The New York University professor that foresaw the financial crisis has warned that the global economy is facing a “perfect storm” of headwinds that will significantly slow growth around the world, according to Bloomberg. Nouriel Roubini warned at a speech in Singapore on Jun. 11 that the U.S. fiscal crunch, European debt woes, and stagnant Japanese economy following the earthquake and tsunami have created a one-in-three chance for stunted global economic growth by 2013. Roubini said, “There are already elements of fragility,” adding, “All these problems may come to a head by 2013 at the latest.”
Roubini forecast that the global economy might see slower growth in the second half of 2011 due to “deleveraging,” the withdrawal of fiscal stimulus measures, and sagging confidence. In particular, the professor warned that the U.S. could face a bond market “revolt” should leaders fail to sufficiently address the budget deficit. Roubini also highlighted the need for the rapid creation of a comprehensive plan for debt-burdened European sovereigns to avoid a “disorderly” resolution, and warned China about increased reliance on fixed investment.”