L-shaped recovery
Australia is one of the best-positioned developed economies ahead expectations of a very slow recovery for the global economy, according to Goldman Sachs JBWere’s chief investment officer Andrew Cooke.
According to Cooke, the global economy is currently in the midst of a moderation cycle and an L-shaped recovery.
“This is where you have a fall then a very slow, gradual recovery, so it’s not a traditional V-shaped. One of the reasons for that is one of the reflating mechanisms or ways the economy recovers is people start lending money,” he said.
“Banks, because their balance sheets have been impaired by the losses, are less willing to lend money and will be for a while.”
Cooke said he expected mounting inflationary pressure to challenge emerging market growth.
“Currently, along with a slowing global economy we have commodity price pressures, which is very unusual,” he said.
“It is impacting emerging markets more than developed markets because they have higher commodity intensity. But this is the first sign of a tax on the emerging markets … but one they can manage quite well.”
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
