Global Economy At A Crossroads - Economist

KUALA LUMPUR, Dec 3 (Bernama) -- The global economy is at a crossroads and is stuck in a holding pattern, exemplified by the uneasy combination of positive and negative forces, the New York-based The Conference Board said. Its Chief Economist, Dr Bart van Ark said although there were plenty of technological and innovation opportunities, there were lack of business confidence to accelerate investment, productivity growth, and unfulfilled business and policy challenges. "While advanced economies mostly face modest growth, largely depending on consumer strength, housing and labor markets, emerging markets see their growth engines sputter under influence of commodity and energy cycles, reversal in capital flows and pains from rapid historical growth. "But a crossroads is ahead that will determine global growth over the next 10 years," he said when presenting his analysis on the "Global Economic Outlook 2016" at a forum organised by the Asian Institute of Finance, here Thursday. The Conference Board expects the world economy to grow 2.8 per cent in 2016, a slight improvement from its earlier forecast of 2.5 per cent. For the 2016-2020 period, it foresees growth to be 3.1 per cent on average, slightly above the 2016 base projection. The base line scenario was based on modest growth as economies accommodate continued low commodity prices, exchange rate fluctuations and reset of monetary policies, with China avoiding hard landing, while Brazil and Russia modestly recover. "The holding pattern may alter at any time. Companies should not hunker down and wait for better times, while missing the opportunities that arise as new technologies take off. "As interest rates rise, it becomes more important to invest productively," van Ark said, adding that companies should keep a close eye on the opportunities from major multilateral or bilateral trade deals or climate agreements. "The good news is, slowdown in China already happens, it was not a hard landing. Current the situation is more an ongoing adjustment to slower growth than a sudden shock," van Ark said. --BERNAMA