The World in 2021
Doha Bank hosted the webinar “2021 economic outlook” on 7th December 2020. The speakers spoke on the economic outlook and opportunities for the year ahead and look at major themes both globally and in the region. Dr. R. Seetharaman, CEO of Doha Bank was the Moderator of the event. The speakers at the event include Fahd Iqbal, Head of ME Research, Credit Suisse AG and Brahim Razgallah, Head of EEMA Economics, Barclays Bank.
Dr. R. Seetharaman gave insight on Global economies. He said “According to IMF October 2020, Global growth is projected at 5.2 percent in 2021. The Advanced economies growth is projected to strengthen to 3.9 percent and emerging and developing economies are expected to recover by 6 percent in 2021.Prospects for China are much stronger than for most other countries in this group. Oil extended gains toward $50 a barrel after OPEC+ reached a compromise deal to gradually taper production cuts this month. 2020 has been a historic year for gold and silver as unprecedented stimulus measures around the world were unleashed on financial markets. The dollar index is at 90 levels and is expected to fall further as fed continues its monetary easing. Crucial negotiations to secure a post-Brexit trade deal between the UK and the EU expected to happen. Global markets have surged in recent times after fall in April 2020 due to hopes of vaccine, cheering Joe Biden’s winning in US election.”
Dr. R. Seetharaman gave insight on Regional economies. He said “Qatar economy expected to contract by 4.5% in 2020 and recover by 2.5% in 2021. Qatar and other regional economies had witnessed economic reforms to recover from the COVID-19 as oil fell this year. Qatar central came with various procedures to combat the risk of coronavirus COVID-19 pandemic. This includes the emergency procedures, Loans and liabilities of sectors affected due to procedures taken to combat the spread of COVID-19, Guarantees for local banks and National Guarantee Program to support the private sector. In May 2020, the Public – private partnership law was introduced. The Private sector is expected to leverage from this new law. In October 2020, Qatar has allowed foreigners to own property. Qatar stock market has surged by close to 2 % YTD and has crossed 10k levels.”
Mr. Fahd Iqbal, Head of ME Research, Credit Suisse AG spoke on “Investment Outlook 2021, living forward”. He gave insight on the fastest correction and the quickest equity rally this year, highlighted that households are savings more due to COVID-19. He expect recovery in global economic growth in 2021.The impact of pandemic on US unemployment and General Government Debt was explained. Increase in debt to GDP is persistent due to low interest rate scenario. The Fed wants inflation to overshoot, reduce cash holdings and favor equities. Emerging economies have strong catalyst for growth. The importance of ESG investing in equities was mentioned, pivotal growth in investing responsibly. Acceleration of ESG investing to new highs after COVID-19. The fixed income credit continues to shine and US dollar expected to fall further. Opportunities prevail in emerging market credit. Diversification across all segments of commodities. The market rebalancing continues in the oil market. On the real state front, the industrial/ logistics outperformance to continue. Global inflation expected to remain contented. Demand for Gas improving and hence expect to be bullish on Natural gas prices.
Mr. Brahim Razgallah, Head of EEMA Economics spoke on the theme” When will Emerging Market go back to normality” stated that recovery is underway, but with recent disruptions. Global growth is let by manufacturing. Persistent low interest rates will make high debt levels sustainable. The Emerging economies Central Bank ‘rate cutting cycle is mostly over, and some could start hike to 2021. He gave insight on the Emerging markets Forex and Post –lockdown rebound. He highlighted that the developing market accounts for most vaccine pre-orders. He explained the Post – Pandemic recovery and the long road to herd immunity. There is a paradigm shift on Gulf’s oil policy and the oil market balance. Policy choices have focused on public spending and policy space has narrowed. The haves and have- nots of the employment in the public sector was highlighted.”