Who grows capital intensive and on others’ savings?
Merrill Lynch also plots investment spending versus the loan-to-deposit ratio. This is a proxy to pinpoint capital-intensive growth stories as financing gets scarce. The bank maintains its loans-to-deposits unity and uses the sample’s median investments of 25% of GDP. While the upper right quadrant (highly levered, heavily investing) countries, such as Balkans and Baltics, run the risk of hard landing, countries in the lower left quadrant, such as GCC countries, Iraq, Israel, Turkey and South Africa, should only witness a soft landing. Falling FDI, is likely to be another drag. Who is small and open? Another analysis focuses on the size of the domestic market and the openness of the economy. Small and open economies will be more vulnerable to the global slowdown, as they are unable to shift their productive capacities to the domestic market. Russia, Turkey, Egypt, Saudi Arabia and South Africa seem more comfortable to weathering the global slowdown, according to this metric. While the
