Our global economic growth forecast for 2013 is unchanged at a below average rate of 2.9%. By contrast, we have lifted slightly our global growth forecast for 2014 from 3.6% to 3.7% because of upgrades to our Eurozone, UK and New Zealand GDP forecasts.
The Eurozone has finally exited its long but shallow recession. The stronger than expected Eurozone Q2 GDP and an improvement in the high frequency business surveys have encouraged us to lift our Eurozone GDP forecasts. We now forecast Eurozone GDP growth of -0.4% in 2013 (previously -0.7%) and 1.2% in 2014 (previously 0.9%).
The improvement in the Eurozone outlook is a positive for the UK economy. Almost 8% of UK GDP is exported to Eurozone domestic demand. By comparison, about 4% of Australian GDP is exported to Chinese domestic demand. Our upgrade to the UK growth outlook also reflects improved credit availability and a more buoyant UK housing market. Our UK growth forecast for 2013 is 1.2% (previously 0.9%) and 1.9% in 2014 (previously 1.3%).
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