The following represents a general Table of Contents outline for the Country Economic Forecast. The actual report may cover any or all of the topics listed below. Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following:
Domestic demand Private consumption Fixed investment Stockbuilding (% of GDP) Government consumption Exports of goods and services Imports of goods and services Unemployment Consumer prices Current account balance (US$ and % of GDP) Government budget (% of GDP) Short-term interest rates (%) Long-term interest rates (%) Exchange rate (vs. US dollar) Exchange rate (vs. euro) Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts Charts and Tables - covering a full range of economic developments relevant to the time period covered.
These could include such topics as:
Contributions to GDP growth Monthly industrial output Business and consumer confidence Unemployment rate Retail sales Prices and earnings Consumption and investment Government balance and debt GDP and industrial production Monetary policy and bond yields Background Information on the country One or two pages of text covering the main historical political and economic factors that determine the country's current position Key Facts on the country Map of the country Key political facts Long-term economic and social development - changes since 1980 Structure of GDP by output - latest year Long-term sovereign credit ratings and outlook Corruption perceptions index- latest year Structural economic indicators - changes since 1990 Destination of goods' exports -prior years - latest year Composition of goods & services exports - latest year
Trade flows in January-February (taken together to allow for the changed timing of the Chinese Lunar New Year) were weak, with export values up only 0.5% on the year. So after a strong quarterly performance in Q4, trade volumes are likely to have slipped back in Q1 this year, reflecting the failure of the Mainland recovery to gain much momentum yet. Nevertheless, growth in Mainland China is still expected to firm this year and this will ensure a general trend of accelerating trade flows for Hong Kong during 2013. In line with the disappointing trade numbers, February's PMI reading fell to a four-month low of 51.2 from 51.5 in January, mirroring the dip in China's PMI in the same month. But we expect activity to bounce back in the next few months; indeed, China's flash manufacturing PMI rebounded in March. Inflation spiked up to 4.4% in February, largely due to the timing of the Lunar New Year: average inflation in January-February was 3.7%, about the same as in 2012Q4. Nevertheless, there are still genuine upside risks to inflation from a tight labour market and rising housing costs. House prices soared by 25% in 2012 and still seem to be on a firmly upward trend. This should trigger a supply response this year, with the government liberalising land supply in response to political discontent. Moreover, the positive wealth effects from housing will help to underpin consumption.