The number for FY2023/24 represents the average annual profit of GIC’s investment between April 2004 to March 2024, while taking world inflation into account.
GIC noted in its statement that the robust performance from April 2003 to March 2004- when capital markets recovered from the strong modification of the dot-com crisis- dropped out of the rolling window for this year’s 20-year return.  ,
The global market was tenacious in 2023 despite economic plan tightening the year before, and prices slowed, leading sturdy performance in danger assets, GIC said. The technical sector’s increased interest in conceptual artificial intelligence even increased profits.
But, geopolitical risks increased with the Russia-Ukraine battle continuing from 2022 and fight breaking out in the Middle East in October.
According to the review,” there are more likely to be renewed prices and lower growth” because of the spectre of product and supply chain disruptions.
CEO Lim Chow Kiat remarked in the statement that the level of uncertainty had “exaggerated significantly” over the past few years, challenging the assumptions made during the past four decades. He cited the rapid technological advancements, weather shift, and political flow in some nations.
Investors no longer need to ponder just where we are in the economic cycle or the interest rate trend’s direction, he wrote.  ,
” This , unprecedented uncertainty translates into a wider range of possible outcomes. Pitfalls , and investments await in similar measure”.
He claimed that the climate change is a good illustration of how GIC’s long-term versatile money can influence behavior.
Investors have begun to realize that financing the transition does require short-term opportunity costs that they are unwilling to bear, according to Mr. Lim, citing a drop in venture and development expense in the sector and fewer exits.
However, a team from GIC’s private collateral department identified businesses that needed funding to expand “first-of-a-kind” projects that usually fall between conventional capital buckets and launched an investment program for natural assets.
” Individual funds like ours is well-suited , to manage climate technology’s potential , J-curve”, said Mr Lim.
Nuclear fusion is one instance of an investment with a longer sky, according to GIC chief investment agent Jeffrey Jaensubhakij.
The portfolio invested in a nuclear fusion business about three years ago, but he claimed the tech is still in its eight to tenth year of development.
ECONOMIC, GEOPOLITICAL CHALLENGES
In its statement, GIC claimed that elements like tight economic policy in the US, China’s real estate market, and heightened geopolitical tensions are making the world purchase setting appear difficult. But, it claimed that a faster rate of AI implementation would result in higher productivity growth.
The world economy has been adaptable, but that may slow down the disinflation approach, and some big central bankers have postponed their ideas or done less than expected, said the sovereign wealth fund, which manages Singapore’s resources and helps to Singapore’s monthly budget.
Core central banks may not only have to keep rates higher for longer but also have to potentially raise them, according to the report.” If inflation proves more persistent than expected and even increases, core central banks may not only have to keep rates higher for longer. This would increase the risk of a recession and put strain on households and businesses that are already dealing with high borrowing costs.
Mr. Lim responded to a question about the impact of the upcoming US elections by saying that GIC has a high level of confidence in the nation.
” Whoever is in charge, we think the country will continue to do well because they have so many positive fundamentals”, he said, pointing to innovation, talent and deep markets in the US.
” Clearly, the US will continue to be a very important market for us”.