Global Groundshift

Developing countries overtook the first world during the three months to March, the latest quarterly report from Fiduciary Trust International shows. Jeffrey M. Applegate reports.

Fiduciary Trust International Quarterly

Sometimes industry statistics quietly record landmarks that will ultimately change the way we invest. The latest quarterly report from Fiduciary Trust International reveals that the share of global GDP attributed to “developing economies” overtook developed economies for the first time ever in the three months to March. Developing economies accounted for 50.2% of global GDP compared with 49.8% for developed economies
The report also presents a number of key forecasts, collated by Jeffrey M. Applegate, chief investment officer of Fiduciary Trust Company International. Applegate recently talked to Eureka Report (To see his interview with Alan Kohler, click here).

Key points of the report include:

Forecast global GDP growth is slightly lower for 2006, with a prediction of 4%, compared with 5% for 2005.
Profit growth is likely to slow and inflation measures should ease modestly as 2006 unfolds.
Fiduciary expects the US Federal Reserve to put an end to rate tightening at 5%.
For asset allocation, Fiduciary forecasts global equities will once again perform better than bonds
Asian currency revaluations should lead to more balanced global growth.