There’s something reassuring about the slow news period between Christmas and New Year. The stream of stories about shark attacks and stock-take sales, supplemented with plenty of end of year lists, suggests that maybe it is possible to stop the world and get off — that we can take time out to fall asleep in front of the cricket over a plate of leftover turkey. Of course, it’s a fallacy to think that the world slows to meet our end of year timetable, and this Christmas we’ve been reminded of that as our front pages continue to be splashed with disturbing images from the Gaza strip.
And a look ahead to the year about to unfold doesn’t make for relaxing summer reading either. In the past two weeks, we’ve been treated to a barrage of depressing economic forecasts like this:
- In Australia, unemployment is set to rise from 4.4 per cent to 8 per cent, costing a further 400,000 people their jobs and pushing the number of unemployed to more than 900,000 — the worst level in a decade. “Unemployment of 8 per cent in 2010 is on the cards. It’s quite likely,” said Melbourne Business School professor Mark Crosby. — The Australian
- In the US, many economists believe the unemployment rate will keep climbing — hitting 8 percent or close to 10 percent at the end of 2009. Since the recession began in December 2007, the US economy has lost nearly 2 million jobs.
- In Britain, unemployment will soar above 3 million as Britain’s manufacturers, retailers and service industries feel the full effects of the downturn, according to the British Chambers of Commerce, which said economic output is set to fall this year by more than in the last recession of the 1990s. The jobless count will rise to 3.1 million, or 10% of the workforce, the business group predicted. It said the UK economy could shrink by as much as 2.9%, leaving the country to face the “distinct risk” of deflation this year. As a result, the government’s depleted finances will remain in a parlous state for many years. — The Guardian
- And as for the all important Chinese economy: As many as 70,000 small and midsized companies may have gone bankrupt in the past year, estimates Jeongwen Chiang, associate dean of the Cheung Kong Graduate School of Business in Beijing. Overall, Chiang thinks the bankruptcies could grow to 20% of export-oriented manufacturers in southern China. “Someday the growth engine was going to stop, and they weren’t ready for it. They don’t know how to handle a recession,” warns Chiang. The bankruptcy trend is expected to lead to a surge in unemployment in 2009. — Businessweek
All eyes will be on the Rudd government this year as they attempt to stave off a recession (another stimulus package on the cards?) and rising unemployment with the competing challenges of introducing ambitious big ticket items like the ETS.
It’s not as s-xy as last year’s Sorry day kick off and Obama’s promises of hope and change, but if nothing else, the news this year is going to make for interesting reading. So for those of you who’ve stepped in from the sunshine, welcome to 2009. Dip your toe in with Crikey as we ease ourselves into the year ahead, but brace yourselves for the undertow.