Forex Flash: 2014 eyed as bounce back year in terms of global growth – NAB

Financial markets have lifted as confidence in the global growth outlook has firmed, however late 2012 data for world exports and industrial output remained soft, showing modest expansion in activity at best. GDP fell at the end of last year in Western Europe and Japan, was flat in the USA, while the pace of growth in some of the biggest emerging market economies was sluggish by their standards.

According to the NAB Research Team, “Business surveys suggest that conditions are expected to improve in several of the most important advanced and emerging economies (notably the US, Germany, Brazil and India). We expect growth to increase modestly this year, held back by ongoing weakness in the Euro-zone, followed by a more sizeable acceleration in 2014.”

While there are some signs of improvement in the Australian economy, including from the latest national accounts, the outlook is still subdued. “A high AUD, declining terms of trade and a large structural adjustment task remain headwinds. The latest NAB survey points to continuing weakness in conditions, confidence and forward orders.” they add.