Predicting the economic future
By Peter Switzer

(continued)
And while this is not great news for business owners, the Asian region promises to be a better place to be for business compared to Europe and the USA. This means local demand will be critical to the health of Asian economies and puts pressure on regional governments to come up with enlightened policies — both fiscal and monetary.

One positive from this financial turmoil-generated economic slowdown is the impact on inflation. The IMF says slower growth and lower commodity prices will bring inflation down to around 3%.

Be alert!
Business owners should be alert to any new, shock revelation about international financial institutions that could rock both the global financial system and world stock markets. If this kind of outcome can be avoided into the New Year, it is possible confidence will return to equity markets and this could turnaround both business and consumer confidence as a precursor to higher business investment and employment by mid-2009.

Snapshot of South Korea and Japan
According to the IMF, South Korea is tipped to grow by 2% in 2009, which compares unfavourably to the 5% growth for 2008. The worst time will be in the first half, but the second six months should pick up as the global economy recovers. A minority of economists think the economy could contract in 2009 and this has not happened for 11 years.

Japan is not expected to get off lightly with the economy to contract by 0.1% in 2009 and inflation to turn into deflation because of the recession.

The OECD said, "Output growth is likely to be sustained in the first half of 2009--albeit at low rates--by residential investment and fiscal stimulus." However, it added, "as the fiscal stimulus fades, output growth is projected to stall in the second half of 2009 before picking up in 2010."

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