Economic predictions for 2012 – world growth will slow

Comment

Market forecasting firm IHS Global Insight has published its economic predictions for 2012, and it's not good news.

World growth will slow in 2012, says IHS chief economist Nariman Behravesh, but the question is, by how much?

In its Top 10 Economic Predictions for 2012, IHS says that the US economy will probably avoid a recession but Europe won't, and meanwhile, China’s economy is slowing.

The company goes on to offer two scenarios dependent on the extent of the decline of Europe and China's economies:

  • if Europe only suffers a mild recession and China does not experience a bad slowdown, world growth will decelerate from around 3% in 2011 to around 2.7% in 2012;
  • if the recession in Europe is much deeper or the slowdown in China more pronounced, then the global economy will face much weaker growth and possibly another recession.
IHS top 10 economic predictions for 2012
  1. The United States will probably avoid a recession.
  2. The Eurozone is headed for a second dip.
  3. Asia will continue to outpace the rest of the world.
  4. Growth in other emerging markets will hold up, for the most part.
  5. Commodity prices will (mostly) move sideways.
  6. Inflation will diminish almost everywhere.
  7. Monetary policy will either be on hold or ease further.
  8. Fiscal policy is set to become even tighter in the United States and Europe.
  9. With the exception of the euro, the dollar will keep sliding.
  10. Most of the risks to the outlook are on the downside.

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