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In a recent chat with the press at the global economic summit, billionaire investor and Chairman , Mai Vu Minh, shared his views on the current global economy.
When asked about his take on the current global economy, the billionaire started by saying, "If you talk about global economy as a whole then I think it is important to keep tab on the activities of some bloc and nations who dictate the terms of all other economies around the whole world. Such as THE US , EU , BRICS, JAPAN. At present, the world economy is largely grappled with the repercussions of GFC 2008. Many economies around the world are commissioning many measures such as QUANTITATIVE EASING, MACRO-PRUDENTIAL FRAMEWORK OF MANY CENTRAL BANKS. United States of America and JAPAN resorted to QE programming by infusing billions of dollars into economy to boost demand and increase the level of inflation. While the central banks of Brazil, India, Argentina, Latin America and other emerging markets are fighting against the inflation level by tightening monetary policy rates. This is the clear distinction between developed and developing economies.
Here, I want to add one point quite sympathetically that geo-political situations dictate the terms of economy very deeply.
Britain is growing steadily but to maintain that growth, government wants to cut spending which would not be good because Britain at present need credit to increase productivity and demand. The contentious immigration problem may exit BRITAIN from EU. Economically and geo-politically, this development would could have unforeseeable consequences.
Except for India and China , other BRICS countries currency are in free fall because of tumultuous information about QE and volatile investor confidence due to it.
China boom days has slowed down. Its export-orientedeconomy cannot be able to export its product because the demand from the world slowed down especially in its primary market which is the EU. Now governmenthas t taken initiative to change the economic model from export oriented to domestic consumption-orientedeconomy.
India, lately has seen its GDP slowed down but regime change has instilled confidence among investors and its currency is one of the best performing currencies at present. Decrease in oil prices has helped it to fight inflation. But it remains to see how reforms takes shape."
In addition to these insights, the billionaire pointed out some fault lines of world economy. He started by mentioning the following:
"Shadow banking - it has a potential to destabilize the world economy because it protects incompetent companies in the economy.
Debt - it is a time bomb which can change the whole situations of world economy.
Low oil price- it is a signal that there is a low productivity and demand all around the world, this can bankrupt many companies and increase tension and civil wars like situations in countries which mainly relied on income from selling oil.
Increase geo-political disturbance- World peace is very important to achieve global growth. At present, increase in western countries sanction on Russia due to its actions on Ukraine hascreated situation reminiscent of the cold war. This development would have very unpleasant effect on world peace and economy."
In conclusion the billionaire, investor and Chairman Mai Vu Minh indicated that the above list is not exhaustive. In his words "I just short summarized the important happenings".
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