It is ‘business unusual’ across the globe as economic parameters are out of the normal range of growth and expectations, economic analyst UBS head of emerging markets research Costa Vayenas said this week.

The global economic landscape is changing, with countries that traditionally extended credit for expansion projects, such as the US, the UK, Iceland and the most of Europe trying to deleverage as quickly as possible.

China, however, is in the enviable position of being both a significant commodity producer, as well as portraying the role of ‘credit expansion’, helping it to remain relatively immune to the global financial crises of the past number of years.

“China is out of synchronisation with the global economic scene, especially the US debt cycle. However, I believe that the Chinese will not be able to remain immune to the global economic sector forever,” Vayenas said.

He said investors had an appetite for the UK, the US and emerging markets, such as China, India and Brazil. These emerging markets were relatively cheap to invest in, underperformed in recent months and expectations were that these economies would see significant and sustained growth in the year ahead.

Commenting on commodities, Vayenas said that gold was the developed world’s most preferred commodity to store excess liquidity and for use as a measure of protection against currency debasement. Platinum was also popular, with UBS expecting the metal to touch $2 090/oz during the year.

Oil was not considered an attractive investment, and Vayenas said despite some spikes in the price being expected, the oil price would move sideways during the year.

“We continue to believe that there is a risk of a short-term setback in base metals prices. Chinese prices now stand below prices at the London Metals Exchange, so it is currently not attractive for China to import copper,” he pointed out.

While South Africa, which is a significant commodity producer, did not stand out as a particularly attractive investment destination, neither was it attracting attention for any negative reasons.

While South Africa’s debt levels were historically far below that of developed economies, there had been a recent spike in government borrowing to levels higher than other developing countries.

Vayenas cautioned against emerging markets closely linked to trade in the European Union (EU), owing to their economies being likely to underperform, relative to the economic crisis in the region.

“There is no easy solution to the debt crisis. We will continue to hear about Greece’s financial woes every three months, when payment of the bailout tranche will be due, and whether the country had achieved the critical transformation demands of the EU,” he said.

Trying to restructure the EU to function like the US federal system was also not an option, owing to there being too many countries with their own needs, cultures and people involved.

UBS expected the global economic environment to be less stable in future, owing to more stagflation, economic cycles being shorter and more recessions taking place.