Tags: el erian | slower | growth | recession

El-Erian: Slower Growth Doesn't Foreshadow Recession

(AP)

By    |   Tuesday, 08 January 2019 04:21 PM

Investment guru Mohamed El-Erian contends that just because U.S. economic growth apparently has eased that doesn't mean there's a crisis ahead.

"This concept that a slowdown in the U.S. means recession or means a financial crisis — that's just wrong," El-Erian, chief economic adviser at Allianz, told CNBC.

"What happened in 2008 was very special. It's because the banking system was at risk. And the minute you put the banking system at risk, you put the payments and settlement system at risk. We're not there," he said.

He is concerned about what the rest of the world can do to the U.S. economy.

He's specifically worried about China and Germany, where "scary" data on industrial production was released Tuesday.

"U.S. leadership globally is really important because you've got to get other countries to focus on pro-growth policies," he said.

However, slower global growth is an increasing concern.

The World Bank is downgrading its outlook for the global economy this year, citing rising trade tension, weakening manufacturing activity and growing financial stress in emerging-market countries.

In a report titled "Darkening Skies," the anti-poverty agency said Tuesday that it expects the world economy to grow 2.9 percent in 2019, down from the 3 percent it forecast back in June. It would be the second straight year of slowing growth: The global economy expanded 3 percent last year and 3.1 percent in 2017.

"Global growth is slowing, and the risks are rising," Ayhan Kose, the World Bank economist who oversees forecasts, said in an interview. "In 2017, the global economy was pretty much firing on all cylinders. In 2018, the engines started sputtering."

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Investment guru Mohamed El-Erian contends that just because U.S. economic growth apparently has eased that doesn't mean there's a crisis ahead.
el erian, slower, growth, recession
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2019-21-08
Tuesday, 08 January 2019 04:21 PM
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