Singapore’s sovereign wealth fund GIC (Government Investment Corporation of Singapore), which manages nearly $700 billion in assets, said it was taking into account the possibility of a global recession, but it was bullish on Australia as a safe haven against inflation challenges and continued to view China as a global economy. focus on investment.
GIC Chief Executive Lim Chow Kiat told Reuters in an interview that with rising inflation presenting huge risks, central banks must rein in inflation to ensure global economic stability or risk plunging the entire economy and financial markets into protracted trouble.
Challenges posed by the Russian-Ukrainian war, the cost of living crisis and a sharp economic slowdown in China have led to growing fears of a global recession. The International Monetary Fund (IMF) had previously forecast global growth at 2.7 percent next year, but also warned that countries that account for about one-third of the global economy risk shrinking this year or next.
Lim said: “We expect (the economy) to slow down further … we don’t know how long this will last. As investors, we will definitely stress test our portfolios and trade with recession in mind. situation.” Still, Lim is convinced that global central banks will eventually control inflation.
With about $690 billion in assets under management, GIC is the world’s fifth-largest sovereign wealth fund, according to research firm Global SWF.
GIC sees Australia as an attractive destination for investment, especially in the green energy transition and real estate sectors, as it is optimistic that the Australian economy is more resilient than the general economy and can cope well with inflation challenges.
Lim said that although Australian assets currently account for a small proportion of GIC’s investment portfolio and are mainly concentrated in real estate, he is also optimistic that Australia will play an important role in the global energy transition.
As China continues to drive growth and reform and opening up, GIC still sees China as an investment priority, with e-commerce giants Alibaba and Meituan both investing in it.
