Roubini: Global Economy Worse Off Than in 2008

Friday, 02 Sep 2011 07:21 AM

By Forrest Jones


The world's developed economies are in worse shape than they were in 2008 due to shaky financial sectors and calls for economic austerity rather than stimulus, says New York University Professor Nouriel Roubini.

The U.S. economy, meanwhile, stands a 60 percent chance of falling back into recession, says Roubini, who accurately called the Great Recession way before it happened.

"We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious," Roubini says, according to CNBC.

Nouriel Roubini
(Getty Images photo)

Forward-looking economic indicators show business and consumer confidence is down across developed world and show tough times await.

"The hard economic data (which has come out recently) is all relevant to July while the soft data which has come out is for the future and that’s all moving in the wrong direction," Roubini says.

Europe, at least, may avoid a new recession, the Standard & Poor's ratings agency says

"Although most of Europe experienced a slowdown in GDP growth in the second quarter, we still anticipate that the region will escape a genuine double-dip recession," S&P says in a research note, according to the AFP newswire.

Some experts say the U.S. never really emerged from the recent recession and point out faulty economic indicators allow politicians to claim recovery that never occurred.

"It has been our contention for some time that we never really emerged from the recession of 2008," Bert Dohmen, founder of Dohmen Capital Research Institute, an economic and investment research firm, told Moneynews.

"If you correct the GDP numbers with the right number for inflation, we are right now in a serious contraction of the economy again."

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