Pandemic savings seen boosting global economies

MANILA, Philippines — Global economies are poised to see more growth this year as consumers gradually dip into their pandemic savings by simply spending and, later, diversifying their assets, according to investment experts.

Shaun Jamieson, product strategist at international investment company BlackRock, said during AXA Philippines’ recent investment forum that yields were improving, with global fixed income delivering more than 4 percent in yield.

This “gives us a plethora of opportunities as investors,” Jamieson said.

“Multi-asset strategies have the potential to help investors capture diversified sources of upside and yields with a balanced risk framework,” he added. “Income looks compelling after the historic move up in yields.”

This came after the International Monetary Fund (IMF) predicted global economic growth to stay at 3.2 percent this year until next year despite “uneven growth,” mostly due to consistent consumer spending.

Locally, the IMF reverted to its original 6-percent growth forecast for the Philippines this year from 6.2 percent in April due to weaker household consumption and investments.

READ: IMFreverts to original 6% growth forecast for PH

Despite this, experts are seeing more emerging opportunities for investors, including artificial intelligence (AI) and real estate investment trusts (REITs).

Invesco global market strategist David Chao pointed out that AI was “no longer a distant future; it’s a present reality reshaping the world around us and revolutionizing the way we approach investments and opportunities.

Key growth drivers

In the United States, for example, index heavyweights that have long been using AI continue to dominate the stock market, Chao said.

At the same time, Cohen and Steers senior vice president William Leung expected new opportunities in REIT investments due to the projected halt in interest rate hikes.

“Real estate, which may be often seen as a traditional sector, now includes alternative segments with strong fundamentals,” Leung said.

READ: Data center boom cues PH as tech hub

“Key growth drivers are next-generation sectors like data centers, cell towers, and senior housing,“ he added, highlighting that these “alternative sectors” helped boost the REIT market to $2 trillion last year from $445 billion two decades ago.

The IMF expects the Philippine economy to grow by 6.2 percent next year on strong consumer demand, higher public and private investments, and export recovery.

Inflation is also expected to decline to 3.4 percent this year from the IMF’s previous projection of 3.6 percent.