Matthew Peter |
New research released by Queensland-based institutional investor QIC has suggested that the worst of the global financial crisis may be over.
Discussing the new research, QIC said there were signs emerging that the pace of contraction in the global economy was abating following significant fiscal stimulus.
It said its research indicated that the Obama Government's fiscal package in the US would boost gross domestic product (GDP) growth by 0.7 percentage points in 2009 and by 1.3 percentage points in 2010 while, in Australia, the Rudd Government's package would boost GDP growth by 1.1 per cent in 2009 and 0.6 per cent in 2010.
The research analysis said implementation of the fiscal packages had coincided with a sharp improvement in investor confidence following the slump experienced after the failure of Lehman Brothers. Equity market volatility had fallen to its lowest level since September 2008 and share markets have surged by 35 per cent since March 2009.
Commenting on the findings, QIC chief economist Matthew Peter said if the fall in confidence that occurred in late 2008 was to reverse, the impact of fiscal packages would be magnified.
Peter said history suggested that an improvement in confidence could occur very quickly and that the opportunity cost to investors who took a wait and see approach could be significant.
However, he cautioned that large fiscal packages had clouded the longer-term outlook, as governments would eventually need to raise taxes and lower spending to stabilise the build-up in public debt.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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