Globalisation is not going backwards. Figure 1 is a case in point. The chart illustrates the remarkable growth in global exports. By the end of 2023, global exports had increased 459-fold compared to 1948, reaching an impressive $24 trn. The global financial crisis (GFC), the US led trade war, the pandemic, the cost-of-living crisis, China’s economic malaise and conflicts have disrupted rather changed the trend. Again while global trade-openness, calculated as the sum of global exports and imports expressed as a percentage of world GDP, has been volatile, there is no sign of trade openness reversing decisively. Global trade openness has averaged, 46% since the GFC compared with 41% in the decade prior to GFC.
Introducing
Sharmila Whelan
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The founder of Westbourne Research (www.westbourne-research.com), Sharmila Whelan is a seasoned Global Geopolitical-Macro Strategist with nearly three decades of experience advising buy-side clients on multi-asset investment strategies and asset allocations. Her career has been defined by her differentiated thinking, a deep understanding of the intricate connections between global geopolitics, macro and policy dynamics, and the Austrian business cycle approach to economic analysis. She has counseled governmental bodies such as the CIA, the US State Department, the British High Commission, DFID, and China’s NDRC.
Sharmila has held prominent roles in both London and Hong Kong, serving as Managing Director at Aletheia Capital, Director at Merrill Lynch Bank of America, Senior Economist at CLSA, and Asia Regional Economist at BP Plc. In 2022, Bloomberg recognised her as one of the UK's "12 New Expert Voices." She is a frequent media commentator on Bloomberg TV and radio, BBC World Business News, and CNBC, and is a sought-after speaker at high-profile events such as the Financial Times Wealth Summit and CFA UK & India conferences. Sharmila also contributes opinion pieces to Financial Times Professional Wealth Management and the Economist Group’s EIU.
Publications by Sharmila Whelan
Global| Dec 16 2024Globalisation: Same, same but different
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- Global| Nov 08 2024
In The Era Of Fiscal Activism
Regardless of who was going to become the next US President, Kamala Harris or Donald Trump, US debt is headed one way and that is up, it is only a question of magnitude. It is not just the US, globally public debt is rising, led by advanced countries and China. World public debt is forecast to exceed US$100trn in 2024, of which 35% will be accounted for by the US and 100% of GDP 2030 according to IMF forecasts (Figure 1).
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- India| Oct 04 2024
India’s Economic Rebound and Growth Prospects
India’s economy is rebounding, with the business cycle upswing becoming more pronounced and widespread. Although GDP growth slowed slightly in the second quarter, moderating to 1.1% quarter-on-quarter (QoQ) from 1.3% QoQ, this was largely due to a contraction in government spending, inventories, and exports. Importantly, both consumption and investment spending grew robustly, marking the fastest pace since late 2021 and early 2022, respectively. Leading indicators remain positive, and the economic fundamentals are supportive of continued growth.
The corporate profit cycle is in full swing, with company balance sheets in rude health, positioning businesses to increase investment. Corporate debt-to-equity ratios have declined significantly, and corporate debt as a percentage of GDP is well below global averages. Consequently, the debt service-to-equity ratio is now below the 2007-2023 average, and the interest coverage ratio remains stable—44x for IT, 7.5x for manufacturing, and 1.7x for non-IT services. Infrastructure companies, buoyed by optimism, are increasing their spending, according to the RBI’s Q1 FY24/25 Services and Infrastructure Outlook Survey. Capacity utilisation is tight, and order backlogs are rising. Additionally, monthly data shows upward trends in the capital goods sector and the eight-core industry infrastructure index.
Public sector banks, which dominate the financial sector, have never been stronger. Non-performing loans (NPLs) are at a 12-year low due to a sustained reduction in new NPLs and higher write-offs. Provisioning levels are at their highest since 2007, and asset quality among large borrowers continues to improve. The sector is well-capitalised, with average capital adequacy ratios of 16.8%, comfortably above the RBI’s 11% regulatory minimum. Private credit is growing at double-digit rates, with strong borrowing demand across industries, services, small and medium enterprises, large corporations, mortgages, and big-ticket consumer goods.
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