No full decoupling from west, says economist
KUALA LUMPUR: The outlook for the global economy is not good, according to Nouriel Roubini, chairman of Roubini Global Economics.
There is a possibility of another recession in the world’s largest economy, the United States, he said and in Asia, in particular China, the world’s fastest growing economy, a derail in growth could be on the cards should there be continued weakness from Western economies.
“There is no full decoupling from the West,” he said at a panel discussion the symposium here yesterday.
Earlier, Roubini, known worldwide for his pessimistic economic views, told reporters on the sidelines of the conference that US June housing data was “awful” and did not rule out a double-dip recession there.
Current US financial reforms were not enough and would not prevent additional crises, he told CNBC.
The US unemployment rate remains high at almost 10% and is hurting consumer spending, a major economic booster.
Roubini said emerging economies would probably have to depend on domestic demand to spur growth even as developed nations strived to cope with the effects of earlier austerity measures implemented in their countries, aimed at bringing down high debt levels.
On the ongoing issue of pressure from the United States on China to allow the yuan to appreciate, the economist who is also professor at New York University said China could afford a strong currency without suffering negative economic effects.
“China is a country that has productivity growth and excess of wage growth – it can afford an appreciating currency without the negative effects on economic growth,” he told CNBC.
The United States had said that China, a major market player was keeping the yuan “artificially weak” in order to make its goods more competitive.
But China said that allowing its currency to appreciate by 20% to 40% could bankrupt many of its export-based firms.
Separately, Roubini said the US dollar would remain the major currency for some time given the unavailability of a suitable alternative.
MyView
Outlook for the largest economy in the world is NOT GOOD. So far, the PONZI Scheme was covered up, but not for long (give it another year max). Nothing was address on the problem, overgearing & overspending & overderivatives.
Only way out is CUT on Expenses, either you do it now or wait, it only gets bigger. So far, about 2,000 Hedge Funds in USA (about 15% of the total)goes belly up.
KUALA LUMPUR: The outlook for the global economy is not good, according to Nouriel Roubini, chairman of Roubini Global Economics.
There is a possibility of another recession in the world’s largest economy, the United States, he said and in Asia, in particular China, the world’s fastest growing economy, a derail in growth could be on the cards should there be continued weakness from Western economies.
“There is no full decoupling from the West,” he said at a panel discussion the symposium here yesterday.
Earlier, Roubini, known worldwide for his pessimistic economic views, told reporters on the sidelines of the conference that US June housing data was “awful” and did not rule out a double-dip recession there.
Current US financial reforms were not enough and would not prevent additional crises, he told CNBC.
The US unemployment rate remains high at almost 10% and is hurting consumer spending, a major economic booster.
Roubini said emerging economies would probably have to depend on domestic demand to spur growth even as developed nations strived to cope with the effects of earlier austerity measures implemented in their countries, aimed at bringing down high debt levels.
On the ongoing issue of pressure from the United States on China to allow the yuan to appreciate, the economist who is also professor at New York University said China could afford a strong currency without suffering negative economic effects.
“China is a country that has productivity growth and excess of wage growth – it can afford an appreciating currency without the negative effects on economic growth,” he told CNBC.
The United States had said that China, a major market player was keeping the yuan “artificially weak” in order to make its goods more competitive.
But China said that allowing its currency to appreciate by 20% to 40% could bankrupt many of its export-based firms.
Separately, Roubini said the US dollar would remain the major currency for some time given the unavailability of a suitable alternative.
MyView
Outlook for the largest economy in the world is NOT GOOD. So far, the PONZI Scheme was covered up, but not for long (give it another year max). Nothing was address on the problem, overgearing & overspending & overderivatives.
Only way out is CUT on Expenses, either you do it now or wait, it only gets bigger. So far, about 2,000 Hedge Funds in USA (about 15% of the total)goes belly up.
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