Burlington, Canada, March 03, 2015 --(PR.com
)-- “The global economy should have taken a page out of the US’s book, by following suit with large and substantial stimulus packages to get their economies on track,” says Mian. It was this early decision that has paid clear dividends with the strength of the US economy now compared to China, the EU and other economies around the world.
The US stimulus package allowed companies to make large capital investments helping them to progress past the downturn and look to the future. Too many other governments waited on stimulus packages or did not provide enough stimulus and are still paying the price for their economic strategies emphasizes Liaquat Mian of LJM Developments.
Mian believes his view is most clearly illustrated in the European Union where economic recovery is as much as three years behind the US. This is proven with the EUs Central Bank’s most recent move to mirror the US’s Federal Reserve stimulus package of several years ago. The EU bank is now set to pour almost €1.1 Trillion into the marketplace (The Guardian | January 2015). Almost the same amount that the US poured into its market back in 2008, that resulted in the current strength of the US’s position.
There were expectations that something would be done as the EU economy was forestalling and poised to head into recession again early this year. This stimulus is poised to help the members of the EU like Sweden, Norway and Denmark that have some of the bleakest financial outlooks. Except for Germany with its manufacturing strength and the UK which has a bright forecast in 2015 (The Week |November 2014) due to increased construction industry, the rest of the EU will likely need the renewed stimulus to stay out of recession. That combined with low oil prices should help the EU market to stabilize and slowly climb back to positive growth by the end of 2015 and into 2016.
According to Mian, the Middle East and commodity based economies will also see a large dip in 2015 due to the increased pressures on oil pricing. OPEC countries will especially be hurt by these prices except possibly Saudi Arabia, Kuwait and the UAE all of whom have substantial cash reserves. With revenues in the area based on 80 - 90% from oil, countries such as Iran, Iraq and others in the region will face a difficult year with low oil prices. Mian expects Russia to see further devaluation in their currency in 2015 with the effects of the Ukraine crisis and economic sanctions taking a hold in that country.
Mian believes the Bank of Canada will further cut interest rates at the next quarterly meeting in March, down another 25 basis points to further spur economic growth and to combat the effect low oil prices are having on the western provinces economies. Sister countries Australia and New Zealand, are expected to see the same currency depreciation- a view shared by many pundits (Seeking Alpha | December 2014). Mian expects a 25% and 22% respective currency depreciation this year for Australia and New Zealand against the US dollar for their roles in commodity prices and the dip of those supplies to China.
For the far east, Mian predicts Japan will continue to progress as its two tier stimulus programs allow the country’s economy to grow and outpace those around it with the Yen rising to 1.20 USD and staying strong for at least the next 3 months. China will see a slight slowing of its economy due to internal pressures but still remain a strong economy.
On the real estate front, Mian predicts 4 - 5% growth in Canada over the next 2 years and emphasizes there will be no housing bubble burst here as opposed to many pundits beliefs. Mian believes because of the allure of Canada for foreign investment, the country’s cost of living levels compared to other international markets and the lower interest rates, will actually propel growth in 2015, especially with a lower currency to entice foreign buyers of condos in the major markets locally.
Liaquat Mian of LJM Developments sees investment drying up in the Middle East due to the lower oil, but may produce buying opportunities. Other areas, such as the EU, Russia, the US and the Far East will see strong real estate markets as well because of the generally low interest rates. The US will still be a beacon country for stable investments in 2015.
About Liaquat Mian
Liaquat Mian is the CEO of LJM Developments, a real-estate development company based in Burlington, Canada. Mr. Mian is a Chartered Accountant by profession and a member of the Fellowship of Chartered Accountants. He is a frequent blogger and gives talks on state of Global economy, real-estate markets, and currencies. Mr. Mian brings more than 20 years of experience in financial services and real-estate investment.
The opinions stated in this article are those solely of Mr. Liaquat Mian, and do not represent financial or investment advice, and may not represent L JM developments. Individuals must seek independent qualified financial advice from a licensed financial services provider before making any investments. Opinions, predictions, and forward looking statements in this article should not be used for making financial decisions or investments. Investors must be aware of the risks involved in making investments and must seek professional advice.