The Reserve Bank of Australia released a statement before the House of Representatives Standing Committee on Economics. The outlook for the Australian economy has improved since the last meeting. It is estimated that GDP increased by around 5 per cent over 2021 and there is an expected GDP growth of around 4¼ per cent over 2022 and 2 per cent over 2023.
The forward-looking indicators suggest further growth in jobs over the months ahead with vacancies at a very high level. The central forecast is for the unemployment rate to decline to below 4 per cent later this year and remain below 4 per cent next year. If this comes to pass, it would be a significant milestone. Australia has not experienced unemployment rates this low since the early 1970s, almost half a century ago.
The Reserve Bank of New Zealand released the quarterly Inflation Expectations survey. The February 2022 Survey of Expectations (SOE) found that business’ OCR expectations continued to rise in the short, medium and long term. The OCR was last raised by 25 basis points to 0.75 on the 24th of November 2021.
The mean OCR expectation for the end of the current quarter was 1.05 showing that most respondents expected to see a single rate hike from the current level of 0.75.
The December 2021 annual CPI inflation was measured at 5.9%, the largest year on year increase in the CPI since 1990. Inflation expectations for all time periods increased from last quarter but all still sit beneath the current official value.
Mean unemployment expectations reached all-time lows, even though unemployment is forecasted to increase from its current level. One year ahead mean unemployment was 3.5%.
Though this is an all time low for this series which goes back to 1987, it still represents a 0.3% rise from the current official Stats NZ figure of 3.2%. Two year ahead mean unemployment expectations
sat higher at 3.87% which is also the lowest figure since the question was added to the survey in November 1993.
UK’s first GDP quarterly estimated released for months between October and December 2021. UK gross domestic product (GDP) is estimated to have increased by 1.0% in Quarter 4 (Oct to Dec) 2021, following a downwardly revised 1.0% increase in Quarter 3 (July to Sept).
In output terms, the largest contributors to this quarterly increase were from human health and social work activities driven by increased GP visits at the start of the quarter, and a large increase in virus testing and tracing activities and the extension of the vaccination programme.
In Quarter 4 2021, excluding non-monetary gold in net trade, household consumption made the largest positive contribution to growth.
The level of quarterly GDP in Quarter 4 2021 is now 0.4% below its pre-pandemic level (Quarter 4 2019).
Monthly estimates published today show that GDP fell by 0.2% in December 2021 but is at its pre-virus level (February 2020).
GDP increased by an estimated 7.5% in 2021, following a 9.4% fall in 2020.
In its’ latest Economic Bulletin the ECB has outlined some key macroeconomic data.
The euro area economy continues to recover. Growth is moderating, but activity is expected to pick up again strongly in the course of this year. The savings built up during the pandemic will also support consumption. Economic activity moderated over the final quarter of last year and this slower growth is likely to extend into the early part of this year. We now expect output to exceed its pre-pandemic level in the first quarter of 2022.
Having peaked at 7.2% of GDP in 2020, the deficit ratio is estimated to have fallen to 5.9% in 2021 and is projected to fall further to 3.2% in 2022 and to stabilize just below 2% by the end of the forecast horizon in 2024.
Growth is expected to rebound strongly over the course of 2022. The December Eurosystem staff macroeconomic projections foresee annual real GDP growth at 5.1% in 2021, 4.2% in 2022, 2.9% in 2023 and 1.6% in 2024. Compared with the September staff projections, the outlook has been revised down for 2022 and up for 2023.
Inflation increased further to 4.9% in November. It will remain above 2% for most of 2022. Inflation is expected to remain elevated in the near term, but to decline in the course of this year.
