Business | Economy
World 'faces worst recession in 3o years'
Singapore's GIC, one of the biggest sovereign wealth funds, warned on Monday the world could be facing its worst recession in 30 years and that financial markets would be highly volatile.
- Reuters
- Published: 23:39 April 21, 2008
Singapore: Singapore's GIC, one of the biggest sovereign wealth funds, warned on Monday the world could be facing its worst recession in 30 years and that financial markets would be highly volatile.
But the fund said its multi-billion dollar investments in UBS and Citigroup would give good long-term returns.
The Government of Singapore Investment Corp (GIC), which analysts estimate manages $300 billion, spent $11 billion on UBS convertible bonds in December after the Swiss bank sought to shore up its capital following US subprime losses. GIC also invested $6.88 billion in Citigroup in January. Stocks in both banks have slid this year amid financial turmoil that GIC said would leave markets extremely volatile over the next one to two years.
"We could be facing a recession which is longer, deeper and wider than any recession we have encountered in the last 30 years," Deputy Chairman Tony Tan told GIC's staff. "The financial contagion has now spread beyond US shores, increasing the likelihood of a global financial crisis."
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