Andy Seaman, partner and portfolio manager at Stratton Street Capital sees continued global imbalances in current accounts, which is driving investment trends.
The large global imbalances that led to the credit crisis, and to countries having large net foreign liabilities leading to crisis, have reduced somewhat since 2008. They haven’t reversed or anything dramatic, so imbalances are still growing, but not as fast.
The big imbalance on the surplus side, now a similar size as it was in 2006-8, is the surplus of the oil producing countries, largely the Middle East and Russia. The MENA oil exporters alone are running a $400bn current account surplus, and Russia is running around a $200bn surplus.