Global Economic Expansion

As regular readers can attest, we have been long time supporters of a global economic expansion. Well this week the reserve bank have reaffirmed their position on the global economy and outlook for 2006.

According to the latest RBA statement on monetary policy, most regions of the world are experiencing good economic growth this year, with the United States and China in particular performing strongly. This is providing a favourable economic environment for the Australian economy.

Finally the RBA has noted an improvement in conditions in Japan, where spending by businesses and consumers has strengthened and there has been good progress in winding back the balance sheet excesses that had hampered growth in the past. Some good news for long time investors in Japan and Asia specific investment funds.

As mentioned in this years Member Investment Workshop series, solid growth is being recorded in the east Asian region and in the emerging economies of Eastern Europe and Latin America, with the euro area the only significant weak spot at present, particularly the big three Germany, Italy and France.
Overall the world economy is likely to record a further year of above-average growth in 2005, and most observers expect this to continue next year. This can be only positive news for long suffering global investors entering into a period of economic expansion that should be reflected on global equities markets, finally light at the end of the tunnel.

this weeks article by Alistair Milne