a fragmenting europe in a changing worldc23388e2-b495-49ae...swiss re / eeag / kof 20.03.2019...

A Fragmenting Europe

in a Changing World

EEAG Report on the European Economy 2019

Torben Andersen,

Giuseppe Bertola,

John Driffill,

Clemens Fuest,

Harold James,

Jan-Egbert Sturm,

Branko Uroševic

20.03.2019Swiss Re / EEAG / KOF 2

0

50

100

150

200

250

300

350

400

450

08 09 10 11 12 13 14 15 16 17 18 19

Global Economic Policy Uncertainty (EPU) is calculated as the GDP-weighted average of monthly EPU index values for the United States, Canada, Brazil, Chile, the United Kingdom, Germany, Italy, Spain, France, Netherlands, Russia, India, China, South Korea, Japan, Ireland and Australia using GDP data in current prices from the IMF World Economic Outlook Database.

Source: Baker et al. (2016), www.policyuncertainty.com; last accessed on 3 February 2019.

Global Economic Policy Uncertainty Index

Index (2007 = 100)

© CESifo

Global financial

crisis

Euro area crisis, US fiscal fights,

China leadershiptransition

Europeanimmigration

crisis

Brexit vote

US elections


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

-4

-2

0

2

4

6

8

Source: IMF International Financial Statistics; CPB Netherlands Bureau for Economic Policy Analysis;last accessed on 15 March 2019. © CESifo

World Economic Growtha and Growth in Industrial Production

a Purchasing Power Parity (PPP) weighted aggregate year -over-year real GDP growth rate.

Real GDP growth

%in Change over previous year's quarter

-15

-10

-5

0

5

10

15

Growth in real industrial production

Change over previous year's month in %

20.03.2019Swiss Re / EEAG / KOF 4Source: CPB Netherlands Bureau for Economic Policy Analysis; last accessed on 15 March 2019; EEAG calculations.

2011 2012 2013 2014 2015 2016 2017 2018

-10

-5

0

5

10

15

20

100

105

110

115

120

125

130

Emerging and developing countries

Advanced economies3-month moving average level

Index (2010 Q1 = 100)annualised monthly growth

in %-points

World trade

© CESifo


2011 2012 2013 2014 2015 2016 2017 2018 2019

Europe Americas Oceania Asia Africa World

Source: ifo World Economic Survey I/2019.

ifo World Economic SurveyEconomic expectations for the next 6 months

© CESifo

Worse

Better

About thesame


-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Japan United Kingdom United States Euro area China

Source: IMF World Economic Outlook, November 2018; last accessed on 3 February

Government Structural Budget Balances

% of trend GDP

© CESifo

Forecastperiod


2011 2012 2013 2014 2015 2016 2017 2018 2019

Euro area United Kingdom United States Japan

Source: US Bureau of Economic Analysis; Eurostat; ESRI; National Bureau of Statistics of China; last accessed on 3 February 2019; EEAG forecast.

Economic Growth by RegionReal GDP percentage change from previous year

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5%

© CESifo

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

China (right-hand scale)

%

Forecast period


00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

-4

-3

-2

-1

0

1

2

3

Source: IMF World Economic Outlook, IMF International Financial Statistics; last accessed on 3 February 2019.

Output gap

Deviation from potential in %

© CESifo

Output Gap and Inflation in Advanced Economies

-2

-1

0

1

2

3

4

5Change over previous year's month in %

Inflation


-3

-2

-1

0

1

2

3

4

5

6

7

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: IMF International Financial Statistics; last accessed on 3 February 2019; EEAG calculations.

%

© CESifo

Inflation in the World and Oil Price MovementsChange overprevious year's month in %

Forecast

period

Forecast based on the assumption that oil prices remain steady from January 2018 onwards.

-60

-40

-20

0

20

40

60

80

100

120

140%

-DollarsOil price changes in USInflation in the worldInflation in the euro area


-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2011 2012 2013 2014 2015 2016 2017 2018 2019

Construction Consumers IndustryRetail trade (Non-fin.) services Financial services

? Arithmetic means of selected (seasonally adjusted) balances on business and consumer tendency survey questions. Balances are the differences between the percentages of positive and negative replies. These are subsequently normalisedto have an average of 0 and variance of 1 for the period from 1985 onward. Source: European Commission; last accessed on 3February 2019; EEAG calculations.

Confidence Indicatorsª for Different Sectors in the European Union

Standardised balance

© CESifo


-2

-1

0

1

2

3

2011 2012 2013 2014 2015 2016 2017 2018 2019

External balance Changes in inventories

Gross fixed capital formation Government consumption

Private consumption GDP growth

Forecast

period

Demand Contributions to GDP Growth in the European Union a

Source: Eurostat; last accessed on 3 February 2019; EEAG calculations and forecast.

%

a Gross domestic product at market prices (prices of the previous year). Annual percentage change.

© CESifo


3

4

5

6

7

8

9

10

11

12

13

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

European Union Euro area United Kingdom

Source: Eurostat; last accessed on 3February 2019; EEAG calculations and forecast.

Unemployment Rates in the Euro Area, the United Kingdom and the European Union

%

© CESifo

Forecast period

A Fragmenting Europe

in a Changing World

EEAG Report on the European Economy 2019

Torben Andersen,

Giuseppe Bertola,

John Driffill,

Clemens Fuest,

Harold James,

Jan-Egbert Sturm,

Branko Uroševic


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2011 2012 2013 2014 2015 2016 2017 2018 2019

Latin America and Russia Asia North America

Western and Central Europe World GDP Growth

Forecastperiod

Regional Contributions to World GDP Growth a

a Based on market weights.Source: National statistical offices; EEAG calculations and forecast.

%

© CESifo

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