had a look at what we are expecting to happen to manufacturing sectors in the UK in 2013. Today I look at some international and global indicators.

Overall 2013 is looking brighter than 2012 with global growth, world trade and stock market prices picking up. Inflation and real commodity prices are expected to fall. Yet challenges and risks remain including on-going issues in the Eurozone and the stability of the middle-east so we do not expect the year to be plain sailing. Our own Executive survey shows that UK manufacturers are expecting things to pick up in 2013 but they also recognise both the risks they will face and the opportunities that exist in the coming year.

Indicator

Growth forecast(% y/y)Highlights/Key issues
Global growth

↑3.5%

(2005 PPP)

- Major advanced economies (G7) will drag on global economic output

- Emerging markets expecting to see stronger growth

- Financial markets have strengthened

- Risk of Eurozone break-up diminished throughout 2012

World Trade

↑4.2%

- Pick-up in growth in emerging and developing markets will drive increase in world trade

Inflation

↓2.4%

- Spare capacity in the global economy will lead to lower inflation that 2012

- Overall, real commodity prices expected to fall

Oil price

↓8%

- New supplies coming online

- Easing geopolitical tensions will lower risk premium, driving oil prices down

Stock Market

↑7%

- Risk of disruption from a breakup of the EZ has reduced

- Stronger global growth, particularly in the US and emerging markets, likely to improve overall confidence

Source: Oxford Economics

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