Advanced economies face years of anemic growth and the risk of a double-dip recession as their citizens have to cope with sluggish employment and highly indebted governments, economist Nouriel Roubini said on Monday.
A fiscal crisis in the euro zone has rattled financial markets in recent weeks as investors worry that fiscal austerity measures dictated by a $1 trillion European Union-International Monetary Fund rescue plan could stifle already hobbled global growth.
Labor market conditions will remain very weak in some advanced economies, said the economist known as Dr. Doom and most famous for having predicted the U.S. housing crisis.
Savings will have to rise faster than consumption for the coming years. That is why growth will remain anemic, Roubini, who heads U.S.-based economic consultants RGE Monitor, told attendants at a seminar in Sao Paulo.
Emerging markets will have to remove economic stimulus to prevent asset bubbles from forming, Roubini said, seeing a risk of overheating in the so-called BRIC countries, which include emerging powerhouses Brazil, Russia, India and China.
(Reporting by Guillermo Parra-Bernal and Aluisio Alves; Writing by Ana Nicolaci da Costa; Editing by Padraic Cassidy)