This article talks about the World Bank's take on preparing for the next financial crisis from now, so that if a crisis is to occur, they are prepared. The World Bank has has downgraded its global growth estimates for this year to 2.8 percent from 3.2% in January.
Developing countries such as Ghana, India and Malaysia among others are being given more attention. The World Bank plans on doing so by a slow tightening of the fiscal policy and structural reforms.
China is expected to grow by 7.6 percent this year, it added, but
said this would depend on the success of re-balancing efforts by its
government. The president of the World Bank said "
"Growth rates in the developing world remain far too modest to
create the kind of jobs we need to improve the lives of the poorest 40
percent." This basically means that to end extreme poverty, developing countries need to focus more on economic growth.
Currently the only downside dispute seems to be between Russia and Ukraine, over the pricing of gas.
http://www.cnbc.com/id/101749088#.
It is important to recognize that the next recession or financial crisis could, in theory, be just around the corner. We will not be able to anticipate it as it will likely come out of the blue. I think the World Bank should be cautious about a potential financial crisis hitting soon as it is natural for an economy to correct itself every 7-10 years (roughly one business cycle). Since the last U.S. recession began in 2008, we can expect another one as soon as 2015 to 2018.
ReplyDeleteI completely agree with you and I feel that the gradual tightening of the fiscal policy will help prepare for another financial crisis. Yet, i feel like more effort should be put to make sure that another financial crisis does not occur rather than help resolve it when it does.
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