Reflationary trend and the reality
Rangaraj Perumal
Group Chief Financial Officer at Fujairah Building Industries PJSC
we are experiencing an unprecedented down turn in global economic activities, thanks to C19 and its influence on the survival challenges the world is experiencing. The reality is that the human races has to thrive, the countries has to function, the economies has to be buoyant, to ensure that buoyancy the financial markets as one of the frontline indicators, has to stay afloat, needless to say on the medics and other front line segments.
Governments across the globe are announcing stimulus packages and other fiscal policies to keep the business thrive in the new normal format till the world settle down with the C19 challenges.
Having said easy than done, the economies, are posing the reflationary impact propelled by the stimulus measures. Does this mean a long lasting solutions put in place or the temporary reactions the recipe of financial markets are showcasing.
To my intelligence it is partly true, how long and how far the incentives and stimulus keep the machine of world economy performing. Is it not the time for the economy to stand on its own and stay away from the fundamental weakness self corrected?
What we see across the financial markets and the securities or the segments are showing the improving trends however on a fragile base to add. On going down to basics, the business has taken a blow to a great extend.
Then what keeps driving the buoyancy, is it "Debasing" ? will that be a long lasting solutions, particularly once the menace of the C19 is overcome. The market will be flooded with the money, but the supply will not match with or in fact fall short of the immediate requirements of the market, This might show a complete disparity in PPP in domestic and international arena.
The economies, has to weather the high inflationary effect in the medium to long term, while enjoying the support of reflationary trend at present.