Sunday, August 16, 2009


Shift of global capital flows (towards Asia) and public debts in OECD countries: Towards an inevitable crisis?

Asia’s attractiveness for capital will pick up very significantly after the crisis: vigorous growth - whereas growth has decelerated in OECD countries; development of domestic demand, infrastructure construction programmes; growth in the size of financial markets and banks; improvement in the perception of emerging risk and deterioration in the perception of risk related to OECD countries.

This means that Asia will become more and more attractive for private capital, and that Asian savings will increasingly be encouraged to remain invested locally. At the same time, public debt in OECD countries will rise considerably. We can therefore see the risk of an imbalance between the sharply increased supply of public debt and fading demand for OECD
countries’ public debt, to the benefit of financing of investments in Asia.

To see full report: FLASH ECONOMICS