UN: US recession could cause global slowdown
The United Nations has warned that economic problems in the United States could trigger a global recession.
According to an analysis released by the UN's Department of Economic and Social Affairs, "There is a clear and present danger of the world economy coming to a near standstill. ... The domino effect of a U.S. recession would be to knock down export growth from China, Europe and Japan, in turn reducing their demand for exports from developing countries."
Chief UN economist Rob Vos told Bloomberg News that in those circumstances the world economy might not expand at all in 2009.
Australian television reports that although their own economy remains strong, banks and home buyers there are feeling the impact of the global credit crunch. The major Australian banks have been downplaying their exposure to the US subprime mortgage crisis but they are said to have a $1 billion investment in Countrywide Financial, which is rumored to be close to collapse. This has already caused them to raise mortgage interest rates.
Bloomberg has more here.
This video is from Australia Broadcasting Company, broadcast January 10, 2008.