Tags: Nouriel Roubini | U.S. growth | China | economy 2012

Roubini: 2012 To Be a Bumpy Ride

Friday, 16 Dec 2011 10:40 AM

Next year will be a bumpy, unbalanced ride for the global economy, with Europe sinking into recession, the U.S. growing at a snail's pace and China coming in for a crash landing, says New York University economist Nouriel Roubini.

"The outlook for the global economy in 2012 is clear, but it isn’t pretty: recession in Europe, anemic growth at best in the United States, and a sharp slowdown in China and in most emerging-market economies," Roubini writes in a Project Syndicate column.

As bigger counties deleverage, some countries like the U.S. are able to weaken their currencies with the aim of making their exports more attractive, thus fueling growth in one area of the economy while the weaker areas trudge along amid deleveraging.

Not only does such a policy take time, it doesn't work for long from a monetary point of view and only creates trade disputes with other countries.

"Restoring robust growth is difficult enough without the ever-present specter of deleveraging and a severe shortage of policy ammunition. But that is the challenge that a fragile and unbalanced global economy faces in 2012. To paraphrase Bette Davis in All About Eve, 'Fasten your seatbelts, it's going to be a bumpy year!'"

Other experts agree that after decades of borrowing and spending, deleveraging will continue in 2012, fueling more volatility.

"The global markets in 2011 have played out consistently with our expectations and as we look ahead to 2012 we anticipate continued volatility, especially as Western democracies reconcile the need for austerity with the need to support economic growth and provide for rising outlays on entitlements," says Russell Investments Chief Investment Officer Pete Gunning in a 2012 outlook statement.

 "However, we do expect to see more clarity around the impacts of the proposed solutions to this year’s headline-dominating policy issues globally."

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Next year will be a bumpy, unbalanced ride for the global economy, with Europe sinking into recession, the U.S. growing at a snail's pace and China coming in for a crash landing, says New York University economist Nouriel Roubini. The outlook for the global economy in 2012...
Nouriel Roubini,U.S. growth,China,economy 2012
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2011-40-16
Friday, 16 Dec 2011 10:40 AM
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