Global Perspective

09 Dec 2011

‘The investment environment is likely to remain uncertain into 2012 against a backdrop of weak global economic growth at best, recession at worst. The corporate sector will only be able to support the upturn in 2012 if politicians quickly remove the layers of uncertainty they have created’, state Standard Life Investments.

‘Household sectors are rebuilding their wealth through a higher savings ratio, while governments are having to rein in historically high borrowing requirements. Furthermore, the financial sectors are still suffering from the lingering effects of the crisis, with the questionable value of some of the assets sitting on their balance sheets.

In contrast, the position of the corporate sector is not a concern, with balance sheets generally in good shape. The problem is in knowing exactly whether and when these healthy corporate balance sheets will be a force for economic good. A global recession in 2011-12 is avoidable, but only as long as politicians quickly remove multiple layers of uncertainty which are restraining investment, spending and hiring intentions.

The good news is that any recession into 2012 would likely be saucer-shaped, as large companies do not need to cut costs severely.’

To read the full article, please click here……

Written by Sam Gulley | Financial Planning Consultant

Sam joined Mantle Financial Planning in 2009 having previously been with Alexander Forbes and HSBC bank. Read more >>

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