Latest forecasts supported by change in UK economy confirms SWIFT payments volumes as a leading metric for GDP growth

SWIFT, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries, has released its latest SWIFT Index data based on an average of 2 million SWIFT payments messages per day.

The SWIFT Index forecasts that there will be stronger GDP growth in the UK over Q3, with a year-on-year GDP growth rate of 1.4%. The noticeable change in the UK is confirmed by other indicators including PMI data.

The US economy will show little improvement during Q3 as the SWIFT Index forecasts a 1.7% year-on-year GDP growth rate. A similar growth rate was experienced for Q1 and Q2, pointing to a slow down and a flat economy.

SWIFT Index 20-06-2013

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The following graph shows year-on-year GDP growth based on the SWIFT Index, clearly indicating improving growth for the UK, slightly improving growth for Germany, EU27 and OECD aggregates, and stable growth for US.

For EU27, the SWIFT Index points to a small improvement with contraction easing in Q3, at a year-on-year GDP growth rate of -0.5% in Q2 to -0.3% in Q3. The SWIFT Index predicts that the EU27 should turn positive by the end of 2013.

The SWIFT Index predicts that German GDP growth will slowly leave the contraction area with a year-on-year GDP growth rate of 0.0% forecast in Q3.

“A combination of OECD data and our own algorithm based on SWIFT payments volumes, the SWIFT Index provides a strong indication of the direction of global GDP growth” commented Andre Boico, Head of Pricing & Analytics, SWIFT. “The latest SWIFT Index, which shows the strongest improvement in the UK, is supported by the related payments growth that is above 10% for the fourth consecutive month this year. The last time we observed this trend was in Q3-2007. For the EU27 and Germany, although those economies have shown little improvement in the first half of 2013, it is expected that they should turn positive in the next five to six months.”

SWIFT Index (UK) 20-06-2013

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