After several years of relative calm in the markets and stable growth around the world the risk of global recession has increased and continues to grow. About it reports Bloomberg referring to the statement by the economists at Citigroup Inc.
“In our view, the growth of the global economy is in a difficult position after 2-3 years of relative calm”, — quotes Agency the statement of the team of Citigroup economists led by Willem Buitenom (Willem Buiter).
The Citigroup economists noted that “the continuing weakness of the global economy related to the structural and cyclical slowdown in China and currency instability, excessive debt levels in many countries and sectors, as well as current regional and geopolitical uncertainty”.
The Agency notes that economists at Citigroup also revised its forecast for global economic growth this year in developed economies, lowering it from 2.4% (this forecast was announced in January 2015) to 1.6%. They also warned that for 2016 this figure “may become even lower”.
Team Citi believes that the global GDP growth at 2% per year the global economy can be described as a global recession.
“The last revision of global forecasts occurs because of the moderate deterioration of the prospects for developed economies, significant growth of uncertainty around them (especially in the United States) and tighter financial conditions globally,” the analysts say, emphasizing that unlike previous years, the current deterioration of the growth prospects of the global economy caused by the decline of developed economies and not in emerging markets.
According to economists at Citigroup, to avoid the global recession by using the so-called “plus Abenomics” (Abenomics plus). By this term they mean the soft monetary policy in combination with fiscal stimulus and structural reforms that include “financial deleverage”.