ECONOMIST:
Massive world recession to occur if Iraq attacked
HONG KONG, Sept 12, 2002 (Xinhua via COMTEX) -- The
Economist Intelligence Unit (EIU), which operates under the
Economist magazine, predicted that the world would suffer a
massive recession if Iraq were attacked and Middle East oil
producers protested by pushing up the oil price.
Robin Bew, the chief economist of the EIU, told Xinhua
in a written commentary Thursday, "Our forecasts assume that
the United States does attack Iraq, and that the Middle East
oil producers oppose the US action and team up to cut oil
production, and thereby, pushing the oil price to, say, 70
US dollars a barrel or more, that would deliver a massive
supply-side shock to the global economy and probably trigger
a massive recession, similar to the oil shocks in the
1970s," Bew said.
Turning to the US economy, Christopher Nailer, the
Singapore- based regional economist of the EIU, also told
Xinhua in the commentary that the current imbalance in the
US economy is severe, saying that sluggish growth is
forecast for both 2002 and 2003.
"We expect the US economy to grow only 2.4 percent in
2002 and accelerate to only 2.8 percent in 2003. This is
better than 2001 when the US economy grew only 0.3 percent,
but still very weak.
"However, the imbalance in the US economy is severe,
and we rate the possibility of a major recession - worse
than the 2001 one - within the next two years as a 30
percent probability," Nailer said.
Copyright 2002 XINHUA NEWS AGENCY
