© Charles Robertson
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I do not have a big reason to disagree with it, as the Eurozone economy is still weak, the U.S is expected to grow 2% this year. The one I disagree with is the IMF the outlook for China. We forecast that China's growth will be 7,5% this year and 7% next year. It is very hard to see how China, which is now more than 8 trillion dollars of GDP, can carry on going at 8,5% or more, that is just too big. The world does not have enough resources to keep up with that sort of growth rate. Therefore, I think it becomes self correcting and China's growth will be slower.
Which country do you think will be able to lead the world economy to more sustainable growth?
None of the countries will lead the world economy. China is obviously still playing a big role. It is going to add about a trillion dollars of GDP this year, with the world economy being just over 60 trillion. Thus, nearly 2% of the world growth is just the China's story. However, what is interesting about the world is how growth has diversified. Currently, Africa is of big focus for us. We are very impressed by 6% growth in Sub Sahara that has been achieving since the year 2000. The IMF's forecast for the region is still 5% even in this weak year. Elsewhere, Latin America seems to be getting back on its feet lead by Brazil. To our mind,Russia's economy will expand 4% this year, while Nigeria - 7%. To sum up, the growth seems coming from everywhere, except for the Euro block.
It is assumed that China's economy will overtake the US by the end of 2016. To your mind, is there possibility that it may become the world's biggest economy sooner than expected?
I believe that it will not happen that quickly. Adding trillion dollars a year : it is going to take at least seven or eight years before it can begin to outperform the United States. Hence, 2020 would be closer to what we think is likely. Besides, at the same time there would be an interesting transition to democracy that we believe could take place by 2023. The good news is that it is not going to destabilize the world economy.
To your mind, will the recently implemented measures in Japan be able to pull the country out of the recession?
It is very hard to see any reason to be optimistic about Japan. According to the IMF's estimates, the public debt is around 230% of GDP, which is nearly twice as bad as in Greece or Italy. The demographics is another problematic issue, which is constantly aggravating. On top of that, the number of workers per pensioner is going to drop below 2. I think there were 2,6 workers per pension-aged person in Japan in the year of 2010, and now the forecasts show that it is going to drop to 1,9 by 2020. We have never seen any country with such pessimistic demographic numbers. Hence, it stands to reason that the sentiment for Japan's economic growth will maintain fairly negative in the long-run.
If the U.K. decides to exit the European Union, do you think it will have a substantial impact on Europe's recovery?
I believe that it will not as there is no chance of that happening.