World GDP growth will fall: economist
KARACHI: Managing Director and Chief Economist, Deutsche Bank AG Group, Dr Norbert Walter has projected interest rates will rise further in the world, asset prices will fall and GDP growth will weaken, creating stagflation.
Addressing at the Institute of Bankers Pakistan here on Monday on the topic of ââ¬ÅWorld economy - longest ever recovery about to end,ââ¬Â he said hard-landing of Chinaââ¬â¢s economy could end the boom in commoditiesââ¬â¢ markets and spark sell-off in emerging equity markets.
The present Middle Eastern crisis would lead average oil prices to US$70 per barrel in 2006 and $65 in 2007, he said. ââ¬ÅThe market is highly vulnerable to potential terrorist attacks or an attack on Iran,ââ¬Â he added.
He said the US dollar continued to be the number one currency of the world and the euro would stand at second place. However, he said, the US interest rates had reached ââ¬Ånear their peakââ¬Â and the US economy was ââ¬Åabout to stutter and the party is over.ââ¬Â
According to him, most of the central banks were not willing to take the risk of investing in euro because they lacked the knowledge and expertise of taking and managing currency risks. ââ¬ÅThese are testing times for many central banks as they try to find a balance between price stability and growth,ââ¬Â he said.
Dr Norbert Walter said higher oil prices and economic slowdown in the US had impacted the Asian growth rate and it would continue in coming months if both the factors remained in place.
He said the recent increase in interest rate by the Bank of England surprised everybody in the world financial markets as it was unexpected. According to him, Bank of Japan, the Japanese central bank, was also likely to raise rates modestly.
He said the eurozone was facing low potential growth rate due to various reasons. These were low birth rate, immigration slowdown, low research and development expenditure in many European countries, rigid labour markets, bloated social security systems and rigid market structure. Earlier, Chief Executive IBP Mohammad Saleem Umer welcomed the guest while Deputy Governor State Bank Mansur-ur-Rehman summed up the discussions.
KARACHI: Managing Director and Chief Economist, Deutsche Bank AG Group, Dr Norbert Walter has projected interest rates will rise further in the world, asset prices will fall and GDP growth will weaken, creating stagflation.
Addressing at the Institute of Bankers Pakistan here on Monday on the topic of ââ¬ÅWorld economy - longest ever recovery about to end,ââ¬Â he said hard-landing of Chinaââ¬â¢s economy could end the boom in commoditiesââ¬â¢ markets and spark sell-off in emerging equity markets.
The present Middle Eastern crisis would lead average oil prices to US$70 per barrel in 2006 and $65 in 2007, he said. ââ¬ÅThe market is highly vulnerable to potential terrorist attacks or an attack on Iran,ââ¬Â he added.
He said the US dollar continued to be the number one currency of the world and the euro would stand at second place. However, he said, the US interest rates had reached ââ¬Ånear their peakââ¬Â and the US economy was ââ¬Åabout to stutter and the party is over.ââ¬Â
According to him, most of the central banks were not willing to take the risk of investing in euro because they lacked the knowledge and expertise of taking and managing currency risks. ââ¬ÅThese are testing times for many central banks as they try to find a balance between price stability and growth,ââ¬Â he said.
Dr Norbert Walter said higher oil prices and economic slowdown in the US had impacted the Asian growth rate and it would continue in coming months if both the factors remained in place.
He said the recent increase in interest rate by the Bank of England surprised everybody in the world financial markets as it was unexpected. According to him, Bank of Japan, the Japanese central bank, was also likely to raise rates modestly.
He said the eurozone was facing low potential growth rate due to various reasons. These were low birth rate, immigration slowdown, low research and development expenditure in many European countries, rigid labour markets, bloated social security systems and rigid market structure. Earlier, Chief Executive IBP Mohammad Saleem Umer welcomed the guest while Deputy Governor State Bank Mansur-ur-Rehman summed up the discussions.
