Flying on one engine, global growth exposed to turbulence
Friday September 28, 2018 13:51
PARIS (Reuters) - With growth in many European, Asian and emerging markets mostly uninspiring, the United States is increasingly the main motor behind the global economy.
The world's biggest economy is under scrutiny, however, as its current upturn is running on
borrowed time coming the fiscal stimulus of debt-financed tax cuts.
''When the downturn in the U.S. economy starts, the effects (on share prices, interest rates, capital flows, emerging countries, exchange rates, global trade and global growth) will be very pronounced,'' Natixis chief economist Patrick Artus wrote in a research note this week.
''This downturn in the U.S. economy is inevitable as the United States is returning to full employment.''
The only question, he said, was when it would come, and in his opinion that would be sooner than later.
Though sanguine about the U.S. outlook through the end of the year, Barclays conceded it would be harder to predict further out.
''This fiscally induced expansion will be difficult to sustain in the absence of a much more substantial jump in investment to lift the economy's growth potential,'' the British bank's economists wrote in a research note.
''In the absence of such a jump, the economy will face heightened risks of a hard landing in 2020,''they said.
Originally Posted by WYATT EARP
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