It's been a tumultuous 12 months for all in the business community - and some indications are that things could get worse. With help from IHS Global Insight, Chris Brook-Carter looks to the year ahead and cautions that there are more dark clouds on the economic horizon.

You just couldn't make it up could you? Bernard Madoff's hedge fund attracted investment funds from some pretty respected sources but it was all a bit, as we like to say in the UK, dodgy. In fact, it was a gigantic fraud, all smoke and mirrors. And his surname is pronounced as 'made off'. You couldn't make it up.

It's another blow to our confidence in the Western economic blueprint - something else for the negatives column as far as the economic outlook is concerned. On the plus side, at least interest rates are coming down at an unprecedented rate. If the banks do start lending around the world (notwithstanding the above), then a slight improvement, coupled to cheap capital might bring a relatively sharp upturn. And there will be an element of pent-up demand building. And inflation is low.

But confidence will obviously be key and if you listen to the financial commentators, that's still some way off. Are there many more nasty surprises out there?

Christmas is not only a time of cheer and festivities but, in the media, it's a time of lists: best of lists, worst of lists and in particular those annual favourites, the New Year predictions.

We'll run our own predictions for the food industry come January in our annual joint-venture management briefing with research group Euromonitor. See here for how we fared on our crystal ball gazing at the beginning of 2008.

Of course, putting your professional reputation on the line like this is a risky business. But one list of predictions that had a good degree of success in being correct last year was from IHS Global Insight. Indeed, eight of the top ten IHS Global Insight predictions for 2008 were pretty much right on the mark.

The financial analyst group has just published its top ten predictions for the economy for 2009. It's not for the fainthearted but for all of us with a business stake in how 2009 fares it makes for compelling reading.

Amongst the soothsaying by IHS Global insight's chief economist Nariman Behravesh is the belief that the US recession will be one of the deepest, if not the deepest, in the postwar period.

Based on the December IHS Global Insight baseline forecast for the US economy, it will be the fourth deepest in the postwar period (the 1957 recession was the deepest, followed by the contractions of 1973 - 75 and 1981- 82).

Nevertheless, Behravesh says: "Given the very negative tone of the incoming data (including the 533,000 drop in November payrolls), the recession could well be the worst in the post-war period.

"At the same time, the large back-to-back declines in real GDP predicted for the fourth quarter of 2008 and the first quarter of 2009 (down 5.0% and 3.8%, respectively) are the worst since the 1982 recession, and may easily be the worst in more than six decades."

Overall, Global Insights expects the US economy to shrink at least 1.8% in 2009.

But don't think the bad news will be confined to the US. Behravesh also believes that the slowdown will be the worst in Europe for over two decades and the worst in Japan since 1998.

"For Europe, this will be the biggest economic contraction since the early 1990s - and the first for the Eurozone. For Japan, it will be the nastiest recession since the depths of the Asian crisis in 1998, when its economy contracted 2.1%," the report says.

In 2009, IHS Global Insight expects respective GDP declines of 1.0%, 1.3%, and 2.0% for the Eurozone, Japan, and the UK.

Perhaps though most worryingly for many food and drinks groups, Global Insights believes that growth in the emerging markets will fall markedly too next year.

There has been a school of thought I have heard a number of times over the last 18 months that many of the emerging markets have "de-coupled" themselves from the West economically. Therefore, the idea went, a slowdown in Europe and the US could be counter-balanced by investing for growth in the BRIC (Brazil, Russia, India and China) economies in particular.

But Global Insights argues that there are at least three transmission mechanisms to the emerging world: 1) the collapse in commodity prices, which is already hurting the oil- and commodity-exporting countries (eg Russia, Iran, Venezuela, and South Africa); 2) the drying-up of capital flows, which is harming economies with large current-account deficits (eg many emerging markets in Europe, some of which have already sought help from the IMF); and 3) the precipitous decline in world trade, which will damage growth prospects for the major exporting countries (almost all of which are in Asia).

"As a result, GDP growth in most emerging markets during 2009 will be roughly half the rate of 2007 and early 2008. For example, the Chinese economy, which enjoyed 11.9% growth in 2007, is likely to expand only 6.9% in 2009," Behravesh says.

Some of the other predictions are less gloomy, and include the federal reserve and other central banks cutting rates; more fiscal stimulus to come from governments; commodity prices remaining depressed and deflationary fears replacing worries about inflation.
Food and drinks groups, there is no doubt, still remain better placed than most to weather this storm - though not without suffering some of the pain seen elsewhere, as has been demonstrated by some of the job cuts announced in the last few weeks in the sector.

But, given the unprecedented nature of this current crisis, trying to make accurate predictions even for the first few weeks of 2009 let alone the 12 months seems a tall order, so I'll leave that to the economists. I might start a hedge-fund instead. Anyone want to buy in?