Thank you for visiting our site! Intersoft welcomes you...

"We help you evaluate and counsel your career to best suit your experience, education and personal background" - Intersoft HR

Message from CEO


As we head into the last quarter of 2014 we see much of the global economy pushing ahead with cautious optimism. While many parts of the world remain in turmoil there are positive signs the global economy is recovering from its lingering hangover from the 2008 financial crisis. Interestingly, a few unexpected trends have emerged. According to a recent economic report by Deloitte Touche Tohmatsu, for the past few years the major global economic trend was weakness in the developed countries and considerable strength in the emerging markets. That appears to be reversing. Growth is picking up speed in the United States and Europe, while it has declined considerably in most of the emerging markets. At the same time, inflation is very low in the US and Europe while it is nervously high in the emerging markets. However, even with the slowdown in the emerging markets, growth remains higher on average than the developed countries.

The Eurozone is recovering from its recession at various paces depending on individual country performance and circumstances. Germany and Austria have shown moderate growth in 2014, and the good news is this is projected to broaden across the zone going into 2015. It’s too early to tell how much of an impact the Russian crisis will have on the Eurozone but suffice to say the recovery is fragile at best.

The economic slowdown continues in China, which has been brought about by weakness overseas as well as a tightening of credit by the government. The Chinese government appears more focused on controlling the growing risk associated with the countries shadow banking credit system than with accelerating GDP growth. The Chinese government has recently made a gradual move toward a more freely floating currency, which is designed to control large inflows of capital.

The US economy is making slow but steady progress toward normalizing. Employment is rising and the excess housing inventories are gradually coming down which should lead to surge in personal consumption and investment. For the first time in nearly 20 years the US rate of exports appears to be growing faster than the rate of imports. This should add fuel to stronger growth going forward.

Japan continues to struggle on most fronts. Fourth quarter economic growth was weaker than estimated (0.7%) and weak export growth lead to Japan’s largest current account deficit on record. Business capital spending was also weaker than expected in the fourth quarter. The uncertainty about the potential impact of April tax increase is hurting businesses willingness to take risks. Going forward Japan’s export driven economy will depend largely on how well the US, European and Chinese economies do.

India continues to face many challenges. However, economic data suggests the worst is most likely over, and economic growth may have bottomed out. Political uncertainty is the latest concern as a new government was installed in May2014. A stable government with a clear economic vision is critical to stronger business and consumer confidence, which is key to India’s growth going forward.

Russia is moving backwards and its invasion of Crimea will likely have a significant negative effect on its already declining economy over the last four quarters. The equity markets are down, the ruble is weaker, interests rates are up and inflation is still high. The additional sanctions imposed on Russia by the west will likely isolate Russia further from the global economy hurting it’s economic growth further. However, Russia has recently negotiated a number of significant long-term energy deals with China which should strengthen its ties with China as a hedge against the US and the west.

Brazil’s economic fundamentals remain weak and fixed investment is low relative to other key emerging economies. Slowing commodities demand from China and weaker global demand for Brazilian products have all contributed to Brazil’s challenges. Inflation remains high and the real continues to decline, which has led to the central bank raising key rates a number of times in 2013/14.

Growth in the UK economy has accelerated with the arrival of the new Bank of England Governor – Mark Carney. Inflation has decreased and ¼ of a million new jobs have been created. Business investment is expected to increase significantly between now and 2016 and consumer spending is also expected to rise briskly.

Despite an overall fragile global economy, the Gartner IT spending growth forecast for 2014 is 2.6% and 3.9% in 2015.

David Rakhit
President & CEO