Thursday, May 19, 2022

SWIFT Index forecasts EU27 is moving out of recession

SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries, has released its latest SWIFT Index data.

Using global financial payments volumes, the SWIFT Index forecasts the EU27 bloc is moving out of recession into a positive GDP growth rate, from -0.6 percent in Q4 2012 to 0.4 0.6 percent in Q1 2013 and 0.6 percent in Q2 2013.
The EU27 recovery will be very gradual and could take all of 2013 to gain momentum. Since its launch in March 2012, the Index, based on an average of 2 million SWIFT payments messages per day, has successfully predicted OECD GDP growth with limited deviation.

The following graph shows a year-on-year GDP estimate by SWIFT based on the SWIFT Index, which captures global payments traffic. It clearly indicates a recovery for the four aggregates (OECD, UK, EU27, DE) and a nearly flat evolution for the US.

For Germany, the GDP growth rate should improve slightly moving from 0.4 0.6 percent during Q4 2012 into a more positive value of 0.8 0.6 percent Q1 and 1.0 0.6 percent Q2 2013.

After the very marginal growth of 0.3 0.6 percent in Q4 2012, the SWIFT Index predicts that the UK economy will gain momentum and reach GDP growth of 1.3 0.6 percent during Q1 2013. With further growth expected during Q2 2013, it is expected that the UK economy will reach the 2010 post crisis recovery levels around 1.6 0.6 percent GDP growth by July 2013.

The US GDP growth rate will maintain its current level (1.6 0.6 percent) from Q4 2012 during Q1 2013 (1.7 0.6 percent) and Q2 2013 (1.6 0.6 percent).

SWIFT payments volumes predict a year-on-year OECD growth rate of 0.9 percent for Q1 2013, up from 0.7 percent Q4 2012. The Index predicts that collectively, the OECD member countries will start to recover from the decreasing trend that started during the second half of 2010.

“A mixture of the world’s most advanced and emerging countries, the OECD group provides a strong indication of the direction the global economy is moving in” commented Andre Boico, Head of Pricing & Analytics, SWIFT. “With strong GDP growth expected over the next two quarters, 2013 could prove to be the recovery year for the global economy in recent times, should the observed trend continue.”

Boico added: “The double dip recession worries seem to be behind for most of the major economies.”
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 banking organisations, securities institutions and corporate customers in 212 countries and territories.

SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

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