Financial messaging provider SWIFT said that its latest index data captured payments growth level in the UK economy during the first quarter of 2013 equivalent to a year-on-year gross domestic product (GDP) growth rate of 1.3%. By the end of June, the SWIFT index forecasts the UK economy will continue its recovery, with a year-on-year GDP growth of 1.6% expected.
The SWIFT index, which captures global payments traffic, now clearly indicates an economic growth recovery for the four aggregates – the Organisation for Economic Co-operation and Development (OECD), the UK, the 27 European Union member states (EU27) and Germany (DE) – and a slightly moderating growth for the US.
For EU27, the SWIFT index continues to point to the end of recession, from -0.6% in Q412 to 0.4% in Q113. Continuing the gradual recovery, the SWIFT Index forecasts that the EU27 bloc will experience GDP growth of 0.6% by Q213. For Germany, GDP growth is improving from 0.4% during Q412 to 0.8% at the end of Q113, a trend set to continue with the SWIFT index forecasting that the German economy will reach 0.9% growth by Q213.
Although the US economy is expected to grow at a slightly lower rate in Q2, when the SWIFT index forecasts a US GDP growth rate of 1.3%, they are still a positive contributor to the OECD/global moderate recovery.
SWIFT payments volumes predict that collectively, that OECD growth will remain flat in Q2 from 1.1% year-on-year GDP growth in Q113. The recovery from the decreasing trend that started during the second half of 2010 will be gradual and probably gain momentum during the second half of 2013.
“Utilising our own algorithm based on OECD data and SWIFT payments volumes, the SWIFT index forecasts adjust accordingly on a monthly basis,” said Andre Boico, head of pricing and analytics, SWIFT.
“Varying marginally from the February index, the March index indicates that the US economy will grow at a slower rate than previously forecast due to weaker than expected March payments volumes. However, the OECD countries and the UK economy in particular, will continue to experience strong GDP growth in 2013.”
The SWIFT index, launched in March 2012, uses global financial payments volumes based on an average of two million SWIFT payments messages per day and to date has successfully predicted OECD GDP growth with limited deviation.
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