Economist at Danske Bank point out the after the stronger-than-expected growth data for the fourth quarter data as well as indications that the Covid wave has peaked earlier, they lift their GDP forecast and PMI profile once again.

More frontloaded recovery

“We now look for an even more frontloaded recovery starting already in early Q1 rather than late Q1 as the service sector is already showing clear signs of rebounding and companies are likely to raise production in anticipation of better demand in the coming quarters. It follows a Q4 GDP release on Monday that came out flat at 0.0% q/q versus our expectations of -1.0% q/q.”

“The frontloading lifts our GDP forecast for 2023 to 5.5% from 4.6% as 1) the stronger-than-expected Q4 lifts the carry over into 2023 and 2) an increase in the Q1 forecast lifts the starting point for 2023 further. However, a more front loaded recovery leaves room for less growth in 2024 as the effect from pent-up demand fades earlier.”