GDP growth exceeds expectations
If we begin with the GDP growth outlook: according to our macroeconomic forecast from late January, we projected GDP growth for the year at 3.2%. We had expected that this growth would be driven mainly by a rebound in tourism plus moderate growth in consumption and investment. The national accounts for the first nine months of the year are now available, as are statistics indicating probable developments in Q4.
In short, we now expect GDP growth for 2021 as a whole to turn out considerably stronger than we had forecast at the beginning of the year. The difference is attributable to the much greater buoyancy of domestic demand than we had expected. For example, in our January forecast we projected private consumption growth at 1.9%. For the first three quarters of 2021, however, the actual growth rate was 5.4%, and data such as payment card turnover figures and consumer goods imports suggest that growth for the year as a whole could even turn out slightly higher. Developments in private consumption weigh heavily in the GDP growth rate, and by the same token, this difference plays a major role in the underestimation in our January forecast.
A similar tale can be told of investment, which is set to measure much stronger than we had anticipated. In January, we projected investment growth for the year at just under 4%, while the growth rate for the first nine months of 2021 was more than 13%.
On the other hand, the outlook is for export growth to be broadly in line with our early-2021 forecast. Strong growth in domestic demand is accompanied by increased imports, of course, and the contribution of net trade to output growth will not be as favourable as we had projected in January.
The employment situation has improved markedly
The relatively swift economic recovery has resulted in more rapid job creation than looked probable early in 2021, and unemployment has also fallen sooner. In our January forecast, we predicted that unemployment would average 9.6% this year and then taper off to an average of 4.6% in 2022. On the other hand, the jobless rate was already down to 5% by this autumn and has remained there since.