COVID-19: Leading economist warns of 10 years of depression, debt


London, May 23 (IANS): Economist Nouriel Roubini has warned of a prolonged downturn and sluggish recovery from the coronavirus.

Nicknamed Dr Doom for his gloomy predictions, Professor Roubini said there are some jobs that simply will not come back 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 foresaw 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" - what he calls 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.

"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."

His warning comes as the number of coronavirus cases globally tops five million, with many countries seeing a second wave of infections and struggling to reopen their economies - a key factor in whether economic growth can bounce back quickly.

"You can open the stores but the question is whether they're going to come back," he says. "Most of the shopping centres 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, and many 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 the one of my rival's. Therefore there is going to be a more divided world."

Roubini's moniker of Dr Doom was earned after he was famously and consistently negative on the global economy's prospects - even as the US entered a stellar decade of stock market returns.

  

Comment on this article

  • myna, mysuru

    Sat, May 23 2020

    "You can open the stores but the question is whether they're going to come back," he says. "Most of the shopping centres in China are still empty. Half of the flights aren't there. German shops are open but who wants to go and shop?" - Ask Dr Doom to visit India. His negative vibes on the economy will change. He may have to learn economics again.

    DisAgree Agree [2] Reply Report Abuse

  • Veer, Nagpur

    Sat, May 23 2020

    We have virus larger than covid-19 since 2014. This virus has been intentionally destroying indian economy systematically for its own selfish motive. Any developing economy has the potential to bounce back but in our case our present leaders have killed the hen which laid golden eggs.

    DisAgree [1] Agree [2] Reply Report Abuse

  • Save my India, India.

    Sat, May 23 2020

    Indian economy ranks top, among those large economies to be hit hard according to credible research reports, the evidence is clearly seen in the way the leaders respond to the crisis in India.
    Jai Hind!!!!

    DisAgree [3] Agree [5] Reply Report Abuse

  • Mangalurian, Mangaluru

    Sat, May 23 2020

    Our anpad leadership has made sure that we are not left out...

    ...of the 10-year depression - both economical and personal.

    On the debt, we are actually ahead...

    ...it will be a HUNDRED-year debt scene for us.

    DisAgree [8] Agree [10] Reply Report Abuse


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