MORGAN STANLEY
The Euro area economy is expected to contract in 2012, only to be followed by anemic growth for years to come
GDP Growth
- 2011: 1.6%
- 2012: -0.2%
- 2013: 0.9%
- 2014 – 2018: 1.4%
Personal consumption will slow with the economy
Private Consumption Growth
- 2011: 0.7%
- 2012: 0.2%
- 2013: 0.5%
Capital expenditures will dip
Gross Fixed Investment Growth
- 2011: 2.1%
- 2012: -1.5%
- 2013: 0.5%
Capital expenditures will dip
Gross Fixed Investment Growth
- 2011: 2.1%
- 2012: -1.5%
- 2013: 0.5%
Government spending will pull back thanks to austerity measures
Government Consumption Growth
- 2011: 0.5%
- 2012: -0.2%
- 2013: -0.2%
Prices are expected to decline, making room for monetary easing
Inflation
- 2011: 2.7%
- 2012: 1.5%
- 2013: 1.3%
Core-Inflation
- 2011: 1.4%
- 2012: 1.1%
- 2013: 1.2%
However, income won’t keep up with inflation
Real Disposable Income Growth
- 2011: 0.2%
- 2012: -0.1%
- 2013: 0.5%
However, income won’t keep up with inflation
Real Disposable Income Growth
- 2011: 0.2%
- 2012: -0.1%
- 2013: 0.5%
The savings rate will inch lower
Personal Saving Rate
- 2011: 12.4%
- 2012: 12.2%
- 2013: 12.1%
Meanwhile, the unemployment rate will continue to climb
Image: AP
Unemployment Rate
- 2011: 10.1%
- 2012: 11.0%
- 2013: 11.2%
Government debt will outpace GDP
General Gov’t Debt (% of GDP)
- 2011: 88.2%
- 2012: 91.0%
- 2013: 92.2%
The ECB is expected to cut rates soon, while German yields are projected to rise
ECB Policy Rate
- 2011: 1.00%
- 2012: 0.50%
- 2013: 1.25%
10-Year German Bund Yield
- 2011: 1.75%
- 2012: 2.20%
- 2013: 3.00%
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