Happy New Year - this could be the year the recovery starts

Last year a group of economists predicted a modest recovery for the British economy. Many of the economic indicators suggested that they might be right. Manufacturing was powering ahead and exporters were doing well. However, I thought they were over optimistic and said so many times in my twitter stream. Several people including one of my best friends accused me of talking down the economy but I am sorry to say that events proved me right.

This year, economists are predicting gloom and doom and again many of the indicators are suggesting that they may be right. Again, I take a different view. I think the pessimism is exaggerated. I believe that 2012 will be the year in which we see signs of recovery.

Why do I say that? The answer is that the BRIC (Brazil, Russia, India and China) and CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa) countries as well as other emerging economies are growing so quickly internally that they can lift the world from recession. That was the outcome that I envisaged at the start of the downturn (see The Coming Economic Downturn: How it will affect inventors and what they can do).

I am not alone in anticipating recovery. Neil Mackay, managing director of Advantage Business Angels for whom I have a particularly high regard has said so too in "A First Sighting of Recovery" though for somewhat different reasons.

The only fly in the ointment I can see is that property prices are falling in China. This seems to be the result of government policy but if real estate has been taken as collateral it could affect the Chinese banking system. Then we would all be in trouble.