OECD Cuts growth. Another negative.

In case anyone missed an earlier article, do read about Citibank’s prediction of a global recession in 2016. Read here: Getting ready for the next global recession?  In some recent news, the OECD has cut its global growth forecasts, sounding the alarm on stagnating trade. This also meant that the global recession may be coming soon. Who is OECD anyway?  It is the Organization for Economic Cooperation and Development and is a unique forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development. (source: google)  So, the answer is yes, they are a pretty reliable source when they announce something. 

Before everyone panic, they further said that due to China’s stimulus measures as well as other countries, the impact may be mitigated. It said that the global growth forecast for this year would now be at 2.9 percent. (Malaysia’s GDP growth is definitely on the higher end) For the next year, it will be 3.3 percent. A recovery nonetheless compared to 2015. OECD however foresees that growth would pick up in 2017, up to 3.6 percent growth. (By the way, all the forecasts for Malaysian GDP for 2015, 2016 and even 2017 easily exceeds all these world average). I still do not understand why Ringgit is still at his current low value. Read here: Impossible, how can Ringgit be most attractive?

Other forecasts by OECD? China’s growth, after the stimulus should be 6.8 percent for 2015 and 6.5 percent for 2016. Brazil will have a contraction of 3.1 percent this year and 1.2 percent contraction in 2016. (This was also the country that some investors believe is on the same level as Malaysia for currency strength). UNITED STATES is said to be “relatively solid’ at 2.4 percent for 2015 and 2.6 percent for 2016. Seriously, the US better do well and I will pray for them to do well. Read here:    I hate it when US economy has bad news Eurozone will strengthen and the forecast is 1.5 percent for 2015 and 1.8 percent for 2016. Read carefully and understand what’s really happening in the world today. Still believe Ringgit is unlikely to recover from its current ‘bad performance?’ Remember to hedge externally then. My thoughts remain the same for now, I will just scout for opportunities and take them if any good ones come along. 

written on 12 Nov 2015

Next suggested article: Is it good value? Good question, how to answer?


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