Morgan Stanley Sees Global Recession Spreading to Japan, Germany
Jun 26, 2001 - 16:09:40 HKT
Quamnet News Service
Morgan Stanley Dean Witter said the global recession that was made in America has now taken its toll on the world's second and third largest economies, Japan and Germany. Collectively, these three countries account for 34 percent of world gross domestic product; 31 percent of global imports; and 28 percent of world exports.
In a note to clients today, Morgan Stanley global economist Stephen Roach said Germany, which accounts for one-third of the Euroland economy, is now in the cyclical danger zone that a Germany economy is threatening to pierce the 1 percent GDP growth threshold.
Driven by a shortfall in external demand, there can be no mistaking Euroland's outsized exposure to global trade, Roach said. "Now there are ominous signs of slippage in domestic demand, driven by the once resilient French consumer."
Globalization, which seemed to be unfolding so effortlessly in the unleg of the global business cycle, is now in trouble as the world cycle swings the other way, according to Roach. Trade tensions are mounting, and the new connectivity has spread the impacts of the US downshift surprisingly quickly to all parts of the world, he said. |
