10th April 2017
Olivier Aeschlimann, Senior Financial Analyst and Fund Manager
Is the world economy about to leave its lethargy following the 2008 crisis? Admittedly numerous question marks remain, such as the huge (and still growing) debt of China, the structural weaknesses of the Eurozone or the increased protectionism of the Trump administration. However all these anxiety-provoking factors are not any longer able to hide the real improvement of the worldwide economy. It is now time for reflation and a cyclical recovery. Prices for raw material are rising, which results in an improvement for producing countries, such as Brazil and Russia for example. The purchasing managers’ indices (PMI) are solidly anchored in expansionary territory and this in all geographical regions. Monetary policies change as well. The Fed increased its rates last March and should do so two (if not three) times more until the end of 2017. It could well be time for proponents of a secular stagnation to enter a depression!