Gary Dugan, CEO of Purple Asset Management, shares thoughts on how the global economy is faring, including the role of governments, central banks, interest rates and inflation.
It is clear that the global economy is still experiencing some challenges, and with a decline in the working population in most countries, the effects on GDP and productivity growth are notable. Consequently aggregate growth globally looks set to reach between 3% and 3.5% in 2020.
In helping ensure that this growth is achieved, central banks are fully aware of the role that they will need to play. Interest rate cuts and quantitative easing (in short – printing money) will be used to help underpin good global growth. Inflation is also unlikely to rise, which will have a positive impact on growth rates too.
It’s important to note that the global economy is in something of a vulnerable position, with a declining population, and reduced consumer spending. Added to this is the fact that emerging countries, which have significantly driven global growth in recent times, are also somewhat in decline, especially in China.
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Julian Broom, Chief Investment Officer