Page 18 - CMP3

1.1 RESILIENCE IN AN ERA OF HEIGHTENED GLOBAL UNCERTAINTY
The global economic and financial landscape during the CMP2 period was marked by significant events, many of them largely unanticipated at the start of the decade. As a result, capital markets fluctuated between periodic bouts of volatility and calm, but nonetheless stayed relatively resilient. The 2010s began with slower-than-expected recovery of advanced economies (AEs) in the aftermath of the global financial crisis and ended with the unprecedented global pandemic of 2020 that resulted in the most severe economic shock since the 1930s. In between, the global economy experienced numerous other risk events, which influenced the direction of portfolio flows.
1.1.1 OVERVIEW OF GLOBAL GROWTH IN THE LAST DECADE
The decade saw increasing economic and policy uncertainty, with multiple key events that had considerable ramifications to the global economy and financial markets around the world. These included the sovereign debt crisis in Europe, the decision by the United Kingdom (UK) to exit the European Union and the growing United States (US)-China trade tensions following the US election of 2016.
Chart 1
THE CMP2 DECADE WAS MARKED BY SIGNIFICANT EVENTS THAT HEIGHTENED UNCERTAINTY AND CAUSED SIGNIFICANT RAMIFICATIONS GLOBALLY
60,000 50,000 40,000 30,000 20,000 10,000
Iraq war and outbreak of Severe Acute Respiratory Syndrome (SARS)
US recession and 9/11
US fiscal cliff and sovereign debt crisis in Europe
Sovereign debt crisis in Europe
Financial credit crunch
COVID-19 pandemic
US-China trade tensions
US presidential election
Brexit
US Federal Reserve tightening
Gulf War I
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: World Uncertainty Index, Stanford Mimeograph. Ahir, H., N., Bloom, and D., Furceri. 2018.
16 SECURITIES COMMISSION MALAYSIA
World Uncertainty Index