Donald Trump's “protectionist tendencies”, a probable mismanagement of China's deleveraging, and “spooked central banks” putting the brakes on rate cuts, are the three events which could derail economic growth momentum being witnessed across the globe, according to IHS Markit's chief economist Nariman Behravesh.
"Left to its own devices, this economy has momentum to go at least a year or two," Behravesh told BloombergQuint on the sidelines of the World Economic Forum in Davos, Switzerland. "Compared to a year ago, the momentum is stronger and, more importantly, it is broad-based," he said.
However, risks start to increase in the long term. Eventually inflationary pressures would build up and cause imbalances in the global economy as is the case at the end of any cycle, Behravesh explained.
Also Read: The Global Economy Is Doing Just Fine, But The Davos Elite Is Worried
He does not see rising crude oil prices, which are near a three-year high, as a danger to global growth. Crude prices up to $70 a barrel are not “seriously damaging” but anything close to the $100 a barrel mark could post a risk, the IHS chief economist said. That scenario is highly unlikely, though, as production in the U.S. has already started to rise, he added.
Behravesh called for the political leaders at Davos to emphasise on working together rather than against each other. "That is the hope, that the whole spirit would be one of co-operation and co-ordination," he said.
Also Read: IEA Prediction of Explosive U.S. Oil Growth Stokes OPEC Fears
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