Markets with Madison: Is the world entering a wartime economy?

Investors may be too optimistic about the year ahead given the world is covered in conflict and major economies such as the United States are mobilising, a leading geopolitical adviser warns.

“We are seeing wartime economies emerge both in terms of increased military spending, but also changing the way in which their economies perform, behave, where governments allocate money,” Landfall Strategy founding director David Skilling told Markets with Madison from the Netherlands.

“Over time, even small economies like New Zealand can’t avoid that.

“We’re not on the firing lines in a direct sense but we are a price-taker of a lot of this behaviour, so we can’t ignore it either.”

Nato’s new secretary-general Mark Rutte has been urging its members to prepare for “a wartime mindset” and “turbocharge” Europe’s military spending.

Almost all Nato members were now spending 2% of their annual GDP on military efforts, if not more.

“2% is kind of becoming 3%,” Skilling said.

However, government balance sheets the world over were swamped with debt, providing a fiscal challenge, he said.

Watch David Skilling discuss the mobilisation under way and the companies that could benefit in today’s episode of Markets with Madison above.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice.

We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.