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EUREN Summer Forecast 2009

Further deterioration of global environment - N.3-2009

20/07/2009

For 2010, a return to moderate growth rates is expected. Driving forces will be a slight recovery of world trade and a bounce back of investment after the extraordinary strong decline in this year. All in all, GDP will increase only by 0.7% in 2010.

In our current forecast we expect a large fall in the world trade volume in the current year and a very slow recovery in 2010. This kind of profile is reflected in the predicted GDP growth rates, both for the US and Japan, with just a slight recovery in 2010 after the large correction in 2009. This recovery is expected to come both from internal demand, fuelled by stimulation packages and financial stabilisation, and from external markets, which should follow the world trade trends.

For oil prices, we assume they will fluctuate around the equilibrium level of around 70$/Barrel (Brent). This price is close to the average marginal cost of production of current oil fields. Even if this means that oil prices will be somewhat higher on average in the next year, inflation will remain under control, due to a very moderate final demand growth, and it will allow monetary policy to keep an expansionary stance till the end of 2010.

Egalement dans cette lettre :

- Editorial : What type of recovery after the crisis? par Alain Henriot

- Coe-Rexecode Leading Indicator for the Euro Area ( Indicateur du rythme d'activité sous-jacent pour la zone euro ) par Jacques Anas

- Forecast of the EUREN/CEPREDE High Frequency Model

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