Thursday, April 29, 2010

Roubini : Advanced Economies to grow slower

Nouriel Roubini, Co-Founder & Chairman,of RGE Roubini Global Economics, interviewed by the EconomicTimes of India
Roubini :"in my view, the growth is going to look better in US and also advanced economies in the first half because of a number of temporary factors: the fiscal stimulus, restocking of inventories, base effects in US, the government temporarily hiring immigrant workers to do a census that they do every 10 years, a series of tax policies like cash for clunkers on cars and tax credit for homebuyers and so on. So those are all affects that are going to fizzle out by the second half of the year and I see the weakness of the US household sector keeping the consumption growth weak overtime given that income growth is anaemic, labour income growth is anaemic and wealth relative to income is no low compared to the past. That implies that the private demand does not recover fast enough and the policy affects phased out, then you could have growth falling back towards 1.5% to 2%. It is well below a potential 3%. "

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