The official growth forecast for 2013 at 3.6 percent probably will be realized readily. In fact, GDP growth might be even higher below 4 percent.

As I have shared with you my inflation forecast for 2014, it is time for GDP growth. Our key concern is whether GDP growth in 2014 will be higher compared to 2013. However, for now, we only know the GDP growth figure for the first half of the year (3.7 percent) and Q3 figure will have been released when this article is published. Hence, the 2013 GDP growth figure also should be forecasted.

Industrial output figure for October was released yesterday. That’s where I will start. Monthly figures are highly fluctuant and might be misleading. For instance, output growth was remarkable in September and negative in October. So it is healthier to focus on three-month averages. The table below shows year-on-year industrial output and GDP growth figures since the first quarter of 2012. For industrial output, averages for the last three months as well as of the last ten months as of October are available as well.

Industrial output growth since the first quarter of 2012 was clearly V-shaped: it bottomed by the last quarter of 2012 and started recovering gradually thereafter. Here are some key points: industrial output growth in the first ten months of 2013 was only slightly higher compared to 2012. For the three months before October we see a decline in industrial output in 2012 at a rate smaller than the output growth in the third quarter. In 2013, the growth rate in the first 10 months is again smaller than the rate in the third quarter although there is no decline in output. Exclusively on the basis of output growth, we can expect output growth rate to be only by an inch higher compared to 2012.

So, what do these imply for GDP growth in 2013? With a closer look, the table reveals that output growth and GDP growth which went hand in hand in 2012 will not be that close in 2013. Still, and taking other data at hand into account, the reasonable forecast would be that GDP growth in the third quarter will be the highest of the year (it will most probably not be highest by far; rather it will be at around 4.7 percent slightly higher than the Q2 growth). Anyway, the figure will have been announced when you will be reading these lines tomorrow. In the light of this information, we can say that the official growth forecast for 2013 at 3.6 percent will be realized readily. In fact, GDP growth might be even higher below 4 percent. I will continue with the forecasts for 2014 next time.

This commentary was published in Radikal daily on 10.12.2013