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LONG-TERM ECONOMIC FORECASTS

In addition to their annual forecasts, we regularly ask our country panellists to provide longer-term forecasts for the next 5 to 10 years. We undertake these special surveys across our publications Consensus Forecasts, Asia Pacific Consensus Forecasts, Latin American Consensus Forecasts and Eastern Europe Consensus Forecasts twice a year and the resulting tables and analysis are displayed in both the hard-copy and PDF versions of the publications.

Long-term forecasts are updated every April and October (in Consensus Forecasts, Asia Pacific Consensus Forecasts and Latin American Consensus Forecasts) and March and September (in Eastern Europe Consensus Forecasts) for each of the countries listed below.


Consensus Forecasts Asia Pacific
Consensus Forecasts
Latin American
Consensus Forecasts
Eastern Europe
Consensus Forecasts
United States Australia Argentina Czech Republic
Japan China Brazil Hungary
Germany Hong Kong Chile Poland
France India Mexico Russia
United Kingdom Indonesia Venezuela Turkey
Italy Japan Colombia Bulgaria
Canada Malaysia Peru Croatia
Euro zone New Zealand   Estonia
Netherlands Philippines   Latvia
Norway Singapore   Lithuania
Spain South Korea   Romania
Sweden Taiwan   Slovakia
Switzerland Thailand   Slovenia
      Ukraine


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The table below shows a portion of the data from one of our surveys for Long-Term forecasts in Germany (from our October 2015 Consensus Forecasts survey) and the text below is taken from the same source.



GERMANY
* % change over previous year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021-20251
Gross Domestic Product* 3.7 0.4 0.3 1.6 1.8 1.9 1.6 1.5 1.5 1.5 1.3
Private Consumption* 1.3 1.0 0.6 0.9 2.0 1.9 2.0 1.7 1.6 1.5 1.0
Mach. & Equip. Investment* 6.8 -2.6 -2.3 4.5 3.9 3.7 3.5 2.5 2.2 2.1 2.2
Industrial Production* 7.4 -0.4 0.1 1.5 1.4 2.1 1.7 1.6 1.5 1.5 1.3
Consumer Prices* 2.1 2.0 1.5 0.9 0.3 1.4 1.8 2.0 2.0 1.9 1.6
Current Account (Euro bn) 165 187 180 215 244 242 231 223 217 211 204
10-Yr Treasury Bond Yield, %2 1.8 1.5 1.9 0.5 0.83 1.14 1.8 2.4 2.8 3.2 3.0

1 Signifies average for period. 2 End period. 3 End Jan. 2016. 4 End Oct. 2016

Seven years on from the global financial crisis, G-7 and Western European activity continues to cruise at relatively modest speed. As the charts on page 2 (opposite) illustrate, for many, potential long-term growth prospects have shifted down noticeably from 10 years ago, by one full percentage point in some cases. Despite the G-7 arguably experiencing better circumstances now than at the full brunt of the 2009 recession, soft growth fundamentals remain uppermost in policymakers' minds. Indeed, concerns over a marked slowdown in China (which had hitherto been supporting global demand while Western economies waned) have triggered new financial jitters and put downward pressure on commodity prices. What will sustain stronger growth in a mutually interlinked world economy? Certainly, GDP growth and US and UK labour markets appear to be on firmer footing now, while even the Euro area is showing signs of a modest pickup after the debt crisis a few years ago. However, the inability of investment spending to expand significantly, even with monetary conditions still extremely accommodative, is a major concern for policymakers. It may also underpin our panellists’ assessment of longer-term GDP below pre-crisis levels of potential growth. Without an acceleration in private investment, job creation will remain weak. Productivity will moderate. And GDP will stay muted, unable to deliver either the fiscal receipts or the growth necessary to cover public spending commitments or generate better opportunities for current and future generations.

The Fed stopped active QE last year, but the European Central Bank and Bank of Japan have continued with regular liquidity injections in their bids to support domestic demand. This highlights policymakers’ ongoing uncertainty. The G-7 still has problems reducing high levels of debt, not to mention meeting growing fiscal obligations in a low growth/low inflation environment. Without structural reforms, growth rates cannot be lifted. Creeping demographic challenges in Japan and Western Europe mean that as the post-war baby-boom generation retires, a smaller working population will have to support them.

A portion of text from Consensus Forecasts October 12, 2015.