It's a numbers game

I have yet to meet a forecaster who is prepared to admit that he got it wrong. Even the very best analysts can be wrong footed. The respected J P Morgan analyst Jamie Baker spoke of US airlines turning in a 2009 profit of $9.2bn back in January this year. Merrill Lynch were somewhat more pessimistic in calling a profit of a mere $2bn. Nine months later and Wall Street should be blushing a rich red. IATA is fond of reminding us of the doom and gloom in the industry, and is now talking of a global industry loss of $11bn for the year. Yes, it's easy to be wise after the event, but isn't it just a little worrying that our best economists failed to notice that the world was about to fall off the edge of a cliff?

Earlier this month UNCTAD (United Nations Conference on Trade and Development) predicted that global Gross Domestic Product would decline by 2.5% in 2009. To put that into perspective, that's another way of saying that the world will have lost economic activity equivalent to the size of India. Ouch.