The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
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OXFORDSHIRE, United Kingdom — Today, for the first time since a brief rebound in 2010, all of the world’s major economies — in America, Europe and Asia — are growing again in what has been called “synchronised global expansion.” And yet geopolitical risk has never been higher. This apparent contradiction was the topic of a VOICES panel, in partnership with QIC Global Real Estate, featuring Economist Intelligence Unit analyst John Ferguson; Quartz financial reporter John Detrixhe and Rohan Silva, co-founder of Second Home.
The IMF predicts global growth of 3 percent next year. But Ferguson made it clear that the Economist Intelligence Unit (EIU) was “not as optimistic as IMF, due to risk around the world.” He cited China’s “massive debt problem” as well as geopolitical risk around the world: “It’s North Korea, it’s Iran, it’s Mr Trump and his Twitter feed… We have never known a period of greater global risk.”
Silva sounded a more optimistic note, saying: “Unpredictability is also creating immense opportunity: there’s a huge amount of job creation, investment, optimism. Paradoxically, because of unpredictability, innovators are flourishing.” He cited the $5.5 billion investment by venture capitalists in the UK’s technology sector — roughly three times the sum invested in Germany’s tech sector — despite Brexit.
We have never known a period of greater global risk.
On the topic of Brexit, Detrixhe said “the signs of economic toll are there, but we haven’t yet seen the cliff edge.” Ferguson predicted a deal would be done, because “although the UK would suffer more from hard Brexit, the EU would also suffer — it’s in everyone’s interests to get deal.”
On the crisis on the Korean peninsula, the prognosis was less reassuring. “It is the one thing that could undermine the global economy like nothing else… it’s the biggest geopolitical risk,” said Ferguson. “North Korea will reach full nuclearisation,” he predicted, “but Trump won’t strike because the weapons are spread out and there would be retaliation from North.”
Nonetheless, Ferguson added a word of caution, saying “Trump is unpredictable,” and forecasting casualties of 100,000 to one million people dead in the event of war. Rohan added that should military conflict occur, “all electronics production worldwide would shut down” due to the critical importance of South Korea to the global supply chain. Detrixhe underscored the point: “I worry with Trump that there is no strategy.”
And yet, despite the geopolitical uncertainty, Wall Street is at record highs, boosted by mooted cuts to America’s corporate tax rate that could see US companies repatriating billions of dollars in profit, noted Silva who predicted Amazon could become a $1 trillion company on the back of a continued stock market rally.
To learn more about VOICES, BoF's annual gathering for big thinkers, in partnership with QIC Global Real Estate, visit our VOICES website and click here to request an invitation to attend.
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