CITI: China is about to pull everyone into a 2-year ‘global recession’…(Depression!)
Mike Bird
BusinessInsider.com
Sept. 10, 2015
Economists at Citi put out a scary research note this morning, laying out their views on the Chinese economy and how it’ll affect the world.
Chief economist Willem Buiter now thinks the most likely scenario is one in which China tugs the world into a “global recession.”
He and Citi are not defining a global recession as an actual drop in world output — they mean “an extended period of excess capacity: the level of potential output exceeds the level of actual output.”
More simply, it means more people are out of work than needed. Global GDP would grow at about 2% or less per year for a couple of years.
To put that in perspective, GDP has grown by less than 2% only one year during the 21st century — 2009, when the full effect of the global financial crisis came crashing down and total global output actually fell.
For starters, Citi thinks China’s true real GDP growth rate is more like 4%, or even lower, not the 7% or so that the Chinese government reports. Their “global recession” call suggests that growth will dip to just about 2.5% by the middle of 2016. China’s growth hasn’t been lower than that since 1976, when Chairman Mao was still alive.
The Rest…HERE
Read more: http://uk.businessinsider.com/citi-a-two-year-global-recession-coming-2015-9#ixzz3lLxGPL1p
