Rough 2011 predictions

I suppose I should make some falsifiable predictions for the year ahead – so I can explain at the end of the year why I was so wrong 😉

Lets go (note, these are my rough picks – they aren’t associated with anyone else, and they definitely don’t exist in a professional capacity) :

  • NZ GDP growth will near 4%pa by the end of the year.  Inventory accumulation will be a major contributor.
  • Consumption growth will be weaker than economic growth – but will accelerate during the second half of the year.
  • NZ unemployment will hold above 5% – but will be in the lower 5’s.
  • The housing market will remain weak.
  • The Reserve Bank will remain dovish on rates over the first half of the year – but then start hiking in June.
  • Farmers paying down debt on the back of high commodity prices, combined with increasing risk taking/confidence by investors, will see interest rates fall over the first half of the year.
  • National and Labour will compete over “savings plans” which will involve far too much in the way of distortions, compulsion, and poor “incentive” programs for my liking.  As a result I will post on them constantly.
  • National will win the election with effectively the same coalition government as we have now.
  • Aggregate commodity prices will peak in March, but will not decline significantly.
  • Oil prices will rise 10-15%.
  • Australian growth will fall slightly below trend.
  • The US recovery will be lower than expectations in the early stages of 2011 on the back of a slight run down in inventories – however, underlying activity will pick up sharply from the middle of the year.
  • The Fed will not lift rates or cut back on QE.
  • Israel will attack Iran to destroy any nuclear capabilities – and nothing will come from it (have put an entire dollar on this on iPredict – with an order to buy another 100 stocks)
  • Chinese growth will slow to 8%.
  • Portugal will teeter, but the essence of the debt crisis will be forgotten again over the year.
  • Japan will tighten policy too early.
  • Subsidies for solar power will become a more common policy around the world.
  • An international mission to Mars will be announced.
  • Update: India will win the Cricket World Cup.
  • Update:  France will win the Rugby World Cup after disappointing in group play.
  • Update:  Gold price will fall – say it will be lower on December 31 2011 than it was in December 31 2010 in US dollar terms
  • Update:  The NZ TWI will be volatile, but on average unchanged!
  • Update 2: Arsenal will win the PL in 2010/11
  • Update 2: LFC will be top of the PL in 2011/12 at Christmas (but will end up coming 4th)
  • Update 2: Wellington Phoenix will come in sixth in the regular season – but will make a semi final.  They will be in fourth place by the end of December 2011.
  • Dave

    Any thoughts on “The 24% price pick” for house prices, 1.5 years on from August 2009? We still have “intense lack of building, extreme loosening in monetary policy, lack of movement on structural imbalances, and sharp increase in net migration”, which were all factors you quoted in support of it, so why didn’t it happen? I guess you could argue that you still have 1.5 years to go. 🙂

  • @Dave

    This guy:

    http://www.tvhe.co.nz/2009/08/27/the-24-price-pick/

    I would note that there were some pretty big factors between now and then: 1) a significant change to the tax status of housing 2) the fact that the availability of credit has not improved as much as expected 3) the much weaker labour market (increasing the average size of the household) and 4) an unanticipated drop in migrant arrival numbers 5) a significant cut in the top tax rate 6) weaker inflationary pressures on the back of softer than anticipated economic growth 7) an adjustment in households expectations regarding the future path of house prices.

    House prices did get up 6%, but then these changes (especially the tax changes) lead to significant downward pressure on prices.

    😉

    Note: That specific house price forecast was from my work, the above forecasts aren’t particularly serious – they are just me playing around in an unofficial capacity.

  • Where are the football predictions? Who will win the Premier League? Will the Nix make the top six? Will Liverpool be relegated? 😛

  • Just in terms of your prediction that Israel will attack Iran over its nuclear weapons capabilities, I think Israel’s cyber attack of Iran’s nuclear enrichment facilities has made that action less likely. Have you read about it? I think they made a judgement that a subtle attack by other means was going to be more effective than a full blown attack that would likely incense the whole of the middle east…

    Here’s an article if you’re interested: http://www.nytimes.com/2011/01/16/world/middleeast/16stuxnet.html?_r=2&src=twt&twt=nytimes&pagewanted=all

  • Chinese growth will slow to 8%?? it do not seem so

  • @goonix

    Excellent point, predictions added.

    @Harry C

    Interesting stuff, thanks.

  • raf

    Matt, Your Arsenal forecast fills me with much hope but my head tells me the Damned United will still sneak home.

  • @raf

    I hope not, I just do not want Manure to win

  • Mike Bell

    What’s the prediction for the plight of isreal? with the world watching, focusing their Stage Lighting on the isreali landscape, do you think it will subside or implode?