The recovery of the global economy may disappoint

China’s retaliation against the information technology sector and the fact that US citizens may save more than they spend are two risk factors for the recovery of the world economyis, says Ruchir Sharma, head of emerging markets at Morgan Stanley.

“I am concerned that there is a very strong consensus that we must prepare for a major economic boom – growth estimates are still in full effect. “What could be wrong?” it’s the question that bothers me, and the bond market is starting to pose the same problem. There are two factors we need to consider now, ”says Sharma, according to Bloomberg.

A first aspect consists in the measures applied by the second economy of the planet against the big tech companies. The digital sector now accounts for about 40 percent of China’s economy, up from about 10 percent a decade ago. Thus, the restrictions imposed on the tech sector could have a significant impact on the growth of the world economy.

Meanwhile, people in the United States expect the pace of tax spending to slow, but “everyone agrees that the consumer landscape is in good shape and will be able to improve.”

A senior US central bank official says the Delta version of the coronavirus poses a threat to the recovery of the global economy.

“The problem is that when you look back over the last period, when consumers had to deal with such a situation, that is, after the Second World War, they ended up saving more than they spent. What if people decide to save more and more? At the same time, there are a lot of consumers scared of the 2008 crisis. “

Sharma adds that the global recovery could be fueled by emerging market vaccination campaigns at the moment, but there is a risk that the peak of the economic recovery will be reached much earlier than analysts initially expected.

AFP


Source: Jurnalul.ro by jurnalul.ro.

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