subscribe to our newsletter sign up

'Global upturn' set to push markets into growth

The recent upturn in markets looks to be more than a “cyclical bounce” and likely marks the beginning of a transition to a period of better growth, in a stretch that will likely last into 2018. 

In a note to investors, Principal Global Investors chief global economist Bob Baur said there had been a cyclical economic rebound from the “quagmire” of post-GFC markets, noting that “no cycle lasts forever”.

“A global upturn that has synchronised around the world became firmly established last summer and was finally accepted by the investment consensus after the US election. That recovery is ongoing, improving and likely to last well in 2018,” he said.

“What is now happening is likely much more than just a cyclical bounce from an economically ugly time. It’s probable that the adjustment costs of doubling the world’s labor force are behind us, so the global economy is likely in a long transition to an old normal.”

Mr Baur said economic recovery has two phases, the first being a return to inflation and the second being an improvement in growth.

“Starting early last year, the global economy began to rebound from several years of deflation and a near-recession in 2015,” he said.

“As investment and wages pick up in the United States, core inflation improves in Europe and Japan and growth in China stays the course, this recovery should move to act II: sustainable, above-trend growth.”

Additionally, central banks in the US, Europe, England and Japan are also “feeling better about their respective economies”, Mr Baur said.

'Global upturn' set to push markets into growth
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anonymous - Why does this get all the media attention when in reality it affects very few and the charges are minimal? How about reporting on all the ISA TPD.......
Anonymous - This got to be the smartest comment this century ?!....
nan - So what do you do if you are being ripped of and then can't afford the body corporate fees....
MarkL - The banks may not charge dead people any more ........... but they won't charge them any less either!....