Nomura Securities Global Economic Outlook for 2012
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Nomura Securities Global Economic Outlook by Paul Sheard
"In our global outlook for 2012, we argue that growth next year is likely to slow to +3.2% as the eurozone enters a recession (we expect GDP growth here to fall by 1.0% in 2012)."
"Regarding the eurozone, we see policymakers keeping the single currency intact by taking key steps towards fiscal union, with the ECB’s role being critical, and after cutting the policy rate to its effective lower bound (75bp), we expect the ECB to launch QE in early 2012. Headwinds, especially from the euro area, will likely keep the UK on the brink of recession until the Olympics arrive in Q3 and we expect inflation to slow sharply toward target in 2012. In response to weak growth, we expect the BoE to announce QE extensions of £50bn in February and another £25bn in May."
"With regards to the US, absent a eurozone blow-up, we forecast the economy to sustain moderate growth of +2.5% in 2012 and expect the Fed to clarify its “forward guidance” and launch around $350bn of MBS-focused QE3 in Q1 2012."
"On Japan, we expect +2.3% real GDP growth in 2012 driven by reconstruction spending and with upward pressure on the yen set to persist, we expect the BOJ to lift its asset purchases by ¥5trn by end-March 2012."
"And with regards to China, we forecast +7.9% growth in 2012 – growth is likely to slow rapidly in H1 while policy is set to be loosened gradually and moderately with a lagged effect in H2."
"In our global outlook for 2012, we argue that growth next year is likely to slow to +3.2% as the eurozone enters a recession (we expect GDP growth here to fall by 1.0% in 2012)."
"Regarding the eurozone, we see policymakers keeping the single currency intact by taking key steps towards fiscal union, with the ECB’s role being critical, and after cutting the policy rate to its effective lower bound (75bp), we expect the ECB to launch QE in early 2012. Headwinds, especially from the euro area, will likely keep the UK on the brink of recession until the Olympics arrive in Q3 and we expect inflation to slow sharply toward target in 2012. In response to weak growth, we expect the BoE to announce QE extensions of £50bn in February and another £25bn in May."
"With regards to the US, absent a eurozone blow-up, we forecast the economy to sustain moderate growth of +2.5% in 2012 and expect the Fed to clarify its “forward guidance” and launch around $350bn of MBS-focused QE3 in Q1 2012."
"On Japan, we expect +2.3% real GDP growth in 2012 driven by reconstruction spending and with upward pressure on the yen set to persist, we expect the BOJ to lift its asset purchases by ¥5trn by end-March 2012."
"And with regards to China, we forecast +7.9% growth in 2012 – growth is likely to slow rapidly in H1 while policy is set to be loosened gradually and moderately with a lagged effect in H2."
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