10
Figure 10. Forecast Overview, 2007-09F
GDP Growth CPI Inflation
Current Balance of GDP Fiscal Balance of GDP
2007 2008F
2009F 2007
2008F 2009F
2007 2008F
2009F 2007
2008F 2009F
Global 3.9
3.2 3.3
3.0 3.7
2.8 0.2
0.1 0.1
-0.6 -1.3
-1.4
Based on PPP weights 4.8 4.1 4.2 3.6 4.2 3.3 1.0 0.7 0.4 -0.7 -1.4 -1.5
Industrial Countries 2.5
1.7 2.0
2.1 2.6
1.8 -1.5
-1.2 -0.7
-1.0 -1.9
-1.9
United States 2.2 1.6 2.1 2.9 3.6 2.0 -5.4 -4.9 -4.1 -1.1 -3.0 -3.0
Japan 2.1 1.9 1.7 0.0 0.7 0.3 4.8 4.8 5.2 -2.8 -3.0 -3.1
Euro Area 2.6 1.7 1.8 2.1 2.3 1.8 0.2 0.2 0.3 -1.0 -1.3 -1.2
Canada 2.5 1.0 1.5 2.1 1.4 2.0 0.9 -0.2 -0.8 0.2 0.1 0.1
Australia 3.8 2.7 3.4 2.3 3.3 2.8 -5.9 -5.2 -5.2 1.6 1.3 1.5
Germany 2.6 1.6 1.9 2.1 1.8 1.6 6.6 6.8 6.8 0.0 -0.5 -0.7
France 1.9 1.6 1.6 1.5 2.2 1.4 -1.5 -1.7 -1.6 -2.6 -2.9 -2.8
Italy 1.6 0.8 1.4 2.2 2.5 1.8 -2.0 -1.5 -1.5 -2.3 -2.7 -2.9
Spain 3.8 2.1 2.2 2.7 3.4 2.3 -9.6 -8.9 -7.5 2.2 1.2 0.0
United Kingdom 3.1 1.7 1.9 2.3 2.5 2.0 -5.2 -4.5 -3.3 -3.0 -3.3 -3.5
Emerging Markets 7.2
6.5 6.4
5.2 6.1
5.4 4.6
3.5 2.3
0.4 -0.1
-0.4
China 11.4
10.5 10.0
4.8 5.0
4.0 10.8
8.8 7.0
-1.8 -2.0
-1.5 India
8.7 8.3
8.5 4.5
4.3 4.0
-1.2 -1.9
-1.8 -6.0
-5.8 -5.2
Korea 4.9
4.6 4.8
2.5 3.3
2.5 0.6
-1.3 -0.6
2.0 2.0
1.5 Poland
6.5 5.0
4.7 2.5
4.2 3.0
-3.7 -4.7
-4.6 -1.5
-2.1 -2.5
Russia 8.1
6.6 6.5
9.0 12.9
8.9 5.9
6.2 3.3
5.4 5.6
5.0 South Africa
5.1 3.5
4.3 7.1
6.1 5.4
-7.1 -7.7
-7.7 0.8
0.3 0.2
Turkey 3.8
4.2 5.2
8.8 7.8
6.5 -7.7
-8.3 -6.8
-2.2 -2.4
-3.2 Brazil
5.3 4.4
4.0 3.6
4.7 4.5
0.3 -0.6
-1.0 -1.4
-0.7 -0.4
Mexico 3.3
2.9 3.7
4.0 3.9
3.5 -0.9
-1.8 -2.3
0.0 0.0
0.0
Note: Aggregation based on nominal GDP except where noted. F Citi forecast. For India, inflation forecast is for WPI. Source: Citi.
11
Key Economic Indicators
Figure 11. Euro Area, Japan, and the United States — Business Activity Survey Measures, 1987-Feb 2008
-5.0 -4.0
-3.0 -2.0
-1.0 0.0
1.0 2.0
3.0
87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 -5.0
-4.0 -3.0
-2.0 -1.0
0.0 1.0
2.0 3.0
U .S. ISM Euro Area
Japan Tankan
S tandar
d D e
v iati
ons fr
om Mean d
S tandar
d D
e v
iati ons
fr om Mean
Note: The figure shows business activity survey indexes in the euro area, Japan and the United States, measured in units of standard deviations from the ten-year mean. Sources: Bank of Japan, EU Commission and the U.S. Institute for Supply Management.
Figure 12. Commodity Prices, 1987-Feb 2008
80 100
120 140
160 180
200 220
240
87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 10
20 30
40 50
60 70
80 90
100 per Barrel
Economist Index Left Oil Prices Right
Note: Brent crude. Sources: The Economist and OECD.
Figure 13. Selected Countries — Global Industrial Production Year-to-Year Percent Change, 2007-09F
2007 2008F 20009F
World 4.2 3.5
3.9 United
States 2.1 1.7 2.5
Japan 2.9 2.3 2.5
Euro Area
2.5 1.9 1.6 United
Kingdom 0.3 0.8 0.8
Canada -0.1 -3.0
1.0 China
18.5 16.8 16.5 India 9.0
8.5 10.0
Korea 8.2 7.7 8.0
Brazil 3.0 4.8 4.2
Note: “World” includes 22 countries based on industrial production weights. Sources: National sources and Citi.
Figure 14. Euro Area, Japan, United Kingdom, and United States — Forecasts for 2008 GDP Left and 2008 Inflation Right, 2006-Feb 2008.
0.5 1.0
1.5 2.0
2.5 3.0
3.5 4.0
Jan-06 Apr
Jul Oct
Jan-07 Apr
Jul Oct
Jan-08
0.5 1.0
1.5 2.0
2.5 3.0
3.5 4.0
U.S. Euro
U.K. Japan
4.0 4.0
-0.5 0.0
0.5 1.0
1.5 2.0
2.5 3.0
3.5 4.0
Jan-06 Apr
Jul Oct
Jan-07 Apr
Jul Oct
Jan-08 4.0
-0.5 0.0
0.5 1.0
1.5 2.0
2.5 3.0
3.5 4.0
4.0
U.S. Euro
U.K. Japan
Source: Citi.
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Figure 15. Short Rates End of Period, as of Feb 28, 2008
Current 1Q 08
2Q 08 3Q 08
4Q 08 1Q 09
United States 3.00
2.50 2.00
2.00 2.00
2.00 Japan
0.50 0.50
0.50 0.50
0.75 0.75
Euro Area 4.00
4.00 3.75
3.50 3.50
3.50
Canada 4.00
3.50 3.00
3.00 3.00
3.00
Australia 7.00
7.25 7.50
7.50 7.50
7.50 New Zealand
8.25 8.25
8.25 8.25
8.25 8.25
Denmark 4.25
4.25 4.00
3.75 3.75
3.75
Norway 5.25
5.25 5.50
5.50 5.75
5.75 Sweden
4.25 4.25
4.25 4.25
4.00 3.75
Switzerland 2.75
2.75 2.75
2.75 2.75
2.75 United Kingdom
5.25 5.25
4.75 4.50
4.25 4.25
China 7.47
7.74 7.74
7.74 7.74
7.74
Source: Citi.
Figure 16. 10-Year Yield Forecasts Period Average, as of Feb 28, 2008
Current 1Q 08
2Q 08 3Q 08
4Q 08 1Q 09
United States
3.71 3.65
3.60 3.75
3.85 4.00
Japan
1.43 1.50
