THE world is in for a challenging year ahead, as the sharp rise in interest rates over the past year amid the tightening of US monetary policy — which has taken a toll on currency markets, particularly in Europe and Asia — and China’s property crisis culminate in an imminent global recession, says prominent economist Prof Douglas McWilliams.
“The coming period is going to be tough as we cope with the aftermath of inflation and the hangover from cheap money. International trends will not be helpful at least in the short term with both Asia and Europe facing weak currencies, weak international demand and upward pressure on interest rates at least for the next nine months before a shallow recovery follows in 2024,” McWilliams, who is founder and deputy chairman of UK economics consultancy Centre for Economics and Business Research (CEBR), tells The Edge in an interview in Kuala Lumpur. He was in town for the Malaysian Real Estate Investment Trust (REIT) Managers Association forum last Tuesday.
The economist is predicting that the REIT sector will be in for a “tough time in a likely flight to quality [in which] the quality of the underlying assets will affect valuation”.