The next world economic downturn is most likely to come from the U.S., Fitch Ratings' chief economist has warned. "The risk of a global recession ... the first place I would look for
that would be the U.S. and there is definitely some weakness in their
economy," Brian Coulton said at a Fitch conference in London.
As the world's largest economy, the health of the U.S. is viewed as crucial to the success of the world's economy. In July, the International Monetary Fund cut its global growth forecast for 2016 to 3.1 percent from 3.2 percent and its U.S. outlook to 2.2 percent from 2.4 percent.
A global recession is not Fitch's base-case scenario, although Coulton noted that economic growth since the financial crisis of 2007-08 had been weak. "It has been a sub-par recovery … It has been disappointing … but we haven't seen the sort of things that would drive a recession," he said. Coulton said any contraction in the U.S. would likely originate from a "significant downturn in capital expenditure in the business sector."
The economist saw more danger of negative economic spillovers from China, the world's second-largest economy, where growth has slowed steadily since 2010. Concerns about China's economic health, as well as Beijing's handling of financial markets, rocked international stocks and currencies in Summer 2015 and the beginning of 2016. "I think that (China) is probably the higher risk going forward," he said.
Source: CNBC NEWS
As the world's largest economy, the health of the U.S. is viewed as crucial to the success of the world's economy. In July, the International Monetary Fund cut its global growth forecast for 2016 to 3.1 percent from 3.2 percent and its U.S. outlook to 2.2 percent from 2.4 percent.
A global recession is not Fitch's base-case scenario, although Coulton noted that economic growth since the financial crisis of 2007-08 had been weak. "It has been a sub-par recovery … It has been disappointing … but we haven't seen the sort of things that would drive a recession," he said. Coulton said any contraction in the U.S. would likely originate from a "significant downturn in capital expenditure in the business sector."
The economist saw more danger of negative economic spillovers from China, the world's second-largest economy, where growth has slowed steadily since 2010. Concerns about China's economic health, as well as Beijing's handling of financial markets, rocked international stocks and currencies in Summer 2015 and the beginning of 2016. "I think that (China) is probably the higher risk going forward," he said.
Source: CNBC NEWS
Comments
Post a Comment