Analysts at Natixis, point out that global growth rates could fall dramatically and could push down cyclical commodity prices.
Key Quotes:
“Despite the stimulatory economic policies, the world is heading towards a drastic fall in its growth as population ageing is not being counterbalanced by an increase in productivity gains.”
“On the contrary in fact, despite the investment in new technologies and the increase in the population’s level of education, labour productivity is slowing down. The drastic and rapid slowdown in global growth may trigger a debt crisis by worsening borrower solvency, and may trigger a decline in asset prices and commodity prices if it is unexpected.”
“We believe global growth will quite rapidly return towards the level of global potential growth, which is low currently (2.5% per year) as a result of population ageing and falling productivity gains.”
“A marked and rapid decline in global growth may be dangerous: – It makes it more difficult to shoulder the high debt level;- It may trigger a fall in asset prices. But it may also push down cyclical commodity prices.”
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