This is part 3 of Mark's thirteen suggestions (in no particular order) of things to look out for in the global economy this year. Part 1 is here, part 2 is here.
9. Keep an eye on oil prices
Despite some signs that the world is less sensitive to oil price hikes than it used to be, the price of oil continues to be a critical variable for global growth.
Last year's IEA World Energy Outlook emphasised what it described as the emergence of a 'new global energy landscape', one shaped by rising oil and gas production in the US and the expansion of non-conventional supply more generally, changing attitudes to nuclear and renewable energy, and the possibility of a major shift in Iraqi oil production.
Combine those factors with continued uncertainties over the global growth outlook, plus the risks of a geo-political shock in the Middle East (traditionally Iran has been the favoured candidate here and with Washington and Tehran still at loggerheads over Iran's nuclear program that theme is still very much alive), and we are left with plenty of scope for both upside and downside surprises in the oil market.
10. Russia (and Australia) and global economic governance
Russia took over the chair of the G20 in December last year and Australia joined the G20's leadership troika at the same time. Russia has now set out its priorities for 2013, and the new presidency faces some significant challenges over the coming year, including the need to deliver on the G20's most important agenda item: strong, sustainable and balanced growth for the world economy.
11. Southeast Asia's recent economic success [fold]
At times over the past decade, Southeast Asia has been in danger of becoming a flyover zone for Australians interested in regional economic dynamism. China has grabbed most of the attention and Japan and Korea have vacuumed up much of the rest.
But 2012 was a particularly good year for both Indonesia and the Philippines. While many emerging markets struggled to live up to past growth achievements, Indonesia looks to have turned in another solid 6% plus growth rate last year, thanks in part to strong investment growth. The Philippines too had a good 2012, with this ASEAN economic resurgence prompting The Economist to suggest that the these two 'IPs' could give lessons to the not-so-dynamic BRICs. Of course, both countries still face significant challenges, so the sustainability of their growth stories will merit attention this year.
12. Australia's phenomenal growth run
In 2012, Australia completed its 21st consecutive year of economic growth. It's been a performance that nearly every other developed economy would envy, although for much of the past year Australians seemed to be waiting for it all to go wrong, with a debate over the passing of the resource boom and some foreign observers predicting that it was all going to end in tears.
It would be deeply unfair to attribute all of Australia's success to good luck; you don't survive consecutive stress tests like the Asian Financial Crisis and its global counterpart on luck alone. But it would be equally foolish to believe luck has played no part in this run. So, will our luck hold in 2013?
13. Finally, don't forget to watch out for surprises
I know it's (more than) a bit trite, but still it seems appropriate to dedicate the thirteenth and final spot to the surprise event/black swan/unknown unknown that might end up dominating the coming year. Past examples include the Global Financial Crisis, the Arab Spring, the Fukushima Disaster, and the H5N1 avian influenza. You never know, though, maybe this year's unexpected 'shock' to the global economy will turn out to be a pleasant surprise. It seems like we're overdue one.
Photo by Flickr user nate2b.