The IMF forecast a 2020 global contraction of 4.4% in its latest World Economic Outlook, an improvement over a 5.2% contraction predicted in … If the relative RMSE and/or the relative MAE figures are lower than 1, this speaks in favour of the relative forecasting quality of EZEO versus the alternative model. The accuracy of the forecasts diminishes as the forecast horizon lengthens and error variance rises. ISTANBUL. Eurozone Economic Outlook: Eurozone GDP starts to recover (September 2020) In the second quarter, global economic activity declined sharply due to COVID-19 pandemic containment measures. The Ifo Institute evaluates its economic forecasts for Germany on an ongoing basis (cf. International merchandise trade decreased in volume by historic 12.5%, despite a rebound in June (+7.6%). April 30, 2020 The eurozone economy will sink deeper into recession than previously thought due to the effects of the pandemic, the European Commission (EC) has said. The economy logged the strongest quarterly GDP expansion on record in Q3, as the easing of containment measures allowed households and businesses to resume activity. The eurozone economy will suffer a historic crash in 2020, but not as badly as first expected, International Monetary Fund (IMF) data showed … For example, Germany’s car exports to the United Kingdom have fallen by 23 percent since the referendum in 2016, mainly caused by Brexit-related uncertainties and the appreciation of the euro versus the pound.1 The sectoral trend of value-added growth highlights the rela… Facts — 03.07.2020 The GDP value of Euro Area represents 11.06 percent of the world economy. Diebold and Mariano 1995) to test the difference in the forecasting errors generated by various models. The greatest negative contribution came from private consumption. With the same information status, EZEO forecasts show in relative terms smaller deviations from the actual realisations. The comparison with naive models shows that the latter produce far greater errors. This difference is more pronounced as far as the inflation forecasts are concerned. The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Citation. The economy logged the strongest quarterly GDP expansion on record in Q3, as the easing of containment measures allowed households and businesses to resume activity. International merchandise trade decreased in volume by historic 12.5%, despite a rebound in June (+7.6%). The quality of the forecast is assessed using the forecasting error figure, which corresponds to the difference between the figure first released for the variable in question and the forecast figure. Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. Since forecasts by EZEO and Consensus are not released at exactly the same time, a one-sided information advantage must be assumed. The forecasts by Consensus Economics are used as a comparison benchmark of EZEO’s forecasting accuracy in relative terms. Eurozone: Coronavirus crisis strikes unprecedented blow to Eurozone economy in Q1. A modest recovery is forecast for 2020, with growth reaching 1.8 percent, as global trade is expected to pick up and some economies recover from past stresses. It is worth noting that a period of around three to four weeks lies between the drafting of the EZEO forecast and that of Consensus. As Evgeny Redzyuk, an expert of the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, writes in his text for ZN.UA, in comparison with the economic forecast for summer 2020, the expectations for recovery of […] April 30, 2020. Mariano, "Comparing Predictive Accuracy", Journal of Business and Economic Statistics 13, 1995, 253–263. The number of GDP forecasts is 33, while the number of inflation forecasts is 22. GDP Growth Rate in the Euro Area averaged 0.34 percent from 1995 until 2020, reaching an all time high of 12.60 percent in the third quarter of 2020 and a record low of -11.80 percent in the second quarter of 2020. Wollmershäuser 2015), the article ends with a comparison of forecast average annual rates of change by EZEO and Consensus Economics, and the latter is granted an information advantage. The Figure shows that EZEO’s forecasts beat those of Consensus: forecasts by the three institutes for GDP and inflation show smaller average deviations. The sudden halt to economic activity through quarantines, event cancellations, and social distancing will result in a shock to demand. Diebold, F.X. Eurozone: Coronavirus crisis strikes unprecedented blow to Eurozone economy in Q1. Under these assumptions, real GDP in the euro area is projected to fall by 8.7% in 2020 and to rebound by 5.2% in 2021 and by 3.3% in 2022. 3) for both error measures. Overall, the euro area economy is forecast to contract by about 8 ¾% in 2020 before recovering at an annual growth rate of 6% next year. EZEO’s forecasting accuracy for GDP only falls for the longest forecasting horizon (according to MAE) compared to Consensus Economics. This implies that by the end of the projection horizon, the level of real GDP would be around 4% below its level expected in the March 2020 staff projections. This, in turn, means that no systematic overestimates or underestimates exist. In Germany and France, the EU’s … and C.W.J. Real GDP is projected to fall by 8.0% in 2020 and to rebound by 5.0% in 2021 and by 3.2% in 2022. 1891 0 obj <>stream Observation points above the diagonal belong to the overly pessimistic forecasts, while points below it show an overestimation. Read more. Eurozone Outlook 2020 Replay In the eurozone, Goldman Sachs Research expects a gradual pickup in growth from its current pace of 0.2% to 1.1% for 2020, driven by a friendlier global economic environment, resilient domestic demand, and progress on Brexit. Eurozone GDP expanded by 12.7% qoq after a 11.8% decline in 2Q20. The coronavirus (COVID-19) pandemic has dramatically affected global economic activity since taking hold in early 2020 and the euro area economy is no exception. Eurozone Economic Outlook22.12.2020 10:00. Eurozone: Coronavirus crisis strikes unprecedented blow to Eurozone economy in Q1. These were by far the sharpest increases observed since time series started in 1995, and a rebound compared to the second quarter of 2020, when GDP had … Since the forecast results depend on the information available at the time of their drafting (cf. Forecasting errors increase with longer forecasting windows in this case too. Another disappointing blow for the Euro which sees other currencies like the GBP edge over it. Unless pandemic dynamics change significantly in the coming months, growth in 2021Q1 is set to be weaker than forecast in the October 2020 World Economic Outlook," the … April 30, 2020 Italy’s economy was on course to slump by 9.1 per cent in 2020, followed by an expansion of just below 5 per cent the following year. experienced negative growth rates in Germany, the Netherlands, and Turkey during 2019. endstream endobj 1893 0 obj <>stream Eurozone: ECB cuts rates on long-term liquidity operations and introduces new anti-pandemic auctions. Eurozone: ECB cuts rates on long-term liquidity operations and introduces new anti-pandemic auctions. ����R�>����Ğ����8���Ģ��vO��K���":@�A!E���ȳ�X��/I��d*\"�H���� (�� t�oc�FϢ��a��K��/�)��3bA�Z0����z����>�7_�WW�=E�5. EU lowers eurozone 2020 growth forecast. In the second quarter, global economic activity declined sharply due to COVID-19 pandemic containment measures. The impact of political factors has become very palpable. A comparison of independent forecasts for the UK economy in August 2020. Trend gross domestic product (GDP), including long-term baseline projections (up to 2060), in real terms. As Bates and Granger (1969) show, the average value of the expectations of a large number of experts has a very high expected forecasting performance, provided that the individual forecasting errors are independent of each other. 2014; Nierhaus 2015). The eurozone's second-largest economy is expected to contract 11% this year, the economy … Eurozone Economic Outlook: Eurozone GDP starts to recover (September 2020) In the second quarter, global economic activity declined sharply due to COVID-19 pandemic containment measures. Read more. Forecast of the gross domestic product (GDP) growth in the euro countries 2021 Monthly number of unemployed persons in the EU and Euro area June 2020 Budgetary balance in … Owing to headwinds from international trade and the ongoing uncertainty surrounding Brexit, the manufacturing sector in the Eurozone has been in recession the whole year. Granger, "The Combination of Forecasts", Operations Research Quarterly 20, 1969, 451–468. However, to exclude the possibility that any of our results are only driven by this information advantage, we now also analyse the forecasts of annual rates of change in GDP growth and inflation. The European Commission publishes its latest forecasts for the euro area economy - 5 November 2020 - Eurozone 2020 GDP forecast -7.8% (previously -8.7%) - Eurozone 2021 GDP forecast … International merchandise trade decreased in volume by historic 12.5%, despite a rebound in … It produces a joint forecast for real gross domestic product, consumption of private households, gross fixed capital formation (investment), industrial production and the inflation rate in the euro zone for the current and the two following quarters. In the second scenario the Consensus forecasts enjoyed an information advantage of three to four weeks, meaning that additional indicators would have been available when the Consensus forecasts were drafted (publication at point in time t + 1). Measures to contain and slow the spread of the respiratory disease COVID-19 have a drastic impact on the global economy. This caused GDP to fall remarkably in Q1 2020 by 3.6%. The quality of EZEO’s forecasts is clearly better than that of naïve statistical models. Following the release of Q2 GDP data which, at -12.1% q/q, -15% y/y, were the worst on record, but better than we had anticipated, we have raised our 2020 Eurozone GDP growth forecast to -7.7% from -8.2%; our 2021 forecast changes marginally to 6.1% from 6.2% (consensus: -8.1%; 5.9%). Furthermore, the Eurozone’s own GDP figure was released at 10:00 GMT which saw the YoY figure for Q4 2019 drop from 1.2% to 0.9%. April 30, 2020 That would be … GDP forecasts for the EU, eurozone and selected countries France, the eurozone’s second-largest economy, is expected to contract by 10.6 percent this year and grow by 7.6 percent in 2021. The Purchase Manager Index (PMI) for Eurozone shows a similar picture, with the index undershooting the neutral value of 50 in the first three quarters of 2019 . 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