SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries, has released its latest SWIFT Index data. Using global financial payments volumes, the SWIFT Index forecasts the EU27 bloc is moving out of recession into a positive GDP growth rate, from -0.6% in Q4 2012 to 0.4% in Q1 2013 and 0.6% in Q2 2013. The EU27 recovery will be very gradual and could take all of 2013 to gain momentum. Since its launch in March 2012, the Index, based on an average of 2 million SWIFT payments messages per day, has successfully predicted OECD GDP growth with limited deviation.

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, and DE) and a nearly flat evolution for the US.

Swift Index - March 2013

Swift Index – March 2013 (Click to enlarge)

For Germany, the GDP growth rate should improve slightly moving from 0.4% during Q4 2012 into a more positive value of 0.8% Q1 and 1.0% Q2 2013.

After the very marginal growth of 0.3% in Q4 2012, the SWIFT Index predicts that the UK economy will gain momentum and reach GDP growth of 1.3% during Q1 2013. With further growth expected during Q2 2013, it is expected that the UK economy will reach the 2010 post crisis recovery levels around 1.6% GDP growth by July 2013.

The US GDP growth rate will maintain its current level (1.6%) from Q4 2012 during Q1 2013 (1.7%) and Q2 2013 (1.6%).

SWIFT payments volumes predict a year-on-year OECD growth rate of 0.9% for Q1 2013, up from 0.7% Q4 2012. The Index predicts that collectively, the OECD member countries will start to recover from the decreasing trend that started during the second half of 2010.

A mixture of the World’s most advanced and emerging countries, the OECD group provides a strong indication of the direction the global economy is moving in” commented Andre Boico the Head of Pricing & Analytics for SWIFT. “With strong GDP growth expected over the next two quarters, 2013 could prove to be the recovery year for the global economy in recent times, should the observed trend continue.”

Boico added, “The double dip recession worries seem to be behind for most of the major economies”.

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