Home > EMU Crisis, Growth > Commission Forecasts Watch – November 2014 Edition

Commission Forecasts Watch – November 2014 Edition

November 4, 2014 Leave a comment Go to comments

Update (11/10): Well, I typed a few numbers wrong,  for France and Finland (thanks to Tadej Kotnik for pointing this out). I corrected the data, and stroke down the remarks on Finland that with the corrected data does not beat the expectations. Apologies to the readers

Today the Commission issued its Autumn forecast. It is therefore time to update my forecast watch. Here it is:

2014_11_03_Forecast_Watch_01

Last March, my crystal ball gave me a forecasted growth  of 0.55% for the EMU, while the Commission forecasted 1.2% (In March it was 1.1% but it had then been revised in May). As of today (if things do not get worse, in which case I will be even closer), my forecast error is -0.25%, and the Commission’s is +0.4% I win, the Commission loses.

After 2013, when they were remarkably close, Commission forecasts seem to have diverged once more, at least last Spring. We’ll have to see what the final figure for 2014 is (My crystal ball forecast update gives 0.65%).

But besides playing with numbers, the interesting thing about this year’s Autumn forecasts, is that growth has been revised downwards especially for core countries.

2014_11_03_Forecast_Watch_03

In particular since last Spring the mood has changed about Germany, whose growth forecast has been slashed of 0.5% for 2014 (in just a few months, it is worth reminding it), and of 0.9% (almost halved) for 2015. Also interestingly, the only core country whose expectations have been revised upwards, Finland, is also the only one that got rid of its excess savings and current account surplus.

We all know that the disappointing performance of Germany is due, mostly, to geopolitical uncertainty and low growth in emerging economies. When will our German friends understand that putting all eggs in the basket of foreign demand is risky?

  1. nemobis
    November 14, 2015 at 10:22 am

    > When will our German friends understand that putting all eggs in the basket of foreign demand is risky?

    Apparently Finland didn’t understand either: «Sipila – who has warned Finland could be the next Greece – is pushing for 10 billion euros ($10.8 billion) of annual savings by 2030, including 4 billion euros by 2019. […] One alternative to austerity – increased spending to stimulate growth – is not on the table as government debt already breaches the EU’s 60 percent limit.»
    http://uk.reuters.com/article/2015/11/11/uk-finland-economy-idUKKCN0T012620151111

    What’s a good piece that one can share with Finnish friends to explain how in such a case debt is not the first thing to worry about and austerity doesn’t help recovery? It’s amazing how many still believe the opposite. A recent one is http://www.nytimes.com/2015/10/23/opinion/keynes-comes-to-canada.html

  1. February 3, 2015 at 11:31 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: