The Hush Post| 9:51 am| one-minute-read|
Noted economist Nouriel Roubini has warned that Corona Virus could lead to a worldwide sluggish economic recovery.
Nicknamed Dr Doom for his predictions, Professor Roubini said that some jobs will simply not return after this crisis, the BBC reported on Friday.
Even if the global economy recovers this year from the impact of the coronavirus, it will be “anaemic”. He warned of “unprecedented” recession. Professor Roubini in the one who had forecast the financial crisis in 2008 before many others.
“During the global financial crisis, it took about three years until output fell sharply,” he told the BBC`s Talking Asia programme from his home in New York. “This time around it didn`t take three years, not even three months. In three weeks there was a freefall of every component.”
Roubini also said any recovery will be in the shape of what economists call a “U”, or even “something closer to an L.” He calls this a “Greater Depression”. A U-shaped recovery means that growth will fall and bottom out, and then pick up only after a prolonged period of slow or no growth.
An L shaped recovery is even more drastic – falling sharply and staying there for an extended period of time. That`s because of how many jobs have been lost in both rich and poor countries as a result of massive lockdowns to combat the virus.
Jobs are going to come back only in part
“These jobs that are gone are going to come back only in part, with lower wages, no benefits, part-time,” he said. “There will be even more insecurity of jobs and income and wages for the average working person.”
“You can open the stores, but the question is whether they’re going to come back,” he says. “Most of the shopping centers in China are still empty. Half of the flights aren`t there. German shops are open but who wants to go and shop?”
Emerging Asia though will see better growth than “other advanced economies.”
But there will be a greater split between the US and China. Asian countries will be forced to choose between the two superpowers.
“Each one of them is going to say to the rest of the world, either you are with us or against us,” he says. “Either you use my AI systems, my 5G, my technologies, my robotics, or you are using one of my rivals. Therefore, there is going to be a more divided world.”