Invest
Global growth remains fragile
Global growth is bottoming, with projected recovery from the world’s developed economies remaining uncertain, according to new data.
Global growth remains fragile
Global growth is bottoming, with projected recovery from the world’s developed economies remaining uncertain, according to new data.
According to data released by the International Monetary Fund (IMF), manufacturing activities is showing signs of tentative stabilisation, as volatility diminishes, and policymakers ramping up efforts, although the future remains unclear.
“The projected recovery continues to be largely driven by improved prospects in previously underperforming emerging market economies (e.g. Brazil, India, Mexico, Russia, Turkey) where growth is expected to increase by about one percentage point or more relative to last year,” the IMF wrote.
“While a more favourable international environment is expected to support growth in the euro area, growth in G20 advanced economies is projected to remain subdued this year, in part amid a phasing out of fiscal stimulus and lower business investment in the US and reduced private demand following a consumption tax hike in Japan.”
Prospects for stronger and more balanced growth also remain elusive, with growth rates too low to materially raise living standards and strengthen prospects for disadvantaged groups.
“This adds to existing challenges in many economies of creating sufficient job opportunities for the young or lower skilled, not least amid changing demands for labour from technological change,” the IMF wrote.
“Alongside, while current account excess surpluses and deficits have narrowed somewhat, stock imbalances have continued to grow and low interest rates have prompted investors to move into riskier and less liquid securities, contributing to stretched asset valuations and a continued build-up of vulnerabilities.”
The IMF called for governments to support global growth by not withdrawing policy support too quickly, as fiscal stimulus is likely to be needed to play its part in the global turnaround.
“Fiscal policy must balance the needs for lifting potential growth, ensuring debt sustainability and protecting vulnerable groups,” the IMF wrote.
“Where fiscal space allows, policymakers can take advantage of low rates for productivity-enhancing investment to lift potential growth.”
About the author
About the author
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
Stock market
Why Afterpay and Zip investors should buy Tuesday and sell Friday
Investors in speculative stocks, including Afterpay and Zip, can theoretically purchase more shares at a reduced price on a Tuesday, before seeing the value increase on a Friday, new research has reve...Read more
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
Stock market
Why Afterpay and Zip investors should buy Tuesday and sell Friday
Investors in speculative stocks, including Afterpay and Zip, can theoretically purchase more shares at a reduced price on a Tuesday, before seeing the value increase on a Friday, new research has reve...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
