The Economist: Worldwide GDP and inflation forecasts for 2012

We’re by no means out of the woods yet, and the biggest danger for 2012 (the biggest one we know about, at least) remains the possible financial contagion from a deepening crisis in the Eurozone.

But there’s a growing consensus that the economies of many nations, including the U.S., should be decent in 2012.

From The Economist‘s poll of forecasters:

THE outlook for GDP growth in the euro area has deteriorated sharply since September, when the sovereign-debt crisis escalated. Then our poll of forecasters thought the economy would grow by a mere 1%. They are now predicting the 17-nation economy will shrink by 0.5% this year. [. . .] Our pollsters are more optimistic about growth in America this year. Indicators show the economy was picking up and employment rising towards the end of last year.

Here’s what the forecasters foresee for the Eurozone and a few other large national economies:

Frankly, I think there are increasingly strong arguments for a target inflation rate of 3% rather than the 2% predicted here, but the U.S. economy still has so much slack in it and the political environment would make it tough to implement policies that might boost inflation further.