Global Economic Collapse Prediction For 2017
From instability in Greece to energy technology, the stories to watch this year The world will face economic challenges on multiple fronts in 2016. As the U.S. Federal Reserve begins its monetary tightening, Europe is struggling to manage migrant and debt crises, China’s financial stability is in doubt, and emerging economies are increasingly fragile. The global economy “could be doing much worse,” writes the Harvard economist Kenneth Rogoff, who is a senior fellow at the Council on Foreign Relations (CFR). Low oil prices and weak currencies are keeping the European and Japanese economies afloat, but Rogoff warns of “a slowing Chinese economy, collapsing commodity prices, and the beginning of the U.S. Federal Reserve’s rate-hiking cycle.” Emerging economies like Brazil, South Africa, Thailand, and Turkey, rather than China, will be the real sources of concern in 2016, argues U.C. Berkeley’s Barry Eichengreen. With their high levels of short-term debt, these countries are vulnerable to currency crisis, “potentially leading to economic collapse.” For CFR’s Varun Sivaram, new investments announced at the Paris climate talks are reason for optimism in the energy sector. In particular, the $20 billion earmarked for clean-energy research and development “could make it more likely for breakthrough technologies to emerge.” In the United States, meanwhile, steady GDP and job growth has been constrained by weak productivity gains, writes the American Enterprise Institute’s James Pethokoukis. Without increased productivity delivering higher living standards, the United States could face decades of “unhealthy economic populism.” Europe continues to face the risk of debt crises, writes CFR’s Robert Kahn, but the most dangerous economic risk for the continent in 2016 is “a growing populist challenge from both the Left and Right,” which could create economic-policy uncertainty and constrain policymakers. Kenneth S. Rogoff, senior fellow for economics, Council on Foreign Relations: The best thing that can be said about the global economy as 2016 begins is that it could be doing much worse. In Europe, Greece’s Syriza government—closely adhering to the advice of left-leaning U.S. economists—has flirted with pushing the Greek economy off a cliff. The country’s membership in the euro zone survived, however, even if the Greek government needlessly squandered both precious time and tens of billions of dollars. Twenty years ago, the kind of duress these countries are experiencing now would have inevitably led to financial crisis.
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Posted by Nicole Bourbaki