Global Scenarios - Danske Analyse - Danske Bank
Global Scenarios - Danske Analyse - Danske Bank
Global Scenarios - Danske Analyse - Danske Bank
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<strong>Global</strong> <strong>Scenarios</strong><br />
the recovery in credit growth and negatively affect investments and private<br />
consumption.<br />
2). If Greece begins to question the austerity measures and fails to deliver on<br />
its promises this would spook the markets. As an early warning that this<br />
could happen, the Greek labour minister recently announced that Greece<br />
wants to renegotiate the pension reform agreed with the EU and IMF. Greece<br />
is arguing for a smaller reform and for full implementation to be later. If we<br />
see more Greek foot-dragging debt restructuring discussions could reignite.<br />
And then there is always the risk that Greece announces new upward revisions<br />
to debt and deficit figures.<br />
3) Spanish saving banks, which are heavily exposed to the faltering Spanish<br />
property market, are in difficulties. A EUR99bn fund for orderly bank restructuring<br />
(Frob) is in place to recapitalise saving banks when necessary and<br />
a number of mergers are expected to take place in the coming months. This<br />
process could unveil some negative surprises. There could be ripple effects<br />
and uncertainty about where the losses ultimately will have to be taken could<br />
spark a new crisis.<br />
ECB to move slowly<br />
Source: Reuters Ecowin<br />
There are upside risks too of course. The current crisis could disappear as<br />
quickly as it came and the euro area economy could then rebound much more<br />
strongly.<br />
Euro area macro forecast<br />
2010 2011 Calendar year average<br />
% Change q/q AR Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011<br />
GDP 0.8 2.5 2.1 2.2 1.9 2.0 2.0 2.0 -4.0 1.3 2.1<br />
Private Consumption -0.9 0.9 1.1 1.2 1.1 1.3 1.3 1.4 -0.5 0.1 1.2<br />
Private Fixed Investments -3.4 0.7 2.4 4.1 4.0 4.4 4.4 4.3 -10.8 -2.0 3.8<br />
Change in inventories 1 0.9 0.3 0.0 0.0 0.0 0.0 0.0 0.0 -0.8 0.4 0.0<br />
Public Consumption 1.8 1.5 1.4 1.4 0.7 0.9 1.0 1.0 2.3 1.4 1.1<br />
Exports 10.4 8.1 6.4 5.6 5.0 4.9 4.8 4.7 -12.6 7.9 5.4<br />
Imports 8.9 5.3 4.8 4.8 4.4 4.6 4.6 4.6 -11.4 5.8 4.6<br />
Net exports 1 1.0 0.4 0.3 0.1 0.0 0.0 -0.1 -0.1 -0.8 0.9 0.4<br />
Unemployment rate (%) 10.0 9.9 9.8 9.7 9.6 9.5 9.5 9.4 9.4 9.8 9.5<br />
CPI (y/y) 0.9 1.0 1.2 1.4 1.5 1.5 1.5 1.6 0.3 1.4 1.6<br />
Core CPI (y/y) 0.7 0.5 0.6 0.7 1.0 1.0 1.0 1.1 1.4 0.8 1.0<br />
Public Budget 2 -6.3 -6.7 -6.0<br />
Public Gross Debt 2 78.7 84.8 88.5<br />
Current Account 2 -0.7 -0.3 -0.2<br />
ECB refi rate 3 1.00 1.00 1.00 1.00 1.00 1.00 1.25 1.50 1.00 1.00 1.50<br />
Note: 1: Contribution to GDP growth, 2: Pct. of GDP, 3:End of period. Source: Reuters Ecowin and <strong>Danske</strong> <strong>Bank</strong> projections.<br />
17 | June 2010<br />
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