Usa: economic prospects for 2005

According to the majority of analysts and economists, in the United States 2005 will not be very different from 2004 as far as economic performance is concerned.

Inflation will remain well below safety levels, building and consumption, the real pillars of the American economy, will maintain high levels, exports will increase, but not to levels that will show a marked improvement in the trading deficit, and energy costs will decrease.

At the same time, employment and corporate investments will continue to be critical areas, as will the Federal balance deficit, because of the local economic situation and the numerous repercussions at world level.

As far as private consumption is concerned, many expect this to intensify in 2005 as the end of election year will make the overall climate less tense and facilitate family expenditure. The drop in unemployment figures should also see a greater number of shoppers in stores, even though Merril Lynch points out that the big wave of spending at the turn of the century probably won't be repeated because average American families now have everything and product innovations in the technological field will not compensate for market saturation.

Many believe that the falloff in the dollar will continue, but that a 'free fall' has been avoided. The main merchant banks, and the authoritative 'Global Insight', maintain that the current exchange rate of around 1.35 dollars to the euro should persist, albeit with some fluctuations, throughout the year.

Lastly, with regard to Italy's trading position, the persistent and sizeable drop in the dollar has led to a downturn in national exports of about 20% over the last two years, with a market share of total US imports falling below the historical threshold of 2%. In addition to this, competition from the Far East for Made in Italy exports in typical sectors in the medium quality range, is becoming increasingly fiercer in the local market. By the way it is interesting to note that 2005 could be an excellent recovery opportunity for Italy, if national companies can defend and increase their hold over the US market and be actively present, they could turn exchange problems into opportunities for direct investment in local companies and distribution networks.

(Source: Ice)