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SocGen: Here's What The World Will Look Like In 2013 And Beyond

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As we prepare for the holidays, Societe Generale's Michala Marcussen and her team are out with their latest update on the global economy.

Policy uncertainty was a big factor in dragging down growth this year.

This is expected to ease in early 2013 in the U.S. and at a more gradual pace in Europe. But austerity will still weigh on Europe.

Further east, China will see a cyclical bounce, though structurally, growth is slowing.

We drew on the report to highlight growth rate for each country from 2013 through 2017. We also highlighted the biggest growth drivers and risks to each economy.

Australia's economy faces risks from a decline in commodity prices and a slowdown in the global economy

Real GDP growth

2013: 2.7 percent
2014: 3.1 percent
2015: 3.1 percent
2016: 3.0 percent
2017: 2.9 percent

2013 inflation

3.0 percent

Forecast highlights

The resource investment boom is likely to peak in 2013, buy exports are expected to recover and housing investment is expected to stop declining.

The biggest risks to the Australian economy are the euro crisis, the U.S. fiscal cliff and a hard landing in China. A decline in commodity prices would hurt consumption and investment.

Source: Societe Generale



China still faces a bumpy landing in 2013 as policymakers take a more cautious approach to easing

Real GDP growth

2013: 7.4 percent
2014: 7.2 percent
2015: 6.9 percent
2016: 6.9 percent
2017: 6.5 percent

2013 inflation

3.0 percent

Forecast highlights

 As the global economy is unstable hopes of external demand supporting Chinese economic growth are fading. Policymakers have taken a cautious approach toward easing which shows they are serious about change. 

There's a 30 percent chance of a hard landing and a 10 percent chance of over stimulation. A bumpy landing is most likely.

"We think Beijing is well aware that the sensible goal is to achieve a relatively less painful deceleration, rather than a re-acceleration of the kind seen in 2009/10."

Source: Societe Generale



Japan's economy will be impacted by its dispute with China in the near term

Real GDP growth

2013: 0.7 percent
2014: 1.4 percent
2015: 0.7 percent
2016: 0.9 percent
2017: 1.3 percent

2013 inflation

0.1 percent

Forecast highlights

Weak exports, production, and retail sales all led to a contraction in the third quarter. The economy should improve next year as the global economy improves.

In the near term political tensions with China will impact GDP. In the long run Japan needs to improve its debt situation.

Source: Societe Generale



See the rest of the story at Business Insider

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