Economic Outlook April 2008 Economic Outlook April 2008 Contents Data overview Key figures............................. 6 Interest rates .................. Overview Lean years ahead Since the January issue of Economic Outlook the outlook for the global ec Overview the ECB has clearly chosen sides ­ it is currently combating inflation by leaving interest Overview Growth, % World1) BIG-32) USA Japan Euro area Germany France Italy Spain Netherlands Belgiu Overview Monetary policy rates US Japan Euro area Denmark Sweden Norway UK Switzerland Poland Czech Denmark Easy times over for the economy · Growth set to drop sharply in the period ahead. · Housing Denmark So far the housing market downturn has masked large regional differences, which are most cle Denmark Exports are also expected to be hit by the US slowdown and the weaker growth in the Euro are Finland Downturn set to last a few years · Slowdown more prolonged than earlier foreseen. · Risks m Finland prices will erode purchasing power. In 2009 employment growth will slacken, but the rise in Finland It should ease households worries that inflation will slow markedly in 2009. This is due to Norway Norway feels international downturn, but to a lesser extent · Wages and prices will rise sha Norway Housing starts have declined over the past few months. Given the drop in prices of existing h Norway Although inflation seems to end up broadly in line with our view in the January issue of Econ Sweden The Swedish economy is loosing momentum · Swedish growth below the potential level. · Inflat Sweden ened households confidence in their own financial situation. However, on the positive side, h Sweden Riksbank to cut rates in the autumn At the end of 2007 CPI inflation was at a 15-year high. T USA Recession ­ how deep and how long? · The recession is probably a reality. · The recession will USA Given the losses on mortgage loans and tighter liquidity the Feds aggressive rate cuts have so f USA However, in step with further increases in unemployment and continued tight credit standards we Euro area Economy on the brink of a downswing · Phase of subdued growth will drag on. · Inflation t Euro area will cut their savings at a time when consumer confidence is weak. This makes private cons Euro area Our inflation forecast is based on the view that the rise in oil and food prices will halt Japan Export reliance makes Japan vulnerable · Exports to weaken in step with global downturn. · Ho Japan planned VAT hike in 2009. The BoJ to leave interest rates unchanged After having been negative China Olympic gold in growth ­ but slowdown just around the corner · Inflation sets 12-year record. China serves by far. A major chunk has so far been invested in USD-denominated bonds, but since the Oil market Still trending upwards, but the US is the wild card The oil price is still trending upwa Commodities Clouds gathering on the horizon Prices of industrial metals continued seesawing at a pe For your notes 32 April 2008 Economic Outlook For your notes 33 April 2008 Economic Outlook For your notes 34 April 2008 Economic Outlook Economic Research Nordea: Denmark: Helge J. Pedersen, Global chief economist helge.pedersen@nordea.c Nordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank AB (publ