SWIFT More Bullish on Outlook for UK Economy

SWIFT has forecast that the UK economy will continue to grow at a faster rate than in the first quarter of 2013 as it continues its economic recovery, with a year-on-year gross domestic product (GDP) growth rate of 1.1%. This follows SWIFT’s successful Q1 forecast that the UK would move out of a negative growth rate and avoid a triple-dip recession.

The financial messaging provider, which has released its latest SWIFT Index data based on an average of two million SWIFT payments messages per day, also expects the US economy will continue to grow during Q2 as the Index forecasts a 1.7% year-on-year GDP growth rate. A similar growth rate, 1.6 % is forecast for Q3 pointing to a slower growth in the US compared to Q113.

For the European Union’s 27 members (EU27), the SWIFT Index continues to point to the end of recession for the bloc with a gradual recovery forecast for Q2 at a year-on-year GDP growth rate of 0.6%. Contrary to other growth forecasts, the SWIFT Index predicts that German GDP growth will continue to grow, albeit at a slower rate remaining flat during Q2 and Q3 with a year-on-year GDP growth rate of 0.9% forecast.

A summary table below shows the GDP estimates derived from the SWIFT Index and the forecast trend compared to the last actual figure (Q113).

SWIFT Index
 

(1)  
Published by OECD & downloaded on 10 May
2013. When no actual is available (for OECD global, EU27 and Germany), SWIFT
will use its previous nowcasted GDP growth rate. 

  (2)   
Direction: sign of the GDP forecast figure.
Positive growth rate (>0%) is equivalent to ‘Growing’. Negative growth rate
(<0%) is equivalent to ‘Contracting’. Flat is used when GDP shows no change
at 0%.

  (3)   
Rate of change: SWIFT compares the GDP growth
rate forecast (here Q2-2013) to the last known actual (Q4-2012). If the
forecasted GDP growth rate is higher than the last actual, then the “rate of
change” can be ‘Faster’,’ Slightly Faster’ or ‘From Contracting’ (if there is a
change in sign from negative growth to positive growth). If the forecasted GDP
growth rate is lower than the last actual, then the “rate of change” can be
‘Slower’, ’Slightly Slower’ or ‘From Growing’ (if there is a change in sign
from positive growth to negative growth).

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