Several factors conspired to make 2011 a disappointing year for growth, and a time of very great uncertainty and instability, including the Japanese earthquake and tsunami, high commodity and energy prices, the impact of the government’s fiscal tightening and fears over US and eurozone debt. Some of these factors may diminish during 2012 – inflation should fall from current elevated levels – though others will persist. The hope has to be that the downside risks do not manifest themselves and that there are one or two upside surprises. After a barrage of bad news, we could do with some relief.
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