McKinsey: Farewell to cheap capital? The implications of long-term shifts in global investment and saving
In its Farewell to cheap capital? report, McKinsey expects global investment to experience unprecedented growth in the coming years, but with interest rates rising accordingly.
1/3/2010
Around the world, developing nations are rapidly building infrastructure, schools, hospitals, and other large-scale public works projects. This is especially the case in China, where companies are expanding manufacturing facilities and workers are upgrading their homes. The urge to invest will likely outweigh savings, increasing interest rates in China and in other developing nations. This trend will also slow investment and global growth to an extent.
McKinsey's other key findings include:
• The decline in capital demand among developed economies is an overlooked catalyst of the approximately 30-year interest rate drop that grew the credit bubble.
• By 2020, global investment demand could reach highs unseen since the post-World War II era of rebuilding in Europe and Japan.
• The investment boom will place upward pressure on real interest rates unless the global savings rate increases substantially.
Most Read
- Front Line: Construction Industry Faces a Labor Shortage
- First Person: Disruptive Technologies Changing the Business Landscape
- What Does Industry 4.0 Mean for U.S. Manufacturing?
- 32nd Annual Corporate Survey & the 14th Annual Consultants Survey
- Due Diligence: Thoroughly Investigating the Technical Aspects of a Site
- 2017 Top States for Doing Business: Georgia Ranks #1 Fourth Year in a Row
- How Millennial Workforce Trends Are Affecting Business
Follow Area Development
SPECIAL PRESENTATIONS
-
West Coast "Tech" Cities Top List, Smaller MSA's Show Workforce Chops
-
2017 Gold & Silver Shovel Awards Recognize States Compiling Healthy Rosters of New and Expanded Facilities
-
2017 Top States for Doing Business: Georgia Ranks #1 Fourth Year in a Row
-
31st Annual Survey of Corporate Executives: Confidence in U.S. Economy, Need for Investment in Infrastructure Reflected