You may remember me saying that official estimates for 2013 GDP growth were 1.4% which was corroborated by the IMF and the chancellor published it in Dec 2013. By that time, economists have seen strong growth and were predicting growth of 1.6% which I accepted; but others were even predicting growth of 1.9%.
Because I was setting a target of 3% for 2014, I was attracted to the 1.9% forecast. Late January 2014, the preliminary GDP growth for 2013 was published at 1.9% the high end of expectations. After celebrations, I forecasted that it may be reduced to 1.8%. The February report reduced it to 1.8% and I said even if it goes down to 1.7% in March, we'll still be on target for 3% in 2014. Well, here we are in march and it has been reduced to 1.7%; but it's still ahead of the consensus 1.6%.
Political shenanigans seem to be derailing this target vis-a-vis the Crimean situation. It looks like old world politics are still with us. Are we going to let this dampen our spirits? Heck no. The Chancellor had revised 2014 GDP growth from 2.4% to 2.7%; just as well in the current circumstances.
GDP growth does depend on international trade and business profitability. Political activities, such as the situation in Crimea, do limit that profitability as international trade is reduced. Whether we overcome it will depend on how long it lasts. The Crimea situation may not be the only thing that's hampering growth. Besides, we can't predict what shocks to the system we'll encounter during 2014.
The WPM does not change its targets no matter what happens. They just admit they were wrong and use the lessons to inform future targets. The WPM tries to solve the causes that make them miss their targets.
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