Economists expect global investors to pivot towards Asia
30 Sep 2021
Global investors are expected to move into Asia as the worldwide economic outlook is anticipated to be uncertain with fractured growth in 2022 and 2023, said economists.
Juwai IQI chief economist Shan Saeed believes that the global economy is going back to the 1970s stagflation or recession-inflation era in which the inflation rate is high, economic growth is slow, and unemployment remains steadily high.
“Because of the Covid-19 pandemic, about 100 to 300 million people had dropped into the poverty level, while 20 to 30 million people had lost their jobs globally.
“So, we are in great economic fragility in 2022 and 2023. The global economic recovery is expected to have fractured growth with financial fragilities and bazooka towards the financial market,” he told Bernama.
He highlighted that usually during the stagflation period, investors historically took a position in real estate and commodities.
“Malaysia will tend to benefit due to higher oil and commodities prices expected next year.
“Juwai IQI expects the gross domestic product to grow between 4 and 5 per cent next year,” he said.
Furthermore, he said investment opportunities also remained seen in the liquefied natural gas (LNG), e-commerce, technology and infrastructure sectors.
He also noted that infrastructure is the only winning investment strategy that can spur growth globally.
“All top players are moving into Asean and Malaysia remains a growth story due to macroeconomic stability and economic confidence at the macro level.
“The total value of the Belt and Road Initiative (BRI) infrastructure projects at the current price is tantamount to US$4.5 trillion (RM18.8 trillion) and Malaysia is an important player in BRI equation due to her strategic geographical position,” he said.
Meanwhile, Centennial Asia Advisors Pte Ltd, chief executive officer Manu Bhaskaran said Southeast Asia is in a good place right now as long-term trends remained in its favour.
He said this in a panel session at the 2021 Asia Economic and Entrepreneurship Summit today.
The summit, themed “Building Sustainable Infrastructure for Economic Growth”, was organised by KSI Strategic Institute for Asia Pacific and other partners.
“There is a reconfiguration of production supply chains which would largely benefit countries in the region. Even with Covid-19, we see foreign direct investment (FDI) inflows coming in.
“It has also been seen in the last few years that the whole supply side had reformed in many countries in Asean, which would improve the region’s effectiveness with FDI,” he said.
He noted that new changes and improvement in the ease of doing business, and cutting through a lot of red tape, would contribute to more investment and growth.