SWIFT Index Predicts Strong UK GDP Growth

Financial messaging provider SWIFT has released its latest SWIFT Index data, which forecasts stronger GDP growth in the U.K. over the third quarter, with a year-on-year GDP growth rate of 1.4%. Other indicators, such as PMI data, have also confirmed the U.K.’s stronger growth.

The index does not foresee marked improvement in the U.S. economy during the third quarter as the SWIFT Index forecasts a 1.7% year-on-year GDP growth rate. A similar growth rate was experienced for the first two quarters of this year, pointing to a slowdown and a flat economy.

Meanwhile, slightly improving growth is estimated for Germany, EU27 and OECD aggregates. For EU27, the SWIFT Index points to a small improvement with contraction easing later this year, at a year-on-year GDP growth rate of -0.5% in Q2 to -0.3% in Q3, and predicts that the EU27 should turn positive by the end of 2013. For Germany, GDP growth will slowly leave the contraction area with a year-on-year GDP growth rate of 0.0% forecast in Q3.

The predictions were based on OECD data as well as SWIFT’s data on payment traffic.

“The latest SWIFT Index, which shows the strongest improvement in the U.K., is supported by the related payments growth that is above 10% for the fourth consecutive month this year,” said Andre Boico, head of Pricing & Analytics, SWIFT. “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.”