Grim outlook for Davos forum
TEXT OF STORY
Bob Moon: Sorry to beat this dead economic horse, but we’ve got no choice but to pass along what we’re getting. The World Economic Forum is counting down to its annual gathering in Davos, Switzerland in a couple of weeks. And its advance report on the economic outlook for 2009 will come as no surprise. From London, Stephen Beard reports the outlook is grim.
Stephen Beard: Widening budget deficits, a further collapse in property prices and a big rise in unemployment. The World Economic Forum says that’s what we can look forward to this year.
One major concern is China. The Forum says China could suffer a hard landing in 2009. The country could be forced to spend its huge reserves at home to create more jobs.
Economist Andrew Hilton says that could be bad for rest of us. Most western countries, and especially the U.S., need to borrow a lot more money this year:
Andrew Hilton: If the U.S. government intends to sell $2 trillion worth of government paper in 2009. Somebody’s going to have to buy that. And we’ve counted on the Chinese to buy western government paper. If it doesn’t, we’re in trouble.
The Forum also warns of the cost of climate change, forecasting food shortages due to drought and flooding.
In London, this is Stephen Beard for Marketplace.
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