Nouriel Roubini: Growth of developed economies is weak with fiscal pressures in Eurozone

The growth in the developed economies will be weak, there will be a U-shaped recovery, and the emergent markets will witness a V-shaped recovery, economist Nouriel Roubini told the 2010 Financial Forum in Bucharest on Wednesday.

He said that the world was divided and had a couple of dimensions. The first one refers to the developed economies growth, which will be weak, a U-shaped recovery. The emergent markets will witness a V-shaped recovery. On a medium-term period, I can see very good perspectives for South-Eastern Europe. Still, here there will be limitations, said Nouriel Roubini.

The American economist also said he was skeptical about the Eurozone evolution. He said he was skeptical about the Eurozone and there would be various recovery speeds. The developed economies are taking care of the Eurozone prospects, a zone which witnesses fiscal pressures. As for the future of Japan and the Unites States, he voiced his optimism.

As for the second dimension of the world economy analysis, Nouriel Roubini pointed out that in the first half of the year, the developed economies would have a better evolution. In respect of the second dimension, the first half of the year looks better for the developed economies. In the first half of the year the US growth will be 3 percent, but it will drop under 2 percent in the second half of the year.
In the second half of the year, the fiscal incentive will become a drug. Readjustments will be made in order to generate economic growth, Roubini said. Nouriel Roubini is Professor of Economic Sciences and International Affairs at the New York University’s Stern School of Business.

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