Growth forecasts for key economies are mostly better for 2014, although the consensus hasn't been incrementally more bullish in the last few months. Given leading indicators have continued to get better, there is perhaps some selective upside to the consensus view for the current calendar year.
The US is perhaps a case in point. The consensus still looks bearish on Q4 growth, even though Q3 has proven to be better than expected and the partial indicators have been ok. Similarly the consensus has not been moved on 2014 expectations even as leading indicators have picked up.
Europe has actually seen more positive revisions to 2014 growth, although this is coming from a much lower base than the US. Indeed going from a recession to 1.3% growth is not a good result, but the change from negative to positive should add quite a bit to global output.
Forecasters remain skeptical on Japan's ability to sustain the recent momentum created by "Abenomics" with tax increases this year a risk to activity. Even so, the dramatic turnaround in growth forecasts at the start of 2013 and the upward drift in 2014 estimates suggests that aggressive policy action is working.
Consensus estimates for China have actually been revised a little higher for 2014, perhaps as bears had to reassess momentum into year end, which proved to be ok from a QoQ GDP perspective. But
high-frequency indicators suggest growth momentum faded badly in the middle of November and the risk seems to be that growth will be poorer than anticipated at the start of 2014.
One country which continues to suffer from a huge downward shift in expectations is India. While growth expectations for 2013 appear to have stabilised, analysts are increasingly bearish about 2014. Leading indicators also continue to fall in a similar matter.
The underperformance of emerging markets are behind the downshift in global GDP expectations for 2014, although there is perhaps some upside risk to this 3% number (weightings are different to the IMF estimates and aren't comparable). It seems likely that global GDP will be better than 2011 and perhaps closer to expectations in mid 2013.
