Citi recently published its 80-page Global Economic Outlook and Strategy report, which provides up-to-date commentary and forecasts for the major economies covered by the bank's army of economists.
Things are still looking pretty stagnant worldwide, and rough for Europe. From Chief Economist Willem Buiter:
We make only modest changes to our growth forecasts this month, and expect global growth of 2.5 percent in 2012 and 2.8 percent in 2013 at current exchange rates (versus 2.6 percent and 2.7 percent respectively last month). Our forecast remains well below those of the consensus and IMF, reflecting in particular a much weaker outlook for the euro area and a modestly weaker outlook for many emerging markets.
In the wake of today's US jobs number, here's a reminder that we could be doing a lot worse. We've rounded up the numbers and analysis from Buiter's team on the economies they cover that have unemployment rates higher than the US' 8.3 percent.
The UK won't fully recover until at least 2016.
- 2012: 8.4 percent
- 2013: 9.0 percent
Citi's Michael Saunders cut his forecasts for the UK due to significant headwinds from the euro crisis, high household debt, poor credit availability, and fiscal drag from austerity measures.
Czech Republic hit by noisy politics and the euro zone crisis.
- 2012: 8.6 percent
- 2013: 8.7 percent
Citi analyst Jaromir Sindel cut his forecasts due to a decline in the country's confidence index and further economic trouble for major trading partners in the Eurozone.
Slovenia will feel the impact of continued fiscal consolidation.
- 2012: 9.0 percent
- 2013: 10.2 percent
Citi's Jaromir Sindel just cut his GDP forecast on account of a weak construction sector, declining confidence, and an increase in austerity due to a wider fiscal deficit.
Turkey looks to be expanding very slowly.
- 2012: 9.4 percent
- 2013: 10.2 percent
Citi's Ilker Domac and Gultekin Isiklar note that GDP fell slightly in the beginning of the year, then rebounded modestly last quarter. Sluggish growth, lower oil prices, and slow inflation are all worries for the economy, but fundamental trends in inflation make easing unlikely.
France will experience only a 'small recession.'
- 2012: 9.6 percent
- 2013: 9.4 percent
Citi's Guillaume Menuet expects that a recession began this quarter and will continue for the next two. Rising unemployment from last year will be challenging for a government that pledged to combat it.
Italy will be pressured by funding costs.
- 2012: 10.6 percent
- 2013: 11.9 percent
Citi's Jurgen Michels lists a litany of concerns for Italy; uncertainty over its ability to stick to deficit reduction plans, the upcoming 2013 elections, the constant fear of Grexit, and the Spanish crisis which will combine to keep things on a knife edge through the end of the year.
Hungary remains dependent on the good graces of the EU and IMF
- 2012: 11.8 percent
- 2013: 11.0 percent
Citi's Eszter Gargyan notes that several recent tax and social policies will raise Hungary's 2013 budget deficit well above its official target, possibly compacting its loan agreement with the EU and IMF.
Poland's central bank slow to react to deteriorating conditions.
- 2012: 12.9 percent
- 2013: 11.7 percent
Citi analyst Piotr Kalisz thinks weak growth merits quick easing, however, any move is unlikely until next year. Despite a lower reduction in deficits that might push up yields, Poland's full year borrowing needs have already been met for the most part.
Egypt will see continuing political uncertainty.
- 2012: 13.0 percent
- 2013: 14.7 percent
The hoped for resolution of political uncertainty did not happen with Mohammed Mursi's election. Economic policy is likely to remain unchanged, and falling foreign exchange reserves are a worry as the country attempts to maintain a stable exchange rate.
Slovakia's export driven economy is having a tough time.
- 2012: 13.4 percent
- 2013: 13.6 percent
Citi's Jaromir Sindel recently cut forecasts for next year as the country is export oriented, and subject to external shocks to its foreign trade.
Ireland showing good signs despite a tough first quarter.
- 2012: 14.4 percent
- 2013: 15.6 percent
Ireland took a 1.1 percent hit to real GDP last quarter, but nominal growth looks promising, so Citi's Michael Saunders has cut his estimate for Ireland's debt to GDP ratio in coming years.
Portugal likely in for another round of austerity.
- 2012: 16.2 percent
- 2013: 18.7 percent
Citi's Jurgen Michels cut 2013 forecasts, anticipating a double blow to Portugal's economy from fiscal tightening as part of a second Troika programme and continued escalation of the Spanish crisis.
Greece will see a 5th straight year of sharp GDP contraction.
- 2012: 23.6 percent
- 2013: 29.0 percent
Citi's Jurgen Michels is not optimistic about Greece's prospects as creditor countries seem unwilling to ease rescue terms. He anticipates a 90 percent chance of the country leaving the Eurozone, probably in the next two or three quarters.
Spain will likely need a sovereign bailout by the end of the year.
- 2012: 24.7 percent
- 2013: 26.1 percent
Citi's Ebrahim Rahbari views Spain as already partially into a Troika program, betting help with its banks in return for fiscal tightening. It will likely enter a full agreement for financing help by the end of the year.
South Africa in for sluggish growth, and sluggish debt reduction.
- 2012: 25.7 percent
- 2013: 25.2 percent
Citi's David Cowan highlights an unfavorable external environment, which will keep growth subpar through the rest of the year. 2013 should be an improvement, but only slightly.
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