Global Economic Outlook and Challenges Faced by Singapore Essay

Global Economic Outlook and Challenges Faced by Singapore - Essay Example This is endorsed by a survey by the McKinsey Group which finds that amid the uncertainty the prospects for investment banking in the emerging markets remain relatively bright (BÃ ¶hme, Chiarella & Lemerle (2008). Southeast Asia however, has been making solid economic progress since the financial crisis of 1977 but Singapore has been going through a lean pitch and much depends upon the economic activity that take place globally in the near future. The OECD countries accounted for 75% of the world GDP less than 5 decades ago which today accounts for less than 55 percent (Santiso, 2008). The US stock market that accounted for 50% of the world market capitalization now accounts for less than thirty five percent and continues to decline. Emerging markets like Brazil, Mexico, Turkey and South Korea have already become OECD members and Brazil is all set to become the global player. It is growing into a global trader reaching into markets like Middle East, Africa and South East Asia. The subprime crisis of the US can provide new oppurtunities for the Asia-pacific region. The Asia-Pacific investors are playing a key role in supporting the developed countries during the current financial turmoil. Berner (2008) of Morgan Stanley however fears that recession will go global and the industrial economies will be flat in 2009. Most emerging economies have been facing a combination of external shocks and tighter monetary policies. Since the exports to the US would be reduced, it would impact the other economies as they would face decline in employment, which would have pressure on the income, consumers and their lenders. Most predictions estimate that the US economy will take a V-turn and not U-turn. The airline industry too is facing the darkest future as multiple airline liquidations will further cripple the economy that depends on affordable and efficient transportation system.