Our forecast for 2010 features sluggish GDP growth, employment gains that are too slow to prevent a further modest increase in the unemployment rate, low (and probably falling) core inflation, and a Federal Reserve that “exits” from some unconventional monetary policies but keeps the funds rate at its current near-zero level. For the last US Economics Analyst of the year, we try to answer what we think are the 10 most important questions for 2010.
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Economic awareness in 2010.
Emerging Markets passed a major stress test in 2009 andhave moved to center stage in the global economy.Theyear 2009 will be remembered as the year that EM carriedthe global economy, with EM consumption well surpassingthat of the US as a share of total global consumption.Indeed, over the past four years, EM contributed more toglobal GDP growth than all of the developed markets. Nextyear, EM countries will stage a powerful recovery, and weforecast 5.8% growth, slightly above estima
“Day by day, fears are growing that Greece or another weak country may default on its sovereign debt obligations, forcing the richer countries in Europe to ride to the rescue or risk having one or more of its most vulnerable members leave the 16-nation euro zone.”