Predicting the economic future
By Peter Switzer

The 2009 year ahead is bound to be the most challenging year for Asian economies and business as the USA, the Eurozone and Japan grapple with recessions.

The OECD’s latest forecasts say the US will contract by 0.9%, the Eurozone by 0.5%, while Japan’s full year growth will be 0.1%.

Looking at these numbers, there is a suggestion that the second-half of 2009 will be better than the first six months.

Forecasts are never easy, but with frozen credit markets only thawing slowly and housing problems in the USA and the UK not improving quickly, it is hard to support a case for optimism.

“The ongoing adjustment in housing markets still has a long way to go,” said Jorgen Elmeskov, Director of Policy Studies in the OECD’s Economics Department.

Total production for the 30 countries in the OECD group is tipped to fall by 0.3% in 2009. Things improve slightly with 2010 shaping up as a 1.5% growth year.

So what about Asia?
The International Monetary Fund (IMF) has placed Asia in the slow lane but not in the recession rut. “With the recent financial turmoil, any hopes that Asia would escape the crisis unscathed have evaporated,” said Jerald Schiff, senior advisor for the IMF's Asia Pacific Department. This may be true but the intensity of the pain will be less in Asia than most economic regions.

What about the recovery?
For those looking for a recovery, late 2009 has been earmarked as the time for better economic news but the year is only expected to produce 4.9% growth. That means the first half could feel pretty slow for businesses.

Page 1 | 2 | 3