Economic forecasts: Berenberg Chief Economist Schmieding wins Forecaster of the Year, again
- FTD has named Dr Holger Schmieding as its “Forecaster of the Year”
- Schmieding is “cautiously optimistic” about 2012
Hamburg. Forecasting economic trends for 2011 was probably one of the more difficult tasks facing Germany’s economists. According to Financial Times Deutschland, no one did it better than Dr Holger Schmieding, Chief Economist of Berenberg Bank.
The outgoing year kicked off with continuing growth and rocketing forecasts. Then the euro crisis hit in the summer, causing economic indicators to deteriorate sharply. Now, there is talk of recession. One person had predicted as early as February that, while overall economic growth was at that point approaching 3%, an escalation of the euro crisis looked increasingly likely. In August, he was one of the first to warn of recession in the winter ahead. That economist was Holger Schmieding, Chief Economist of Berenberg Bank. He was also right in his assessment of the outlook for consumption and investment. Financial Times Deutschland started ranking the best forecasters in 2002. Since then, Holger Schmieding has ranked in the top four on four occasions. In 2007, he came in first and, in 2010, he came third in Financial Times Deutschland’s overall ranking of economists. This year, he shares first place with Uwe Angenendt.
What will 2012 bring?
“Never has the outlook for the year ahead been as uncertain as it is today,” says Schmieding.
Base-case scenario, probability: 55%
“If Europe succeeds in containing the euro crisis by Easter, the economic boom Germany had enjoyed until July 2011 will resume. The eurozone will then be able to follow the German example, although with less momentum as many governments need to tighten fiscal policy. If Europe succeeds in rebuilding investors’ shattered confidence by acting decisively, sentiment on financial markets could brighten considerably. Equity and bond markets would then be able to return towards the valuations seen in mid-2011. The prices of cyclical commodities could also rise, while the Swiss franc and the yen would likely end their crisis-induced flights of fancy.”
Negative scenario, probability: 10%
“The worst-case scenario involves a break-up of the euro. If that happened, we could be in for the most severe crisis since the Great Depression of the early 1930s.”
“We draw confidence from the widespread awareness that the consequences of a euro break-up would be dramatic. We believe that our decision-makers will ultimately do all that is necessary to avoid these risks materialising. Despite all the dangers, we therefore look towards the new year with cautious optimism,” Schmieding concludes.
Berenberg economic forecasts for the end of 2012:
|GDP growth (%)||0.1||-0.7||1.3|
You can find a PDF copy of this press release here.
Director Corporate CommunicationKarsten Wehmeier
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