Populist policies could lead to stagflation, says Schroders’ chief economist

SINGAPORE (April 18): Schroders’ Chief Economist & Strategist Keith Wade says populist policies to restrict trade and migration are likely to lead to stagflation which could impact Asia and the emerging markets (EM).

While markets have rallied following the Brexit and Donald Trump votes, Wade notes that dovish signals from the US Federal Reserve and signs of a global recovery were already falling into place before the two events.

“2017 has started strongly, with growth seemingly healthy and global trade feeling the benefits. This has coincided with a revival in equity markets, particularly in EM,” says Wade. “Unfortunately, better trade values have not been as a result of a secular change, but rather a consequence of higher prices and stronger global growth.”

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