At the moment many countries economies seem to be very active. With big changes going on in the world, it can have an impact on many economies. It would be really good if we could predict what was going to happen so that we could plan accordingly.
Sadly, if there was a way of making an accurate prediction of what a countries economy might do in the future then there would be some very rich people out there. They would be able to take advantage of economic changes and cash in on it. This is not possible though and no one can do this. However, there are things that you can do to help you make a few predictions.
If you take a look at the government’s economic policy then this should give you some indicators. They might want to reduce unemployment, for example or perhaps to keep inflation within a certain rate. This will have an effect on interest rates and quantitative easing which may have an effect on your personal financial situation. However, even if they have an economic aim, it does not mean that they will achieve it. They will only be able to control these things in a small way. They will usually use interest rates and quantitative easing to have an influence, but it is not always that effective. There are many other things which will have an effect as well such as world economics, business success and other world events. These are things which are much harder to predict and that is why it is difficult to know exactly what will happen. It is also very dependent on your own personal situation as different economic situations favour different people depending on their personal circumstances.
It is therefore really wise to be open minded instead. It can be good to hope for the best and prepare for the worst. This means that you need to assume that any investments you make will not have a huge return and so make sure that you have lots of money invested just in case. Assume that interest rates will work against you so if you have debts assume they will go up and if you have savings assume they will go down and make sure that you will be able to cope in that situation. For example, if you are considering a loan, calculate if you can afford the repayments if the interest rates go up significantly. If you have savings or investments and want the interest to live off assume that the return will be low so that you can guarantee that you will have enough. It is always good to be pessimistic and then if things do go well, you will be able to really relax and prosper and keep some more money aside just in case things do not always do well.