One significant question is which way oil prices will move. Oil prices are already very high, both in anticipation of the war disrupting supplies and also because problems in Venezuela have already reduced supplies. Analysts are not optimistic that oil prices will fall rapidly, as happened after the Gulf War in 1991. If oil prices stay high, it will dampen the global economy.

From the US economy, the recent signs have been mixed. The consensus is still that we can expect a modest US recovery in the second half of the year and that, as a whole, 2003 should be slightly better than 2002. But this is not at all a sure thing. Some well-respected analysts are worried about the US economy, particularly Steve Roach of Morgan Stanley. They fear that high oil prices, high consumer debt, deflation and the lingering hangover of the burst dot-com bubble will result in another US recession. Since Europe and Japan remain weak, a US recession would leave the whole world without any engine of growth.