Cautiously Optimistic for 2012
- By Asad Dossani, Author, The Lucrative Derivative Report
For all the doom and gloom that filled the news headlines in the last year, the economic and financial situation is looking better for the upcoming year. Of course, many problems and concerns still remain, but the global economy is in a better situation than it was in one year ago. The best way to describe the outlook for 2012 is cautious optimism.
The world's largest economy is showing signs of a recovery. The most recent US jobs report shows continued gains in private sector employment combined with a falling unemployment rate. The trend has been positive over the last year, despite the debt ceiling problems and continued political paralysis over the last year.
Economic indicators in the US have been more positive than negative recently, and this is a good sign. There is certainly a long way to go before the US economy is in full recovery mode, but the trend is heading that way. Many problems still persist including high unemployment, sluggish growth, and increasing debt levels; all of which may be a drag on overall economy performance.
The Indian Outlook is a bit more mixed. The last year has seen deterioration in economic indicators, rather than an improvement. This includes falling growth rates, a falling currency, and a falling stock market. Much of this is due to political factors and corruption that are dampening investor optimism.
The good news is that the economy is still in a good position despite the falling indicators. Growth remains at a high level, and the rupee has stabilized more recently. In early 2009 growth was falling and bottomed out at around 6% before once again rising above 9%. If the global economic situation continues to improve, then India's growth rate should at least stabilize, if not rise again.
The global economy's biggest risk in 2012 is a continued unfolding of the Eurozone debt crisis. A severe deterioration in global economic prospects may occur if the Eurozone crisis gets severe, and no country will be immune to this. The outlook for Europe is gloomier than anywhere else, as many of the countries are facing rising debt levels and recession at the same time.
The start of the year has seen markets do well, only to be held back by continued Eurozone tensions. The fate of the global economy in 2012 will be determined in large part by how the Eurozone debt crisis plays out. If things stabilize and do not get worse, we should be quite optimistic about 2012, as growth in economies around the world will help the Eurozone at the same time.
However, if things get dramatically worse, Europe will suffer, and growth will be dragged down elsewhere. The overall assessment means that we should be cautiously optimistic for 2012. The risk of a crisis exists and is significant, but economic prospects are generally looking better.
- By Asad Dossani, Author, The Lucrative Derivative Report
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| Asad Dossani |
The world's largest economy is showing signs of a recovery. The most recent US jobs report shows continued gains in private sector employment combined with a falling unemployment rate. The trend has been positive over the last year, despite the debt ceiling problems and continued political paralysis over the last year.
Economic indicators in the US have been more positive than negative recently, and this is a good sign. There is certainly a long way to go before the US economy is in full recovery mode, but the trend is heading that way. Many problems still persist including high unemployment, sluggish growth, and increasing debt levels; all of which may be a drag on overall economy performance.
The Indian Outlook is a bit more mixed. The last year has seen deterioration in economic indicators, rather than an improvement. This includes falling growth rates, a falling currency, and a falling stock market. Much of this is due to political factors and corruption that are dampening investor optimism.
The good news is that the economy is still in a good position despite the falling indicators. Growth remains at a high level, and the rupee has stabilized more recently. In early 2009 growth was falling and bottomed out at around 6% before once again rising above 9%. If the global economic situation continues to improve, then India's growth rate should at least stabilize, if not rise again.
The global economy's biggest risk in 2012 is a continued unfolding of the Eurozone debt crisis. A severe deterioration in global economic prospects may occur if the Eurozone crisis gets severe, and no country will be immune to this. The outlook for Europe is gloomier than anywhere else, as many of the countries are facing rising debt levels and recession at the same time.
The start of the year has seen markets do well, only to be held back by continued Eurozone tensions. The fate of the global economy in 2012 will be determined in large part by how the Eurozone debt crisis plays out. If things stabilize and do not get worse, we should be quite optimistic about 2012, as growth in economies around the world will help the Eurozone at the same time.
However, if things get dramatically worse, Europe will suffer, and growth will be dragged down elsewhere. The overall assessment means that we should be cautiously optimistic for 2012. The risk of a crisis exists and is significant, but economic prospects are generally looking better.
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