It is a tradition among market watchers , to make announcements about the new year economic prospect and expectations. This is a very hard exercise ,which can also be highly risky if you get wrong with your assessment, specially feasible when events which nobody can count on , appears along the way. Even so, it is an interesting experience try to assess what it might become the key event of the new year. My own record ,by the way, it is not that bad .However, I will try to give some guidelines ,instead of specific projections, based on my own judgment of current global economic events.-
1.- Environment will continue to be the key issue for all this year, hitting its peak at the next Global Warming conference to take place in Istanbul ,Turkey on next July. Previously to that event, more than 20 conferences world wide, will keep that issue on the spot light.
2.- Global growth might be a slower pace than the previous two years , because of inflationary pressures due to both oil and food prices increases, and its subsequent probabilities of interest rates increases ,besides the high probability of slowing down in the USA economy growth , and the impact of more than usual, natural disaster such as hurricanes and flooding. Inflation will be the problem to take care of.-
3.- Women will be on the spot light throughout the whole year, because of politics, economy, environment, diplomacy, and sports with the Beijing Olympic games. They might consolidate their influence, as a new source of change.-
4.- Oil prices will be higher following its long term trend, as long as inventories fall after the winter season, dollar depreciation goes deeper , and supply constraint due to geopolitical tension coupled with speculative forces, make their way through to push prices upward .
5.- From the financial point of view, it is expected that important adjustment will take place, specially from those firms anxious to get rid of sub prime market losses. There will be a reshape of financial services industry.
6.- Other industries to keep an eye on, are the automobile and aviation ones ,both connected to the top issues of environment and oil prices . In the automobile industry, Toyota should continue to move ahead with its goal to become the number one in the USA markets and in the world, within the segment of fuel efficient cars. –
