Today to spice things up I'm going to interlace a few quotations from Warren Buffett, probably the least materialistic billionaire on the planet, with my summary of EU economic forecasts. Let me start with one that encapsulates so many of my vents: "The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves–and the better the teacher, the better the student body."
I'm coming to the conclusion that Hungarian journalists use adjectives to describe the state of the economy or politics that are seldom used in English. In English-language media one is hard pressed to find adjectives like "deplorable," "lamentable," or "miserable" when describing the current economic crisis (though Warren Buffett, who is not prone to using trite adjectives, said that the U.S. is in the midst of an economic Pearl Harbor). I actually looked around on Google News and found no equivalent to describe the European Union's latest prognosis for its member economies in 2009.
Yet this is exactly how Népszava introduced the latest figures. Actually, the prognosis is not as bad as I had imagined. Of course, economic prognoses are not very reliable, particularly in volatile markets. Again, let me quote Warren Buffett; just substitute economic forecasters for stock forecasters: "The only value of stock forecasters is to make fortune tellers look good." The upshot is that for the eurozone they predict an average decline in GDP of 1.9% while for the non-euro countries 1.8%. They project that Hungary's GDP will decline by 1.6%, though the Hungarian government thinks that this figure is too optimistic. The prediction for 2010 is even better: a growth of 1.0%. This is what Népszava considers to be "deplorable, miserable, lamentable," take your pick. The fact is that although a recession is never pleasant, one ought not to exaggerate its effects by predicting "lamentable" or "miserable" times. Yes, they will be difficult but not miserable. The 2009 projections, for what they're worth, are worse for Germany and the U.K. (-2.3% and -2.8%).
Why are the economists of the European Union in Brussels so optimistic? First of all, they hope that accelerated government expenditures and growing investments will help the situation. In addition they think that lower inflation rates may stimulate consumption. (Yes, but think back to Econ 101: if you think that prices tomorrow are going to be cheaper than prices today, you'll hold off on your purchases.) According to the explanation attached to the predictions, "the different governments last August reported certain investments that will lessen the drop of GDP by 0.75%." Still the picture is grim, especially when it comes to unemployment. (Don't forget that unemployment is a lagging economic indicator, usually not righting itself until a few quarters after the economy does). They figure the loss of 3.5 million jobs. The predicted average unemployment figures will be 8.7% in the EU as a whole; within the eurozone it will be even higher, 9.25%. Moreover, although there might be some economic recovery in 2010 they expect even higher unemployment figures for that year. Inflation, on the other hand, will moderate. In 2008 the inflation rate in the EU was 3.7% (in the eurozone only 3.3%) while for 2009 they figure 1.2% (in the eurozone 1.0%).
As for Hungary, unemployment will grow by 2.0% this year and by 0.4% next. That means an unemployment rate of 8.8% in 2009 and and 9.1% in 2010. Inflation this year will be 2.8% and next year 2.2%. These figures are higher than what the government predicts. Miserable? Lamentable? Well, it's not ideal, but I would refrain from using such adjectives. They don't do much for the soul, especially when the Hungarian figures, all in all, are not even that bad. They may get worse and then what? Journalists will have to come up with a new set of death spiral adjectives. And, to quote Buffett again, "Let blockheads read what blockheads wrote."