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Eurozone recession means UK fastest growing major economy in Europe in 2013 and 2014
A distinctly worse Eurozone outlook is likely, according to the latest global forecasts by Cebr, the economics consultancy. The think tank now forecasts that the Eurozone recession will continue through 2013 and only marginal growth is likely for 2014. Although UK growth is likely to be held back by the weakness in its Continental trading partners, UK GDP growth for 2013 and 2014 is likely to be faster in each year than in any of the major European economies.
In its new quarterly edition of Global Prospects, the think tank predicts sluggish growth at best for the world economy for the next four years. Moreover, the outlook could well be worse than this – the risk of disruption through Middle East political disputes or through a collapse in the Eurozone would make prospects distinctly worse, at least in the short term.
The forecast growth for 2012 and 2013 for the world economy has been further revised down very slightly since the last projections were made in August (see Table 2), although the forecast for 2014‐2016 remains on average the same.
If there are no unusual disruptions to supply in the Middle East, the price of oil is forecast to drop by about $5 per barrel on average in 2013 and primary commodity prices by 8% because of the weak world economy and its impact on demand.
The fastest growing economies are in the emerging markets. The eight main Sub‐Saharan African economies are forecast to grow by 4.6% in 2013 and 5.1% in 2014; the Middle East by 3.3% in 2013 and 4.2% in 2014 and the ASEAN economies are forecast to grow by 4.5% in 2013 and 4.9% in 2014.
“Even assuming that the problems of the euro do not cause an economic melt‐down before the German elections next year, we are looking at a very weak economic outlook in Europe for the next two years” comments Tim Ohlenburg, senior economist at Cebr and main author of the report.
“The economic situation in some parts of Europe is moving from bad to catastrophic” comments Douglas McWilliams, Chief Executive of Cebr and a co‐author of the report. “There is a danger that the economic problems will spill over into social breakdown in many areas of Europe as unemployment soars and governments run out of money.”
