Dollar strength destroying global growth

Synopsis

In this episode of FT Markets, Michael Power, chief strategist at Investec Asset Management, discusses the implications of a strong dollar on global growth. He highlights that while the IMF and World Bank project a world growth rate of three percent for the year, this figure may be misleading when measured in dollars. Michael points out that GDP growth in purchasing power parity terms shows a different picture, particularly noting that China is performing better in market rates. He emphasizes that the European Union is a significant detractor from global growth, contrary to popular belief, and mentions Brazil's depreciating currency as a major factor pulling down other economies. Michael argues that there are two distinct languages in the economic landscape: one based on purchasing power parity and another rooted in dollar demand, which is crucial for corporate executives assessing global growth.