George Soros believes that a new financial crisis may soon break out. This is the fault of US President Dolnald Trump, whose actions provoke instability, and in the EU in general “anything that could go wrong went wrong”. The likely crisis was recently written by Nobel laureate in economics Paul Krugman, and the head of the IMF Christine Lagarde at the St. Petersburg Forum talked about the impending “three clouds”. The first blow, according to economists, will be assumed by developing markets and their currencies, including the ruble.
Financier George Soros said that the current global policy could provoke another major financial crisis. Europe will suffer the most from it, as well as countries with emerging markets.
According to the billionaire, the EU faced three key problems: the problem with refugees, territorial disintegration (UK withdrawal from the EU) and the austerity policy caused by the financial crisis that “hindered the economic development of Europe.”
“Anything that could go wrong went wrong,” Soros said.
The policy of the administration of Donald Trump, who destroyed the transatlantic cooperation, and also left the nuclear deal with Iran, will have a negative impact on the economy of the European Union. Emerging markets are at risk, whose currencies are threatened by devaluation (the Russian ruble belongs to this category).
These statements sound against a background of good macroeconomic statistics. The International Monetary Fund (IMF) forecasts growth in developed countries this year by 2.5%, in the next by 2.2%. The economy of developing countries will increase by 4.9% and 5.1% in 2018-2019. In general, this year the world economy is expected to grow by 3.9%.
But if you look at the data of the World Bank, the world economy has been moving for the past 40 years in a clear cycle, in which, every 7-10 years, there is a sharp slowdown in growth rates: 1975, 1982, 1991, 2001 and 2009 were crisis points, when instead of 3-5% per year growth was 0.8%, 0.3%, 1.4%, 1.9% and minus 1.7% respectively.
If we take this retrospective into account, it turns out that a new crisis can happen this year or next year.
George Soros is not the only one who talks about the likely approach of the crisis. In particular, this was recently written by a group of Western economists, as well as Nobel laureate in economics Paul Krugman.
Krugman found parallels in the current situation with the crisis of 1997-1998, which came from the Asian region. Now, too, everything can begin with emerging markets, primarily with the collapse of exchange rates. However, until he believes that something “frightening” is coming
The May survey of economists, conducted by Reuters, speaks of a 15 percent probability of a recession in the US over the next 12 months, but within 24 months it rises to 31 percent.
IMF head Kristin Lagarde, speaking at the recent St. Petersburg International Economic Forum, said that three “clouds” hung over the world economy. This is a high level of debt burden, which accumulated state and company. It is $ 162 trillion or 220% of world GDP. This is a record level, Lagarde says.