The New Year did not bring better economic news. Most sobering was the International Monetary Fund (IMF) downgrade to its 2009 global economic growth forecast. The IMF now expects global growth to be 0.5% in 2009, the slowest annual growth rate since World War II.
Global growth is slowing given the global financial crisis and falls in global output and trade. The prognosis for US, Europe and Japan was particularly sobering with developing economies set to be the main driver of growth in 2009.
Quarterly Outlook draws on the views and opinions of Australia’s leading funds management organisations, as well as the views of the Lonsec Investment Committee. Quarterly Outlook presents tactical positions (overweight, underweight and neutral) towards shares, property, fixed interest and cash, based on these combined inputs.
Results from the December quarter were an apt summary of the grim year investors had in 2008.
Over the three month period, at least 19 countries declared recession, leading to unprecedented levels of volatility in equity markets. The Australian share market recorded its fifth consecutive negative quarter.
The declining global growth led to commodities and commodity stocks being sold off heavily, thus having flow-on effect on the Australian dollar, which declined significantly.
An overview of the latest figures in the American economy provided by Chris Caton.
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In a world where “saving” is a dirty word and “credit” is a match made in heaven, we are seeing some of the toughest financial times ahead of us.
I believe we have 12 to 24 months of continued credit issues and volatility in the markets ahead of us. The reason for this is the continued push to create more financial stimulus. Governments and Central Banks have gone on record to state “we will print money WITHOUT Limitation”. With this continued money printing, we continue down the same path that got us into this mess in the first place.
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BT Chief Economist Chris Caton talks unemployment, interest rates and the Aussie dollar in 2009.
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BT Investment Management’s Scott Osborne shares his lessons from 2008 and what he’s watching this year.
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