The Economic Forecast for 2012 is a gloomy one. The world’s top economists and investors predict that it will be a year of volatility and uncertainty for the markets and global economy, as a whole. A Federal Reserve Bank of Philadelphia survey involving forty five economic forecasters predicts a real GDP growth of only 2.4 percent and an unemployment rate of 8.8 percent. Just this August, those figures were 2.6 and 8.6 respectively.
The change in predicted figures occurring within such a short time has much to do with the European debt crisis. Even though most U.S. Banks aren’t exposed directly to the worst of what the European crisis has to offer, its impact is still felt by the global economy.
An economics team at UBS recently came out with their forecasts, which involves sovereign stress (weak governments producing weak policies, thereby, producing poor economic effects), and excess capacity. They predict that: the eurozone will be in recession early next year, the United States will avoid recession, central banks will keep monetary policy loose, and that the emerging global economies will maintain their current growth rates.
The Obama administration has an even more dire prediction for the 2012 economy. They predict that the current turmoil and uncertainty in the economy will keep employment about nine percent through much of next year. They claim that, given the best case scenario that doesn’t include the worsening economic climate, they still might expect an unemployment rate of 8.3 percent, with a meager growth rate of 3.3 percent.
Moody’s economic outlook was just released as well. They have stated that there will be no recession within the United States, that the GDP growth will be approximately 2.8 percent, new jobs will be at 1.4 million, and the unemployment rate will be at 8.8 percent. They predict that the growth will be extremely sluggish, though not slanting toward a downturn, and that the government needs to enact certain policies in order to avoid the turmoil of recession in the upcoming year.
As for the 2012 economic forecast for various other regions of the globe, the outlook is just as bleak, if not moreso. The growth number put out for South Korea is a small one, a mere 3.6 percent. Once again, what is taking place in Europe is going to effect them as well. The South Korean export growth is expected to be just 11 percent, as opposed to the 20 percent from this current fiscal year.
The economic growth for the European Union is a dismal 0.6 percent and a mere 0.5 percent across the seventeen nation eurozone. That same figure was forecasted at 1.8 percent earlier in the year. Five members of the European Union (Belgium, Cypress, Malta, Poland and Hungary) were even told cut their budgets or possibly face receiving sanctions. The GDP is predicted to stagnate around the beginning of the 2012. The unemployment rate throught the EU is expected to fall by just a quarter of a percent, to around 9.25 percent in the upcoming year. While inflation is expected to average around 2 percent.
If the economic outlook for 2012 can be summed up into one word in particular it would have to be “uncertain”. The shaky ground of the European debt crisis is providing a gloomy ripple effect across the economic structures across the entirety the globe. However, some speculate, whether it be wishful thinking or not, that the double dip recession on the horizon will hold off until 2012 has come and gone.