Optimism fades

The optimism of those who expected 2014 to be a year of robust economic revival is now slowly evaporating. The possibility of the geopolitical tension having damaging effects on the economic situation has put a serious damper on hopes for higher profits from trading in shares. The picture is even more depressing as the deterioration of the mood is taking place in a low interest rate environment – normally a natural stimulus for investors in terms of stock exchange activity. All the uncertainty has led the International Monetary Fund to lower its forecast for global economic growth in 2014 from 3.7 pct to 3.4 pct, a figure only slightly better than for 2013 (3.2 pct). On the global map of economic power, it is still the perennially strong US – even though it was the poor start to the year in the US that initially weakened economists’ forecasts – and Asia that are exhibiting the healthiest growth, both being free of cross-border contagion (e.g. from the weakness o