With the eurozone affected by the ongoing sovereign debt crises, the US faced with debt concerns after losing its AAA credit rating, and Japan still suffering from the consequences of March’s earthquake, the global economy is threatened by the risk of another recession, according to a new report.
Business Monitor International (BMI) has released the latest special report, “Market Meltdown: Global Economy On The Edge” assessing the ongoing financial market meltdown, and evaluating the major risks to the world economy.
On August 5 2011, Standard & Poor’s (S&P) lowered its long-term sovereign credit rating for the United States to AA+ from AAA, while maintaining a negative outlook. Prior to S&P’s announcement, the release of Q211 GDP data and revisions to the GDP series going back to 2010 had a significant impact on the US economic outlook.
The report focuses on the recent market developments, outlines revisions to BMI’s growth forecasts and provides insight into the US ratings downgrade. Furthermore it examines a possibility of a double-dip scenario considering potential downside risks to US economic recovery.
BMI analyses eurozone debt crisis in terms of financial market strategy, the outlook for European banking sector and potential political and geo-political implications of the likely outcome scenarios. Considering market scepticism over the sustainability of the eurozone, the current crises represent the biggest test for European institutions since the collapse of Yugoslavia in the 1990s.
Moreover “Market Meltdown: Global Economy On The Edge” assesses the contagion risks of the eurozone and US crises for Asia; from banking sector exposure, and the stress on existing fiscal weak links in Asia, to the effect of dollar crisis risks to the China’s economy and the entire region and the impact of potential disruption in global trade flows.