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Top-10 Economic Predictions for 2010 The U.S and world economies have emerged from recession, and the recovery process has begun. Unfortunately, for most developed economies, this recovery will not feel like one in its early stages. Strong tailwinds (policy stimulus, improved financial conditions, and pent-up demand) are being partially neutralized by equally strong headwinds (rising unemployment rates, lingering hangovers from housing bubbles and the financial crisis, and the likely winding down of fiscal stimulus). Consequently, global GDP will grow only 2.8% in 2010-much better than the 2.0% drop in 2009, but well below the 3.5 - 4.0% trend rate of growth for the world economy. Most emerging markets, particularly Asia, will outpace the developed economies next year. The U.S. economic recovery will begin the year slowly, but Europe and Japan will rebound even more slowly.See Top-10 Economic Predictions for 2010 Top-10 Economic Predictions for 2009: How Accurate Were We? Here is what IHS Global Insight said in December 2008 as we introduced our Top-10 Predictions for 2009:The U.S. and world economies are about to suffer through some of the worst recessions in the period. Most measures of economic and financial activity look like they fell off a cliff in September and October, and have been deteriorating at an alarming rate ever since. The United States is now officially in a recession that started in December 2007. Japan and many European countries are in the same boat. At the same time, growth in most emerging markets is faltering. IHS Global Insight now believes that global growth next year will be in the 0.0 - 0.5% range during 2009, compared with 2.7% in 2008. Ten out of ten of IHS Global Insight's predictions for 2009 were on the mark. The world economy suffered through the worst recession in the postwar period, contracting by 2%. |
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