Every pundit and futurologist I have met or heard has said that 2012 is the hardest year to call. I agree and that’s my let-out when this is reviewed in 12 months’ time. So here goes:
UK: Growth will return after a technical recession in the first half of the year. The UK economy will increasingly look like the more attractive of Europe aside from Germany and Scandinavia. Inflation will fall to three per cent; the pound will gain strength against the dollar and Euro by about five per cent. Unemployment will peak at 2.9 million. We will have a ball with the Queen’s Golden Jubilee and the Olympics where the UK will win 26 gold medals.
Europe: The Eurozone will go into a minor recession but will emerge again by the year-end. The debt crisis will only just have a clear resolution by Easter by which time the mechanism for expelling Greece (they will not volunteer to leave) will be in place. The ECB will buy sovereign bonds having bought private bank bonds in 2011 to the tune of half a trillion Euros. Italy will have a torrid year and suffer the effects of austerity measures—large-scale public disorder. And maybe a new opera and Ferrari. The Eurozone will then achieve some stability and the crisis will have passed.
USA: The economy will continue to recover, though the electorate will continue to feel less well-off. Depending on the Republican nomination, Obama will just be re-elected in November—even if he is pitted against Romney. The debt will reach $16 trillion but few will care—much. The US recovery will help Obama be re-elected and the global economic confidence to lift.
World: Assad of Syria will be gone by June and there will be a quiet revolution in Iran that will depose Ahmadinejad. Pakistan will continue its bad relations with the US and be more isolated in the region. The new Chinese premier will preside over growth—but not double digit—in 2012.
Other: There will be a flood/earthquake/tsunami/volcanic eruption. Perhaps, just perhaps, an improvement in national matters will give us back the capacity to be shocked by these events. Cyber attacks, commercial and geopolitical, will rise and be a cause of rising international tensions. The Artist will win Best Picture at the Oscars. That dog deserves its own Oscar!
So there are some predictions but no one will be less surprised than me if they are all wrong!