Commission Forecasts Watch – November 2014 Edition
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:
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.
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?