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‘World in the Grip of an Unwarranted
Economic Anxiety’
The last one month has seen a sudden
change in the gloom and doom which
engulfed the globe in the beginning
of the year. Stock markets, generally
treated as a sentiment indicator, world
over have seen a recovery of sorts —
oil has breached the $40 a barrel level
(Read: Crude Oil Jumps 57%: The Rally
That Few Saw Coming) and there are
fewer murmurs around China and
the bubble it was growing into. Local
sentiment too has been buoyed by
the change of heart, few have answers
to, and suspicion grows around the
sustenance of the swing.
We interacted with Dr. Marie Owens
Thomsen, Chief Economist, Indosuez
Wealth Management, the global
wealth management brand of Crédit
Agricole group, for some of her thoughts
around the same, besides her views
around comparatively low oil prices being
an impetus towards change and reforms
in the GCC.
Dr. Thomsen underlines what she refers
to as the ‘Economic Anxiety’ that has
gripped the world, which makes a case
for disbelief around any greenshoots or
positivity. To give an idea, 2008 had nearly
90 countries in what may be referred to as
recession – the comparable figure today
is 22. The world GDP stands at nearly 3%
against the 30-year average of 3.5%. She
gives a perspective around this anxiety
being an offshoot of a high degree of
misconception prevailing around:
Majority linking deflation with
depression. Differing with this, she
highlights the world is not facing
deflationary recession but as deflationary
expansion.
Importance of energy to the
world economy. Oil-dependent
nations contribution to world GDP is
approximately 17%, roughly the same
as China. Besides, it must be stressed
that a global recession has never
been provoked by low oil prices. In an
April 2016 | www.wealth-monitor.com
environment where western monetary
and fiscal policies are la