Skip to content
Alpha Edge Investing

Alpha Edge Investing

"Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand better than others, they have an edge.” – George Soros

  • Home
  • Earnings Updates/ Corporate Actions
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trust/ ETF
  • News
  • My Opinions/ Views
  • Others
  • About Me
  • Contact
  • Disclaimer
  • Community and Support Forums
  • Toggle search form

Edge: Global economy in ‘fragile state’ – Temasek

Posted on July 12, 2022July 12, 2022 By alanyeo No Comments on Edge: Global economy in ‘fragile state’ – Temasek

Jovi Ho & Lim Hui Jie

The global economy is in a fragile state, and economies — including Singapore’s — might slow down, warns Temasek. “Ongoing geopolitical uncertainties, rising inflation, surging commodity prices and severe supply chain bottlenecks have uncovered further fault lines in the global marketplace.”

Against the backdrop of an increasingly fractious geopolitical environment and a looming climate crisis, economies are now more vulnerable, adds Temasek, with key developed markets potentially facing a risk of recession.

Taking into account the reasonable likelihood of a recession in developed markets over the next year, Rohit Sipahimalani, Temasek’s chief investment officer, says the company will maintain a cautious investment stance.

China may face challenges achieving its 2022 GDP growth target of 5.5%, given weakness in its growth so far this year, says Temasek. Policies are likely to be supportive, to buffer headwinds from soft property activity and pandemic restrictions, they add.

In the US, the labour market remains tight and inflationary pressures continue to be strong, says Temasek. “Against a backdrop of tightening financial conditions, negative fiscal impulse and elevated geopolitical uncertainty, growth is likely to slow meaningfully and below trend, raising the risks of a recession into 2023. A recession, if it occurs, will likely be relatively mild as healthy private sector balance sheets will provide a buffer.”

In Europe, Temasek expects a meaningful slowdown in 2H2022 due to the impact of the Russia-Ukraine conflict on consumer income and business confidence. “With inflationary pressures exacerbated by rising energy costs, the European Central Bank is likely to normalise monetary policy and exit negative rates by the end of this quarter. Increases in interest rates in a slowing growth environment could lead to a recession, which would be aggravated if a full Russian gas cut off occurs.”

According to Temasek, the pace of expansion for the Singapore economy may be slower than earlier projected. “Even though pandemic reopening will facilitate a stronger recovery in domestically-oriented and travel-related sectors, growth prospects in Singapore’s externally-oriented economy will be weighed down by the global backdrop and a risk of recession in developed markets.

Photo: Bloomberg

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Telegram (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
News Tags:Global Economics, Global Macro, Global Markets, Temasek

Post navigation

Previous Post: Edge: Temasek portfolio grows 5.8% to $403 bil, group profit moderates from FY2021 surge
Next Post: DBS: June shipment broadly in line with the market expectations – Sunny Optical Technology Group

Related Posts

Are We Near the End of the Current Bear Market? My Opinions/ Views
IMF warns it will cut global growth forecast again with ‘darkened’ outlook News
Temasek gets fearful when it’s time to be greedy News
Downward spiral looms for 3QFY2022 – PhillipCapital Research - Equities
Edge: Temasek portfolio grows 5.8% to $403 bil, group profit moderates from FY2021 surge News
Time to Overweight Global Equities! My Opinions/ Views
Bloomberg: Wall Street Says a Recession Is Coming. Consumers Say It’s Already Here News
Bloomberg: Many Major Economies to Hit Recession in Next Year, Nomura Says News
JPM: Mid-Year Investment Outlook 2022 – Assessing recession risk Research - Equities
OIR: Global Industrials – Headwinds to persist for now Research - Equities
DBS: CIO Insights 3Q22 – Rising Above Inflation Research - Equities
Edge: Look to health, tech, infrastructure and clean energy as volatility remains: Pictet News

Leave a Reply

You must be logged in to post a comment.

Login

Log In
Register Lost Password
Get new posts by email
Chat on WhatsApp
  • Earnings Updates/ Corporate Actions
  • My Opinions/ Views
  • News
  • Others
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trusts/ ETF

Copyright © 2023 Alpha Edge Investing.

Powered by PressBook Grid Blogs theme