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Global GDP growth to turn positive in Q3 2009
The enormous fiscal and monetary support combined with the collapse in
inflation is likely to lift the global economy out of recession by the third quarter of 2009. Q4 2009 should then see GDP growth at 1.3% yoy, well below the trend rate of around 3%, but an improvement from the expected trough of -0.9% yoy in the first quarter of 2009.
A recovery in consumption will probably lead the recovery in output. US
consumer spending is likely to grow in the first quarter, after two quarters of negative growth, albeit at a pedestrian pace of just over 1.5% annualised. The US consumer should gain more traction in the second half of 2009, growing at a 2.5% pace, as tax cuts and improved social benefits kick-in. In Europe as a whole, consumption is expected to be sluggish through the first half of 2009, but on an improving path as the year progresses, particularly in the UK and France.
Increases in infrastructure spend in China and the US are likely to add traction to the recovery from the summer onwards. We predict that capex, as always, will lag the recovery in output, with a recovery in capex not anticipated until the tail-end of 2009. This is especially problematic for Germany, a major exporter of capital goods. Moreover, German capex spend tends to follow the export cycle. The risk is therefore that German investment does not pick up until 2010. The 1.5% contraction in German GDP this year could be the most severe Germany has experienced since unification.
Though the worst ought to be over by the summer, the patchwork quilt of activity forecast across the regions suggests that a resumption of strong synchronised global growth such as that witnessed in the 2004-07 period is still a distant dream.
Sounds good, if comes true? Cool shower ...
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