by 2 minutes The offices of Pacific Investment Management Co (PIMCO) (R) in Newport Beach, California are featured in this file photo. 4th of August, 2015. Mike Blake/Reuters/REUTERS According to bond manager Pimco, global growth will decelerate next year but remain solid, with a move toward sustainable investing presenting risks and possibilities in some industries. In an asset-allocation report given by a spokesperson, Pimco portfolio managers Erin Browne and Geraldine Sundstrom made the prediction. As countries recover from the COVID-19 epidemic, the managers predict that real gross domestic product in developed markets would expand by 6% this year, then moderate to 3% in 2022. “Pent-up demand, high levels of consumer saving, and strong corporate leverage ratios give a runway for private-sector-led development,” they concluded, implying that growth-oriented assets should be appealing. Slower vaccination rates in emerging nations have slowed their recovery, according to the research, which forecasts GDP growth of 3.5 percent this year and 5 percent in 2022. They noted that because the global economic upswing is in the middle of its cycle, the emergence of investment strategies and company practices focused on environmental, social, and governance challenges could be different from prior recoveries. Renewable energy, semiconductors, and forestry goods should benefit from the trend, while traditional oil and gas corporations may face difficult transitions, according to Pimco. The authors concluded that efforts to reduce inequality, such as raising minimum salaries and improving working conditions, “would undoubtedly have a trickle-down effect on smaller enterprises.” They also stated that greater income redistribution “may also entail more overall consumption and less willingness to save.” Ross Kerber contributed reporting from Boston, and Leslie Adler edited the piece./n
Read More
