Fundacion MAPFRE’s Economic and Industry Outlook Study has predicted a fall in the contribution to global growth from developed markets, while emerging markets are expected to provide a greater contribution to the economy during 2019.
The research states that the global economy could grow by 3.3 per cent this year, three-tenths less than what was expected to be recorded for 2018, as the year will be marked by a slowdown in the global economy, an adjustment which will nevertheless be smooth and orderly.
MAPFRE Middlesea and MAPFRE MSV Life in collaboration with the Maltese-Spanish Chamber of Commerce held a Business Breakfast to discuss this recently published study. The event was opened by Her Excellency The Ambassador of Spain and the keynote speaker was Gonzalo de Cadenas-Santiago, Director of Economic and Financial Research at MAPFRE Economic Research.
Among the symptoms of slowdown detected by the report, the reduction in the temporary premium in the yield curves of developed countries, challenges faced by the financial accounts and balance sheets of corporate sector actors, high levels of public sector indebtedness in the developed world, excessively priced assets or distortions in global economic governance all stand out.
“The cyclical slowdown is a fact,” explained De Cadenas-Santiago; “the development of global economic indicators, the stock market correction experienced since the middle of the year, the fall in corporate profits and -in particular- the global correction of trade flows and Foreign Direct Investment account for this. They are all symptoms of change, already palpable in trade, investment and global expectations.”
MAPFRE’s Economic Research states that despite this slowdown, we are facing a smooth international cycle of change that can be managed under current economic policy and which ultimately facilitates correcting the imbalances generated by the global pro-cyclical economic policy of the past five years.
This however, does not come without risks. The greatest risk identified by the report is related to the pressure that institutions may be subject to for a political or market agenda.
In Malta, the expectations are that the economy will continue to experience strong levels of growth. The current economic growth being experienced in Malta may also present more opportunities for investment. As highlighted during the Business Breakfast, organisational financial growth is not likely to be long-term and therefore one must look at the prospects of current investments.