Raised global growth forecasts for this year
The International Monetary Fund and the Organisation for Economic Co- operation and Development have raised their global growth forecasts for this year due to strong trade, consumer spending, and investment in many major economies.
However, the outlook is not without risk.
Respondents to the survey, which was conducted December 1 to 15, showed companies’ biggest concern was a sudden correction in asset prices.
US stocks have repeatedly set record highs this year and stock markets in most other countries have rallied strongly due to expectations for faster growth.
Some analysts have expressed concerns that stock prices may be overheating.
Companies f rom the transportation, healthcare, energy and finance sectors also expressed concern about a correction in asset prices, the Thomson Reuters/ INSEAD survey showed.
Industries subject to frequent mergers and acquisitions, such as technology, metals, natural resources and healthcare, identified increased regulatory scrutiny of cross- border transactions as a risk, the survey showed.
Many companies have concerns about protectionism, which can hurt not only exports but also become a barrier to making acquisitions overseas.
Of companies surveyed, nine respondents identified political instability and geopolitical risks as their biggest concerns, because events on one side of the globe, such as Britain’s negotiations to leave the European Union, can have consequences elsewhere.
“The impact of ‘Brexit’ affected British demand for tourism aboard,” said Supitcha Fooanant, senior investor relations manager at Minor International PCL, Thailand’s leading hotel and restaurant operator.
“We saw a decline in British tourists in our hotel portfolio.
Fortunately, our successful diversification strategy enables us to maintain resiliency and consistently achieve robust results.” — Reuters