As the end of 2010 approach, it is useful to take a look back at the most important economics event such that it might be possible to look forward. So ,let start .
a.-There is probably no too much disagreement to consider among the key events in this year, the crisis in the Euro zone and its implication. Alternatively, the Euro requires rule to be considered otherwise it does not work up to what it was created.
b.- The USA recovery seems to be slower than required ,but at least from my point of view it is what could have been expected. The financial sector crisis take a while to be back to normal.-
c.- Global economy does not work as close world economy. It rather works as different segment which does not add up to a fixed previously settle outcome. Thus while coordination was necessary in 2008 to get the whole system back on track, as time went by , it arose different requirement for different economic settings. While Europe needed a more conservative stand, others industrialized economies do not necessarily needed so .Besides emerging economies were on the opposite side of the economic cycle, taking good care of keeping the fundamental ,to avoid the ghost of inflation.
d.- “Currency war” and the war which did not happen .It was a possibility and it still a real one. However, because global economy is not equivalent to a close world economy, it is unlikely it will happen .Diversification works in this case to avoid such outcome. There are more than one market at half of its potential, capable to absorb product from everywhere. Emerging economies ,China, and Latin America, growth a steady pace.-
What to expect for 2011?.
a.- Te whole recovery should take place. However, inflationary pressures might arising from food prices increases, oil prices back to its trend , affecting the pace of global economic growth. Even so the IMF project an economic growth of 4,2% for the next year, with an average of 6,6% for the BRIC group.
b.-The trend will continue for raw material increasing prices. This will represent a new challenge for market inflationary expectation, as long as those prices are influenced by dollar variations, speculative forces ,and real conditions arising from strong demand .-
c.- Technology will continue to be the driving force for economic of scale, cost reduction and efficiency in productive process. However, Human capital is getting more important to keep the pace of such innovations. How about the trend?. Asian countries have a strong potential to take a stronger role. Keep on eye on South Korea, Homg Kong ,Taiwan just to mention a few.On the other side, Africa seems to be left behind.-
