» If Asia stays right in 2006, so will the world economy

If Asia stays right in 2006, so will the world economy

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If Asia stays right in 2006, so will the world economy

With a couple of notable exceptions 2005 was a good year for the world economy. Despite rising US interest rates and soaring oil prices there was rapid growth in the US and even more rapid growth in China and India. Emerging Asia did well too and Japan managed faster growth than either the UK or the eurozone. The exceptions were the European big three and the UK. In Europe Germany barely reached 1 per cent growth, Italy barely grew at all and France seems to have grown by little more than 1.5 per cent. As for the UK, well we all know the story there.

But that will soon be last year’s story. What will be the stories of 2006 in the world economy and, arguably more important, where might be the surprises? The best place to start is with the conventional wisdom. This is that there will be another year of good growth for the developed world, maybe a bit slower in the US but faster in Europe; stock markets will rise; there won’t be an energy crisis; and the two giants of China and India will continue to boom.

The bar chart shows the results for The Economist poll of forecasters for growth this year and next. As you can see it is all pretty benign stuff.

More: news.independent.co.uk

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