The US economy is doing great, there is no recession in sight
Mohamed El-Erian argues that just because US economic growth appears to have eased that does not mean there is a recession ahead.
“This concept that a slowdown in the U.S. means recession or means a financial crisis — that’s just wrong,” El-Erian, chief economic adviser at Allianz, said in a TV interview.
“What happened in 2008 was very special. It’s because the banking system was at risk. And the minute you put the banking system at risk, you put the payments and settlement system at risk. We’re not there,” he said.
He is concerned about what the rest of the world can do to the US economy.
Specifically he is worried about China and Germany, where “scary” data on industrial production was released Tuesday.
“US leadership globally is really important because you have got to get other countries to focus on pro-growth policies,” he said.
However, slower global growth is an increasing concern.
The World Bank is downgrading its outlook for the global economy this year, citing rising trade tension, weakening manufacturing activity and growing financial stress in emerging-market countries.
In a report titled “Darkening Skies,” the anti-poverty agency said Tuesday that it expects the world economy to grow 2.9% in Y 2019, down from the 3% it forecast in June. It would be the 2nd straight year of slowing growth: The global economy expanded 3% last year and 3.1% in Y 2017.
Making and Keeping America Great!