Question 2Financial environment (20 marks | Word limit: 1000 words)
LO1: Explain the interrelationships in domestic and global financial markets.
LO2: Explain the impact of current issues and key economic and financial indicators on the Australian and global financial markets.
In preliminary meetings, many of the board members raised concerns regarding the outlook for global economic growth as well as the possibility that PCC’s contracts with China will not achieve the scale of projected profitability.
Note: You should approach this in the same way you approached the answer from your first analysis task. There is no right or wrong forecast as long as you use appropriate economic reasoning. Use the start date of your study period as your base.
(a)Evaluate the outlook for global economic growth over the next twelve (12) months. Are there any concerns that the board should be made aware of regarding demand for commodities? In your answer include a percentage forecast for global economic growth. (10 marks)
(b)As the Chinese authorities restructure their economy so that growth will be more consumer oriented as opposed to the previous investment led growth approach, discuss how, in your opinion, this will impact on PCC’s operations over the next twelve months. Justify your opinion. (10 marks)

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