The US economy has now been slowing for some time and there are mounting fears of a recession. However, we believe that by the end of 2008 the economy could already be on course for a recovery, as the lagged effects of the recent action by the Federal Reserve and the proposed fiscal stimulus package from the Bush administration feed through.

Despite current market volatility, economic growth across Latin America is still strong and the region remains attractive for investors across the globe. Both public and private sectors have very ungeared balance sheets, while the region as a whole continues to run a current account surplus.

As concerns continue to grow around the US economy and European property market returns slow, Asian property markets will increasingly be seen as an alternative destination for western investors.

Following the credit crunch of 2007, many parts of the European property market saw some correction during the latter half of the year, with secondary property taking the biggest hit. While higher yields present a buying opportunity, investors are now likely to take a more cautious approach to acquisition.

The US economy remains fragile as housing sector weakness feeds through to consumer sentiment and spending. It now seems likely that economic growth will slow, inevitably impacting profits growth.

In the US the focus is on the subprime debt and credit crunch woes and the course of interest rates and possible stagflation. The outlook is more benign however for Latin American economies and markets, as for emerging markets generally.

In our view, Asia is exceptionally well positioned to outperform despite a G7 economic slowdown. The post-1997 financial rebuilding of the region is now beginning to bear fruit. In contrast to the G7 economies, balance sheets are in good shape at the sovereign, company and household levels, allowing reinvestment to drive future growth.