The American expert, Nouriel Roubini, painted a bleak picture of the future of the global economy, and believed that the current situation could be worse than it was in the 2008 crisis.

And he saw in an interview with the Swiss newspaper "Le Temps" that the components of the crisis today are very high, with high levels of inflation and the risk of recession and the debt crisis, and he also expressed his belief that there are many risks that endanger the future of humanity, presenting a vision of how to escape from them.

Some of these risks, according to Roubini, are:

  • population aging.

  • Geopolitical tensions.

  • Climate change.

  • The first of these risks is debt, "because of which our societies are collapsing".

Nouriel Roubini is best known for predicting the 2008 major global financial crisis, and Roubini has been called "Dr. Disaster" for predicting many economic crises.

What about the debt crisis?

Roubini said that the share of private and public debt relative to GDP has exploded. In 1970 this share was less than 100%, but in 2019 it reached 200% of GDP, and 350% in 2022.

He added that in the West "we are not happy with inflation," but in poor countries the problem is more serious, as it can cause famine, as it faces a shock in food commodity prices and has an already high level of debt, however, to combat inflation central banks must raise interest rates. If it wants to prevent the price of its currency from collapsing, because if that happens it will increase the real cost of the debt contracted in a foreign currency, and these mechanisms can multiply the negative impact on some of these countries.

For its part, the newspaper pointed out that the warning signs are already clear in some markets, especially in emerging countries, and he said that the International Monetary Fund and the World Bank officially estimate that 60 to 80 emerging or developing countries - even the poorest countries - will face serious problems in debt servicing. Whether insolvent or not, indicating that this crisis will have to find solutions, as some public financiers have already agreed to freeze loans.

Regarding the period during which the debt crisis could explode and cause chaos in the global economy, Roubini said that if there is a moderate and rapid recession, it will be avoided - and then avoid the major global crisis - as the economy slows down, inflation decreases, and the "US Federal Reserve" and the central bank control. European interest rates in the middle of the year.

"If inflation continues, we will face two scenarios, either we will continue to fight it and cause an economic and financial collapse, or we will give up facing it and find ourselves facing a state of stagflation," Ronneby added.

Is the crisis of 2008 repeated?

Roubini says that the situation could be worse than it was then, in 2008 we had real estate debt and a problem in the banking system, but we found ourselves in a deflationary situation that is easy to confront with monetary and fiscal policy aimed at stimulating credit, but today we are entering a recession of by raising interest rates.

And the American expert adds: Today we have worse than in the seventies, with the continuous supply shocks, and worse than the 2008 crisis because the debt has become higher.

How do we avoid this crisis?

Roubini asserts that once the causes of the crisis occur, you cannot avoid it. On the other hand, you can try to limit its impact and repercussions, indicating that in 2008 it was too late, because the responsible bodies should have intervened early.

He believes that the components of the crisis today are very high with inflation, the risk of recession, the debt crisis, the tense geopolitical context, as well as the difficult situation of central banks, which if they raise interest rates with the aim of reducing inflation to 2%, they cause a financial collapse that leads to stagnation, and if they do not do so, it will continue. rising inflation.

Is growth what we need in this period?

The American expert says that this is the whole point, because the problem is that when there is a high debt ratio with high interest rates as well, it is very difficult to achieve growth, because we lose the ability to invest.