A Long-Term Global Perspective From Olga Bitel 

 

June 21, 2016

 

While fast-changing investor sentiment relying on the latest conflicting pieces of news has continued to drive the short-term market volatility that has rattled the global equity markets thus far in 2016, many investors are trying to look beyond the short-term noise to identify the long-term drivers of global growth and investment returns. Over the next decade, what will the impact of secular stagnation be on global growth? Will emerging or developed economies experience stronger economic growth? What is the chance of a hard landing in China? How effective will central-bank actions be over the next five years? Below, William Blair economist Olga Bitel weighs in.


Global growth is decelerating broadly. How significant will the impact of secular stagnation be on global growth over the next decade? What are the main drivers of the slower economic growth?


Economic growth in emerging economies has outpaced growth in developed economies in the last decade, although the gap has been narrowing. Will this trend continue over the next 10 years, or will developed economies become the new growth engine? And does this really matter for investment returns?


The outlook for China is key to the global growth outlook, and the potential risks associated with China’s transition from an investment-led economy to a consumer-driven one continue to raise concerns among investors. What is the chance of a hard landing in China? And how likely is a financial crisis given the acceleration in the accumulation of debt in the financial system?


Central banks seem to have been playing an increasingly important role in the global economy since the global financial crisis. Will they continue to be as important in the future? How effective will central-bank actions be over the next five years?

 

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