4 things S'pore can do in the face of deglobalisation

SOME eight years since the global financial crisis (GFC), global economic growth still remains highly sluggish. The IMF now forecasts global growth to be 3.1 per cent in 2016, comparable to actual growth of 3.2 per cent in 2015. However, current growth pales in comparison to the average global growth rate of 4.5 per cent between 2000 and 2007 pre GFC.

A large part of this growth drag is due to the continued stagnation of the Advanced Economies (AEs) which are projected to grow at 1.6 per cent in 2016, compared to 2.1 per cent in 2015. This is notably slower than the average growth rate of 2.7 per cent between 2000 and 2007. While Emerging Market and Developing Economies (EMDEs) are expected to grow at 4.2 per cent in 2016 compared to 4 per cent in 2015, even they are significantly underperforming their average growth of 6.6 per cent between 2000 and 2007.

To make matters worse, policy uncertainties stemming from the surprise outcome of the presidential elections in the US, the unanticipated Brexit vote in the UK, as well as the rejection of the referendum on political reform in Italy have escalated downside risks to global growth.