One of the key global trends likely to impact on the world economy 2006 is global liquidity, due to the oil exporters’ collective surpluses, said to be around US$400 billion; the rapid accumulation and growth of foreign reserves of the key Asian countries, particularly the great China circle; and the relatively low cost of funds in most in most parts of the financial world. They will be the dominant forces influencing future oil prices, interest rate movements, the rate of slowing down of the US economy, the value of US dollars and the matters.
The impact of China’s growth is likely to be felt more than that of India, as China started its growth, has wider and more areas and sectors for project development, and is culturally closer to Asians.
Tan Kok Leong
Principal
TKL Consulting
Monday, January 2, 2006