News / Economy

Economic Turbulence Forecast for 2012

There are encouraging signs for the world's largest economy as 2011 comes to an end. American consumers are spending more, the housing market is improving, and employers are laying off fewer workers.

But the unresolved debt crisis in Europe, the slowdown in China and U.S. spending cuts pose a serious challenge for policy makers as 2012 begins.

High unemployment in the United States, rising debt and Congress' inability to do anything about it were major stories in 2011.  But some bright spots are emerging as the year comes to a close, according to George L. Perry, a senior fellow for economic studies at the Brookings Institution.

"One was the export sector which grew really very well. Another area was construction outside of home building. Business construction was picking up and construction in particular areas like commercial."

U.S. unemployment is at its lowest level in more than two and a half years, and consumer confidence is rising. But there are dark clouds ahead as the New Year begins.  China, the world's fastest growing economy, is slowing down, and Europe's debt crisis shows few signs of easing.  

"We export a great deal to Europe," Perry points out. "And if Europe falls into another recession, that export growth is going to end. And that will affect jobs in the U.S. and cause the U.S. to move towards recession."

Rising inflation and the slowdown in Chinese manufacturing have already curbed demand for some commodities.  But the slowdown is due in part to Beijing's efforts to prevent its economy from overheating, adds Perry.

Reflecting on the global uncertainty, World Bank President Robert Zoellick urged Europe and its biggest trading partners to act responsibly.

"Europe has to rescue Europe, okay? And it's very important. If there's any message when I'm asked, 'Well, what can the U.S. do and what can China do?' The best thing they can do is clean up their act at home, be a source of growth at home, and, secondly, be a source of confidence to the market."

Zoellick is encouraged by ongoing reforms in China aimed at reducing the country's reliance on exports, but he warned U.S. lawmakers against further delays in dealing with the nation's rising debt, now close to $15 trillion.

"The downgrade of America from triple A didn't affect the finances today, but it may be one of those events people look back on 10 years from now and say, 'Did they get the warning? Did they pay attention or did they continue to do what they were doing?'"

Unless leaders are willing to make the tough decisions needed to stabilize the global economy, Zoellick and many leading economists say problems in Europe, the U.S. and China could coalesce into a "perfect storm" in 2012 that could rival the financial crisis of 2008.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

US Urges Restraint in Hong Kong Protests

Protesters angered by Beijing's decision to only approve candidates that it sanctions for Hong Kong's leadership elections in 2017 More

Archive of Forgotten UCLA Speeches Offers Snapshot of History

Recordings of prominent voices in social change, politics, science and literature from 1960s, early 1970s now available on YouTube More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treasure Hunters Seek 'Hidden Treasure' in Central Kenyai
X
Gabe Joselow
September 29, 2014 6:20 PM
Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Video

Video Reconstruction? What Reconstruction? Life After War in Gaza

It’s been a month since Israel and the Palestinians agreed to a ceasefire to end 52 days of an air and tank war that left 60,000 homes in Gaza damaged or destroyed and 110,000 homeless. Sharon Behn reports that lack of reconstruction is leading to despair.
Video

Video US, Saudi Arabia and UAE Hit Islamic State's Oil Revenue

The United States, Saudi Arabia and the United Arab Emirates have bombed oil facilities operated by Islamic State militants in Syria. It was a truly collaborative effort, with the two Arab countries dropping the majority of the bombs. The 12 refineries targeted were estimated to generate as much as $2 million per day for the terrorist group. VOA Pentagon correspondent Carla Babb has the story.
Video

Video Russia's Food Sanctions Raise Price Worries, Hopes for Domestic Production

Russia retaliated against Western sanctions imposed for its actions in Ukraine by halting food imports from the West. The temporary import ban on food from Australia, the European Union, Norway and North America has Russian consumers concerned that they could face a sharp increase in food prices. But in an ironic twist, the restrictions aimed at the Kremlin have made Russia's domestic food producers hopeful this can boost their business. VOA's Daniel Schearf reports from Moscow.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.