Threats to world economy grow
These factors might combine to stunt growth from 2013, Roubini said in an interview in Singapore. Other possible outcomes are “anaemic but OK” global growth or an “optimistic” scenario in which expansion improves.
Roubini is among the analysts who predicted the global financial crisis of 2007-2009. For him, the aforementioned factors are bloating public and private debt.
US unemployment rate rose to 9.1 percent in May, a sign that the global economy is losing steam. At the same time, the US government is still running over a trillion-dollar budget deficit this year, putting growth at risk.
In Europe, restructuring the debt of Greece, Ireland and Portugal is weighing heavily on the economy, as the war against Gaddafi is becoming costlier.
Japan’s economy, the world’s third largest, slid into a recession last quarter, after it was hit in March by an earthquake and a tsunami, which led the Fukushima nuclear crisis.
Tokyo is spending an initial 4 trillion yen (US$ 50 billion) to clean up from the disaster, estimated to have caused as much as 25 trillion yen in economic damage.
China is not doing well either as it faces slower growth, higher inflation and a real estate bubble. According to Roubini, massive non-performing loan problem in China’s banking system and a massive amount of overcapacity is going to lead to a hard landing.
For the New York-based economist, everything points to a perfect storm in 2013. Other analysts told AsiaNews that world shares should instead “start to decline in July and collapse in the fall.”
This, plus some local war, might wipe out the world economic and monetary systems.
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05/06/2019 09:41
