SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries, has released its latest SWIFT Index data. During Q1 2013, the SWIFT Index captured payments growth level in the UK economy equivalent to a year-on-year GDP growth rate of 1.3%. By the end of June, the SWIFT Index forecasts the UK economy will continue its recovery, with a year-on-year GDP growth of 1.6% expected.

Using global financial payments volumes based on an average of 2 million SWIFT payments messages per day, the SWIFT Index has successfully predicted OECD GDP growth with limited deviation since its launch in March 2012.

The following graph shows a year-on-year GDP estimate by SWIFT based on the SWIFT Index, which captures global payments traffic. It clearly indicates a recovery for the four aggregates (OECD, UK, EU27, DE) and a slightly moderating growth for the US.

Swift Index 22-04-2013

Swift Index – click to enlarge

For EU27, the SWIFT Index continues to point to the end of recession, from -0.6% in Q4 2012 to 0.4% in Q1 2013. Continuing the gradual recovery, the SWIFT Index forecasts that the EU27 bloc will experience GDP growth of 0.6% by Q2 2013.

For Germany, GDP growth is improving from 0.4% during Q4 2012 to 0.8% at the end of Q1. This trend is set to continue with the SWIFT Index forecasting that the German economy will reach 0.9% growth by Q2 2013.

Despite that the US economy should grow at a slightly lower rate in Q2 as the SWIFT Index forecasts a US GDP growth rate of 1.3%, they are still a positive contributor to the OECD/Global moderate recovery.

SWIFT payments volumes predict that collectively, that OECD growth will remain flat in Q2 from 1.1% year-on-year GDP growth in Q1 2013. The recovery from the decreasing trend that started during the second half of 2010 will be gradual and probably gain momentum during the second half of 2013.

Utilising our own algorithm based on OECD data and SWIFT payments volumes, the SWIFT Index forecasts adjust accordingly on a monthly basis”, commented Andre Boico, Head of Pricing & Analytics, SWIFT. “Varying marginally from the February Index, the March Index indicates that the US economy will grow at a slower rate than previously forecast due to weaker than expected March payments volumes. However, the OECD countries and the UK economy in particular, will continue to experience strong GDP growth in 2013.”

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