Economic Outlook March 2021

The economic outlook for the world and its biggest economy, USA, is very strong. Many economists predict Real GDP Growth in the USA to be around 6%, with major investment banks Goldman Sachs and Morgan Stanley, predicting growth in excess of 7%. Most major global economic organisations, including the IMF, World Bank, and OECD, are predicting global economic growth to be around 5.6% for 2021. – It is worth noting that this economic growth is expected to be mixed as different countries struggle at different levels with the resolution of the pandemic.

With strong economic growth outlook, albeit from a low base that was the 2020 recession, financial markets are increasingly looking like justifying their high valuation levels. That said, the US sharemarket is still significantly more expensive than the rest of the world and does present a high valuation risk, and therefore we maintain low long term expected return potential.

Read  Michael Furey’s Economic Outlook March 2021 here