Friday 13 September 2002

Massive world recession to occur if Iraq attacked: Economist

Is it me or are "Geedubya & His Hawks" and "Phoney Tony & His Cronies" the only bands at this Iraq gig...? I mean everyone else on the planet seems to think that the whole thing is the worst idea in the history of bad ideas... Or did I miss the bus on that one?!?

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.

Full story...