🔒Rising inflation and slow global economic growth, after one of the quickest recoveries following one of the fastest bear markets thanks to the pandemic, is making experts ask the same question.📉📈❓ economy
Is South Africa heading for stagflation or deflation or both? Rising inflation and slow global economic growth, after one of the quickest recoveries following one of the fastest bear markets thanks to the pandemic, is making experts ask the same question. Both are possible and both will have a material impact, which investors will need to plan for, says Adriaan Pask, chief investment officer at PSG Wealth.
“Globally, we have seen central banks aggressively raise interest to bring inflation down, giving rise to the possibility of not only lower economic growth, but also potential recession, particularly in the United States . “If you look at some of the key drivers of inflation, such as oil or energy prices, these might recede over the short-term given how hard they have run in recent months. However, a lack of investment in this sector puts a structural tailwind behind the prices.”
Pask advises investors to focus on businesses that can protect their margins when they draw up their investment strategy, given the looming stagflationary environment.
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