The annual Ambrosetti Forum is an economic conference that takes place each year in the Italian town of Cernobbio. It is attended by heads of state, ministers, economists and discusses pressing issues in the world economy. New York University economist Nouriel Roubini is still very much concerned with a double-dip recession. Most seem to agree on some basic problems.
- The stimulus to create demand in stagnant economies creates deficits and further debt.
- China is the engine of world growth and is dependent on exports to now struggling economies.
- The € continues to strengthen against the US$ therefore euro countries lose competitiveness.
- The US housing market – the catalyst for the the global downturn – has not recovered.
- Unemployment rates worldwide are a major concern – US 9.6%, France 10%, UK 7.8% Spain 20%, EU 9.7%
Niall Ferguson – author of The Ascent of Money – noted that since 2001 the United States has seen its debt-to-GDP ratio double to 66 per cent and that it may well be headed towards the danger zone of 100 per cent.“This is a completely unsustainable fiscal policy,” said Ferguson. “Pretty soon the US will be spending more on debt service than national security … That’s a tipping point for any global power.”
When asked to predict, several hundred business leaders came up with the following by the end of the year (approximate figures):
* 70% – predicted an increase in turnover
* 50% – predicetd an increase in investment
* 27% – predicted an increase in employing more staff
* 50% – predicted no change in staff numbers
* 23% – predicted cuts in staff numbers
For more information on this conference click here.