Monday, 31 December 2012

Forecasts past and present

This time last year, I made some macroeconomic forecasts for 2012. On some, I was insufficiently pessimistic (I forecast Poland's GDP to grow by 2.0% in the year to Q3, it actually grew by a mere 1.4%), some over-pessimistic (unemployment in November was 12.9% compared to my forecast of 14.5%, while inflation at 2.8% in November was lower than the 4.0% I'd forecast). Similarly, the UK and the eurozone showed lower inflation and lower unemployment than I predicted. But I was overly pessimistic about GDP in both cases.

Note: Polish unemployment figures include a fair few who are economically active (in the grey economy) yet sign on to maintain state healthcare benefits. Eurostat's figures for Poland show unemployment running at 10.4% - which suggest that around one-fifth of Polish claimants are abusing the system.

While the zloty proved remarkably stable during the course of 2012, it ended the year stronger against both the pound (5.00 rather than 5.15 forecast) and against the zloty (4.10 rather than 4.20). I got the euro to the pound spot-on (1.22). Weather - I was right about the early snow, wrong about a white Christmas for Warsaw (just dirty left-over snow, but no fresh falls).

So then... my quick calls for 2013...

Key economic indicators: Poland

2012 (latest data) 2013 (same time this year)
GDP growth 1.4% (Q3)
0.8% (Q3)

Unemployment 12.9% (Nov)
13.8% (Nov)

Inflation 2.8% (Nov)
2.6% (Nov)

Key economic indicators: UK

2012 (latest data) 2013 (same time this year)
GDP growth 0.1% (Q3)
0.8% (Q3)

Unemployment 7.8% (Sep)
7.5% (Sep)

Inflation 2.7% (Nov)
2.5% (Nov)

Key economic indicators: Eurozone

2012 (latest data) 2013 (same time this year)
GDP growth -0.6% (Q3)
-0.1% (Q3)

Unemployment 11.7% (Oct)
11.9% (Oct)

Inflation 2.2% (Nov)
2.4% (Nov)

All in all, I do not share JP Morgan's prediction that 2013 will be 'the first post-crisis year'; I think the global economy will continue bumping along the bottom, and that Poland will have a harder time next year than either in 2012 or indeed 2014. Cheers!

I predict that the EU 2014-2020 budget will somehow be cobbled together in a messy compromise around February, and Poland will do well out of it, with €70 billion earmarked for structural and cohesion funds.

And currencies - on 31 December 2013, I predict 1 GBP will be 5.22 PLN, 1 EUR will be 4.32 PLN, and 1 GBP will be 1.25 EUR.

I will not bother predicting the weather - it's become way too unpredictable!

This time last year:
Economic predictions for 2012

This time two years ago:
Classic cars, West Ealing

This time three years ago:
Jeziorki 2009, another view

This time four years ago:
Jeziorki 2008, another view

This time five years ago:
Final thoughts for 2007


student SGH said...

Again, I don't dare to predict anything. Just would like to point at the booming stock market, which has totally parted company with the allegedly frail economy. Now we have two scenarios possible:
1) stock market mini-bubble bursts and stock prices go down by at least 15% to reflect sluggish economic growth, rising unemployment, lower consumption, etc.
2) stock market correctly anticipates a brisk economic recovery which will begin in 1H2013.

Time will tell. This week I saw last of my stocks, many bought in May, near 2012's lows. The market might still go up, but the rally doesn't seem sustainable.

sportif said...

w tabelce UK zamiast 2013 (latest data) powinno być 2012.
Co do polskiego bezrobocia to jest ono liczone po polsku, wg norm europejskich jest ono około 2% niższe

Michael Dembinski said...

@ Sportif - thanks, corrected and noted!

student SGH said...

Time to confront the forecasts with actual figures (I'll confine to Poland)

GDP growth - 1.9% in 3Q2013 (why was your prediction so downbeat?)

Unemployment: 13.2% in November 2013 (again, positive surprise)

Inflation: 0.6% y/y (how low!)

And looking back at my stock market forecast - WIG20 retreated from over 2,600 points in first days of 2013 and over the course of the year stayed below that level