Year of Dragon 2012 - Asia to be World Engine of Growth

Year of  Dragon 2012  - Asia to be World engine of Growth

The year of the Dragon is a year of extremes and disturbances for both the economy and people.

On a general level, this year  sees possible  slow,  negative or slow  growth across the world for the  2nd half of the year . There are already sign showing  since last three months, but as most government will take  action to  stabilize  their economy , good  prompt economy   indicator will see good stable growth at least for the next 6 months .

Besides the credit crisis, the world economic woes are also   slowed   by the turmoil in the Middle East, where geological  and  political risk remain highs, thus causing higher oil prices that will fur the constrain global growth.

Credit  Rating downgrades will be  caused some small domino effect  especially in Europe , where they cease to move markets as much 

 With economic unrest, we can expect the economy to take a uphill  climb for a short while  before  going on a roller coaster  ride  with much  turmoil  foreseen    which might  cause Economic and financial policies to bubble  which  will   need to rely more heavily on government intervention and support. Globally, the economic outlook is difficult, with countries such as Egypt and ones in South America near bankrupt and though they will get aid from other countries, it will not help much. 

Europe’s economy is total  actually will  not be too  bad, where there are changes that lead to improvement, particularly for Germany, England, and France will perform better. The decline in banking and insurance in the past year is no longer. Internal consumerism and spending is stable.  . The Great Britain Pound will still be a strong currency  

In 2012, most the countries in Southeast Asia is foreseen will have growth in economy. India, Singapore, Philippine,  Thailand, Malaysia and Indonesia will also have some improvement. However, Thailand will again have internal conflicts that will affect the economy and tourism.   other countries of Asia will experience a more rapid growth and exports will increase. The Yen will be a particularly strong currency

For the year of the Dragon, China to do all it can for growth, president Hu Jintao said in His New Year address that the country aims for steady and ‘’ growth this year, amid an unstable global recovery. Still, China’s delicate monetary balancing act will be the theme of year : it might spar with the US more aggressively in terms of currency battles.

Internal retail and exports will be weaker, posing a threat to the economy. But  as  manufacturing companies can easily adjust and be adaptable in that they  rather than making goods for exports, they can be made for internal consumption in China . Similar to Indonesia , who could not fare well in quality  export product, it has generate good economy  figure  by focus manufacturing for local consumption during the last decade  . This will help the economy and the lives of the people through reducing the chance of an increasing unemployment rate. 

The global slowdown actually last gave   China a good opportunity, where it allowed China to match the western countries in terms of economy in 2009 – 2010, that China does not only rely on exports and spending from outside. China did  use this opportunity to manufacture high tech and high end or higher quality products for the  betterment   for China’s economy long term

INFLATION  is foreseen  will  ease in most of Asia amid the general slow down, capital outflows will be the issues to watch and Asian currencies will take on the stress out and slight depreciation is possible especially for the Indian , indonesia and  Thai currency .

Thai economy should stabilise quite well as it is foreseen Tons of money  will roll back into the economy  as Thai land needs to solve their water flooding  problems for the next 2  years  at least .These  will go  into infrastructure ,and Thailand  ultimately  will come back after 

   

 Most countries will go for aggressive monetary easing. The fiscal conditions of most nations in the region are stable and that will help enormously .

THE surprise currencies of 2012  were the US dollar and the yen. US  always has it way with it currency  despite a weak economic recovery and a  during   the recent Standard and Poor’s downgrade, the US  Dollar had showed resilience  and  will progressively move forth ,while the US election  generally  will bring  some  spark  to the economy as the American  goes for Election of their New President .Another possible major contribution  is   the trouble in Europe,  the resulting panic drove risk- averse investors back to the greenback. Besides, the money machine in Washington like to  can print more dollars, if necessary.

Europe  possibility to revive back the Euro  is much to be speculated as it  involves  too many countries to come  up  with a definite solution

 Gold May not lose it lustre  during Dragon Year

THE yellow metal will move  again for the first  half of the year  as bullion  will hits it peak  during the year of dragon  

 Gold  will not  head  for the  slump as predicted  even with possible US Dollar  gain , as  Gold mining stock  and Gold mines  will not be as productive since Europe demands  may reduced ,but bank hold on  Gold will increase  due  to the  instability in  the major  part of middle east

  

 Slow   in demand for oil

WITH growth in resources- hungry China and India slowing and monetary tightening measures in place, the craving for oil  will slow for a while  and especially when  Middle   East  is readjusting  with New Government in place  .Even in the event of any political shock, Saudi Arabia would still be able to meet excess demand and Europe and US  are getting more involved in the region  after collapse of the last Libyan regime .