Uh-oh!Dr. doom isn’t sounding a little… positive.
He was on Bloomberg Surveillance today. You can watch the video here. This partial transcript was provided to us by Bloomberg:
Roubini on whether he’s bullish on the United States:
“In the long term, I think that the fundamentals of the U.S. are a lot stronger than other advanced countries. In the short run I think we will have another year of very anemic economic growth. Next year we will have barely 1.7% including a modest amount of fiscal drag and lots of tail risk could make it worse in the U.S–bigger fiscal cliff, the euro zone crisis, a Chinese hard landing, maybe tensions will raise oil prices in the Middle East–so the downside scenario is actually having a meaningful probability.”
On whether he’s convinced there’s a U.S. housing recovery:
“I do believe there is a housing recovery but I think that those that are more optimistic about it are going to be proven wrong next year. Housing can increase say 10 to 15% in real terms of residential investment but at the peak it was 6% of GDP, right now it’s only 2% of GDP, so the direct effect on GDP growth is going to be very small.”
On what he’s encouraged by in the U.S. economy:
“There are some positives. There’s a housing recovery, shale gas revaluation, some reshoring of manufacturing, some job creation, QE3 is going to help. But even in a scenario where we avoid the cliff, we expect there will be a fiscal adjustment of 1.4% of GDP next year…My best scenario for the U.S. is 1.7% growth for next year…”
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