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The primary trend taking place in the global space at the moment is that the world?s larger economies are starting to recover from their recessionary conditions.

We have seen a variety of evidence of this return to economic growth. For example, during the downturn stockpiles were slashed and they are now being replenished. The manufacturing sectors in the US and south-east Asia are showing an upward trend and recent data released in the US shows that the non-manufacturing sector is also recovering. In turn, this has translated into greater optimism amongst consumers which is showing in spending patterns. This trend should specifically benefit the global consumer and manufacturing sectors during 2010.

However, there are two caveats to this rosy scenario: the global economic recovery takes place against a backdrop of weak fiscal positions and monetary systems that have been flooded with liquidity. Broadly speaking, the western governments and some Asian economies are running huge fiscal deficits. In some cases, the deficits are taking place against a backdrop of high levels of sovereign debt. For instance, the ratio of debt-to-gross domestic product (GDP) in Japan is greater than 200 percent. In recent history no large economy has developed debt of this order which implies that elimination of this debt, or reduction to acceptable levels, will involve the writing of history.

Although only anecdotal at this stage, the state of California (which would rank as the world?s tenth largest economy) is rumoured to be on the point of defaulting on its debt (last year the state started issuing coupons because of funding shortages).

Whilst South Africa is not immune to global impacts, by comparison the domestic economy is in a substantially better position than many of the world?s large economies.

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