19.12.2022, 10:19
Economist Roubini predicted a prolonged depression in the global economy
Source: OREANDA-NEWS
OREANDA-NEWS American economist Nouriel Roubini, who predicted the crisis of 2008, predicts a deep and protracted depression in the global economy due to excessively high amounts of state debt. The words of the expert on Monday were quoted by the British newspaper Financial Times.
"The recession will not be short and weak, it will be deep and long. Despite the optimistic statements of the monetary authorities of the United States, Great Britain and the European Union, a "soft landing" [during the economic crisis] should not be expected," he said. Roubini sees the reason for pessimism in the fact that the United States has faced "the highest inflation" in the last 60 years, which is now at the level of 7.1%, despite the fact that unemployment remains low, "only 3.7%". In these conditions, the interest rate increase "cannot end with a soft landing," the economist is sure. In Europe, the situation is even more dangerous: in particular, the UK is "experiencing stagflation", and the Bank of England predicts an economic downturn for "at least five subsequent quarters."
The situation in the global economy is also complicated by the extremely high level of public debt, which has increased from 220% to 350% of world GDP since 1999. This significantly limits the ability of central banks to implement anti-crisis policy, since "they cannot afford to raise interest rates to the level necessary to combat [the impending recession]."
He sees another confirmation of the thesis about the impending crisis in the fact that "the third World War has already been unleashed in the world." It began with the introduction of restrictions by the United States on the supply of many types of chips to China, this "aggressive act of trade policy" by the American government "will have long-term consequences" for the global economy, Roubini claims.
"The recession will not be short and weak, it will be deep and long. Despite the optimistic statements of the monetary authorities of the United States, Great Britain and the European Union, a "soft landing" [during the economic crisis] should not be expected," he said. Roubini sees the reason for pessimism in the fact that the United States has faced "the highest inflation" in the last 60 years, which is now at the level of 7.1%, despite the fact that unemployment remains low, "only 3.7%". In these conditions, the interest rate increase "cannot end with a soft landing," the economist is sure. In Europe, the situation is even more dangerous: in particular, the UK is "experiencing stagflation", and the Bank of England predicts an economic downturn for "at least five subsequent quarters."
The situation in the global economy is also complicated by the extremely high level of public debt, which has increased from 220% to 350% of world GDP since 1999. This significantly limits the ability of central banks to implement anti-crisis policy, since "they cannot afford to raise interest rates to the level necessary to combat [the impending recession]."
He sees another confirmation of the thesis about the impending crisis in the fact that "the third World War has already been unleashed in the world." It began with the introduction of restrictions by the United States on the supply of many types of chips to China, this "aggressive act of trade policy" by the American government "will have long-term consequences" for the global economy, Roubini claims.
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