1 / 64

Philippe d’Arvisenet Global Chief Economist ECONOMIC RESEARCH DEPARTMENT

Philippe d’Arvisenet Global Chief Economist ECONOMIC RESEARCH DEPARTMENT. THE WORLD ECONOMIC OUTLOOK AMSTERDAM, March 2007. Chart 1. Chart 2. I - UNITED STATES. BELOW POTENTIAL GROWTH IN 2007 The housing market correction is not over yet

lynnea
Télécharger la présentation

Philippe d’Arvisenet Global Chief Economist ECONOMIC RESEARCH DEPARTMENT

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Philippe d’ArvisenetGlobal Chief Economist ECONOMIC RESEARCH DEPARTMENT THE WORLD ECONOMIC OUTLOOK AMSTERDAM, March 2007

  2. Chart 1

  3. Chart 2

  4. I - UNITED STATES

  5. BELOW POTENTIAL GROWTH IN 2007 • The housing market correction is not over yet • Slowdown mitigated by temporary phenomenon: oil prices down, unexpected warm weather... • Consumption is expected to weaken • GDP growth close to 2% in 2007 • But the economy will rebound later : once inventory correction (housing and industry) is over

  6. LOWER INFLATIONARY PRESSURES • Upward pressures from energy prices have receded • Gradual decline in core inflation • Slower growth in activity alleviate tensions • Increases in shelter costs to moderate • Fed • Fed’s view to change • Ease expected for the end of Q2 EXTERNAL IMBALANCES • The current account deficit is expected to remain close to 6.5% GDP • Slower domestic demand and a weaker dollar should limit the slippage

  7. Chart 3

  8. Chart 4

  9. Chart 5

  10. Chart 6

  11. Chart 7

  12. Chart 8

  13. Chart 9

  14. Chart 10

  15. Chart 11

  16. Chart 12

  17. Chart 13

  18. Chart 14

  19. Chart 15

  20. Chart 16

  21. Chart 17

  22. Chart 18

  23. Chart 19

  24. Chart 20

  25. Chart 21

  26. Chart 22

  27. Chart 23

  28. Chart 24

  29. Chart 25

  30. Chart 26

  31. Chart 27

  32. II - EUROZONE

  33. ECONOMIC ACTIVITY • Growth above potential in 2006 • Solid domestic demand. • Weak external sector (with the exception of Germany) • Deceleration in 2007 • Impact of VAT hike in H1 2007 (however, lower-than-expected) • External demand: the impact of US slowdown • Impact of the Euro appreciation • Lagging impact of monetary tightening

  34. Inflation : what ECB looks at • Pressure on core inflation • Wage negotiations (Germany and Italy) • Higher capacity use rebuilds pricing power • Headline inflation impacted by favourable base effects until summer • Monetary stance • M3 growth reached a record high since the launch of the Euro • Lending to household is slowing, lending to corporate is accelerating • Interest rates are entering in neutral territory • Refi rate at 4% in mid-2007. A pause is to follow

  35. STRUCTURAL ISSUES • Challenges : • low potential growth • the cost of aging • A lot remains to be done : • fiscal consolidation • goods market reform (privatization, competition, barriers to entry etc…) • labour market reform (disincentives to work, disincentives to create jobs have to be addressed…) • The political impediments

  36. Chart 28

  37. Chart 29

  38. Chart 30

  39. Chart 31

  40. Chart 32

  41. Chart 33

  42. Chart 34

  43. Chart 35

  44. Chart 36

  45. Chart 37

  46. Chart 38

  47. III - JAPAN

  48. ECONOMIC GROWTH HEADING TOWARDS A SOFT PATCH • GDP growth, 2.2% in 2006, likely to decelerate below potential in H1 07, before accelerating again, up 2% at most in 2007 • Final domestic demand is supportive • Inventories correction will substact to growth early in 2007 • Slowdown in exports but also in investment

  49. BoJ hiked last month • Credibility issue, risks seen with asset prices • BoJ will remain cautious (long pause expected) • The yen should gradually strengthen versus the dollar (unwinding of carry trade...) • Japan core inflation at zero and below zero with international standards

  50. Chart 39

More Related