SWIFT Index anticipates a strong start to 2014 for the UK and US economies
Brussels, 20 November 2013 – SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries and territories, today forecasts continued momentum in the growth of the UK and US economies.
Based on an average of 2 million SWIFT payments messages per day, the SWIFT Index produces quarterly GDP growth nowcasts and forecasts for the UK, EU27, Germany, US and OECD economies and is available on a monthly basis for download at e-paying.info.
One year on from its inception, the SWIFT Index continues to forecast improvement in the UK economy, with an anticipated year-on-year GDP growth rate of 2.6% by Q1 2014.
Despite a shaky October with the US economy at risk of a default, the SWIFT Index predicts further economic expansion for the US in the new year with a 2.2% year-on-year GDP growth rate expected by Q1 2014.
The following graph shows year-on-year GDP growth based on the SWIFT Index, clearly indicating improving growth for the UK, EU27 Germany, US and OECD aggregates.
The SWIFT Index continues to be optimistic for EU27 growth, forecasting a steady climb out of recession in Q1 2014 with a year-on-year GDP growth rate of 0.9% anticipated - higher than current expectations for Q4 2013.
Similarly, the German economy should continue its steady recovery from 0.6% in Q3 2013 to 1.6% year-on-year growth by Q1 2014.
Underpinning the combined regional growth, the OECD region continues to grow at a strong year-on-year GDP growth rate, reaching 1.5% by Q1 2014.
“Since launching the SWIFT Index in October 2012, we have seen a great deal of success, particularly in forecasts for UK and US economic recovery, post financial crisis. This proves to us that our methodology, which uses an algorithm based on SWIFT payments volumes and OECD data, is accurate and is an early barometer for GDP growth”, said Andre Boico, Head of Pricing & Analytics, SWIFT. “As we move into the New Year, the future is bright for the UK and US economies, with the global economy not far behind.”
Notes to the editor:
Below, you can find a summary table of the GDP estimates derived from the SWIFT Index and the forecast trend compared to the last actual figure (Q3-2013).
Dictionary of terms:
(1) Published by OECD & downloaded on 12 November 2013. When no actual is available, SWIFT will use its previous nowcasted GDP growth rate.
(2) Direction: sign of the GDP forecast figure. Positive growth rate (>0%) is equivalent to ‘Growing’. Negative growth rate (<0%) is equivalent to ‘Contracting’. Flat is used when GDP shows no change at 0%.
(3) Rate of change: we compare the GDP growth rate forecast to the last known actual. If the forecasted GDP growth rate is higher than the last actual, then the “rate of change” can be ‘Faster’,’ Slightly Faster’ or ‘From Contracting’ (if there is a change in sign from negative growth to positive growth). If the forecasted GDP growth rate is lower than the last actual, then the “rate of change” can be ‘Slower’, ’Slightly Slower’ or ‘From Growing’ (if there is a change in sign from positive growth to negative growth).
About SWIFT Index
Part of the Business Intelligence (BI) portfolio, the SWIFT Index provides quantitative fact-based Business Intelligence aggregated from SWIFT data on payments traffic and can be used to derive an early forecast of GDP growth on a monthly basis. The SWIFT Index utilises Year-on-Year data to calculate GDP growth to deseasonalise annual variations in volumes and highlight economic trends of relevance.
As announced in October 2012, SWIFT can now offer an Index for UK, Germany, US and EU27 in addition to the World Index and OECD Index. These four new additional indices will support business decision-making in these major economies and will act as leading indicators of national and regional GDP growth. SWIFT is able to forecast GDP growth through a methodology that has been validated by academic experts from the Centre for Operations Research and Econometrics (CORE – Université Catholique de Louvain, Belgium).
The SWIFT Business Intelligence portfolio offers clients a suite of intuitive tools including analytics, insights and economic indicators, designed to grow with customers’ business needs.
For further information about the SWIFT Index and its methodology, please visit e-paying.info/swiftindex
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 banking organisations, securities institutions and corporate customers in 212 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.
For more information, please visit e-paying.info or follow us on Twitter: @swiftcommunity and LinkedIn: SWIFT.
Tel: +32 2 655 3377