|
|
 |
World GDP Is Peaking
The World Bank today issued its annual “Global Development Finance Report,” which predicts that 2007-2009 will see a reduction in the world GDP. Although the authors of the report do not use the word, their assessment hints at a crisis condition. Even if the slowing of the growth of the world economy goes smoothly, developing economies, such as Russia's, may see a “sharp and painful” slowdown.
There have been warnings for many years that the imbalances in the world economy and finances will sooner or later lead to a slowdown for the world GDP and a full-scale crisis. The IMF has several times made recommendations of measure to prevent a crisis during such a slowdown. Former U.S. Federal Reserve Board chairman Alan Greenspan, one of the world's most influential economists, recently sent shivers through world stock markets with his prediction of a “hard landing” in China.
Countless reports have predicted a scenario in which falling housing prices in the United States led to falling consumer activity; the overheated economy of China will have nowhere to export to; demand for investment goods and fuel will fall; the price of stock for producing companies and for stock in the developing world in general, where the number of defaults on debts will grow and investors will flee from to avoid the risk. The main question is how smoothly the reduction in the world GDP will occur.
The World Bank and the Russian Ministry of Economic Development and Trade agree that will have a zero balance of payments in 2009, or sooner, if oil prices fall. In addition, Russia is among the countries whose banks borrow in foreign currency and loan in the local currency, leading to “systemic risks.”
www.kommersant.com
All the Article in Russian as of May 29, 2007
|
|
|
