Sino-Singapore Jingwei Client, October 30th, co-sponsored by Sino-Singapore Jingwei and China Bond Capital Market Forty Forum, "New Vision, New Economy and New Journey-China Bond Capital Market Forty Forum First Summit" on the 30th Held.
Zhu Xian, deputy governor of the BRICS New Development Bank and former deputy governor of the World Bank, said that the relatively low interest rate level is expected to remain for a long time, and the loose monetary policy around the world will remain the main theme.
Photo by Zhu Xianzhongxin Jingwei, Vice President of the BRICS New Development Bank and former Vice President of the World Bank
Zhu Xian mentioned that since the beginning of this year, the sudden epidemic has brought more uncertainty to the global economy.
Judging from the current uncertainties, according to various analysis, there are probably at least three characteristics that will be more important variables for the future economy: first, the low growth of the world economy; second, low interest rates; third, the debt leverage has increased.
He said that China resumed economic growth relatively quickly, especially in the second and third quarters.
The GDP contraction of other large developed economies in the second quarter of this year was better than expected.
But now facing the second and even third wave of epidemics in Europe and the United States, the economy may still be affected to some extent.
Regarding low interest rates, Zhu Xian said that after the 2008 global financial crisis, major economies implemented various loose monetary policies.
Before the outbreak, the impact of the financial crisis gradually subsided, and the central banks of some developed countries began to normalize their monetary policies.
The emergence of the new crown pneumonia epidemic has forced most central banks around the world to adopt quantitative easing measures again and have to implement low interest rate policies.
Zhu Xian also mentioned that since it takes longer to control the global epidemic than in the past, these unconventional economic policies may also last longer, which poses greater challenges to the fiscal and monetary authorities.
"At the beginning of the epidemic, the ammunition was basically shot out. If the epidemic takes longer, whether it is a developed country or a developing country, the epidemic will not be well controlled in the next 6 months. What kind of fiscal and monetary policy, this is a new test."
Regarding high leverage, Zhu Xian said that the epidemic has caused unprecedented financial challenges for all countries. On the one hand, economic activity has contracted and fiscal revenue has fallen. On the other hand, fiscal expenditures have increased sharply to maintain employment and social stability, so fiscal deficits continue to rise.
Low interest rates and zero interest rates have greatly reduced the government's financing costs. If economic growth rebounds, the debtor's debt ratio can be further reduced if the interest rate is low in the future.
In the face of such a macro situation, Zhu Xian predicts that relatively low interest rates will continue for a long time, and loose monetary policies around the world will remain the main theme.
Regarding the challenges and opportunities faced by emerging market economies and developing countries, Zhu Xian said that many emerging market and developing countries have generally inflexible exchange rates.
Emerging market economies also generally have problems such as relatively serious external debt burdens and greater pressure on fiscal deficits.
"To deal with the negative impact of the epidemic on the economy also means that the government's expenditure and revenue in emerging market economies will decrease and the risk of further expansion of the deficit." Zhu Xian mentioned that the uncertainty caused by the epidemic has also pushed up these countries. Even in these countries where the fundamental economy is still relatively healthy, they may suffer from phased selling.
Zhu Xian also pointed out that although developing countries and emerging market countries face many challenges under current conditions, as long as China is an example, as long as the plan is properly planned and the funds for fighting the epidemic and the people’s basic living standards are properly arranged, appropriate investment in the future The sustainable development of the country can achieve sustainable development by turning crises into opportunities.
He also predicted that the growth rate of emerging market economies and developing countries, if China is not included, is expected to be -5.7% this year.
In 2020, if the epidemic can be effectively controlled globally, the global economic growth may rebound to 5% next year. In the medium term, if a rebound occurs next year, the global economic growth rate may reach 3.5%.
(Zhongxin Jingwei APP)