Swirling turmoil in Egypt will likely spread to other regions of the world and may impart a negative effect on economic growth and contribute to higher consumer prices, according to Nouriel Roubini, chairman of Roubini Global Economics.
Speaking to CNBC, the well known “Doctor Doom,” told CNBC: There's already political contagion from Tunisia to Egypt… geopolitical risk is on the rise. It has a negative effect on growth or rising inflation. All this is not good.
Roubini also said that similar anti-government protests might spread to India, Pakistan, China, even in Latin America where a regime such as Chavez's may be challenged, he added.
The price of food is rising around the world, the price of oil is rising, in many countries this is a shock to income, he noted.
However, Roubini cautioned it was too early to say that the problems in Egypt will sink the world into another recession.
Even if in the past recessions have been associated with oil price shocks caused by geopolitical risk… we're not yet there but rising oil prices, risk aversion, these are all negative for the markets, he said.