Tue, Jan 08, 2013 - Page 14 News List

Global economy faces another weak year: Citigroup

By Camaron Kao  /  Staff reporter

Citigroup Inc yesterday expected the global economy to post another year of weak growth at 2.6 percent this year following 2.5 percent growth last year, due to the poor conditions of developed economies.

“The emerging markets are unlikely to see growth if developed economies continue to be stagnant,” Citigroup vice chairman Hamid Biglari said at an economic forum in Taipei organized by the Chinese-language CommonWealth Magazine.

Biglari said that in the next five years, developed nations would register an average growth of between 1 percent and 2 percent per year, except for the US.

While the US is expected to see its economy grow just 1.6 percent this year due to its “fiscal cliff,” the country’s political leaders would likely propose a budget reform to avoid the impending financial disaster by the end of the year, and the US is expected to post annual growth of between 3.5 percent and 4 percent by 2017, Biglari forecast.

Because of urbanization and infrastructure building, emerging markets are likely to see an annual growth rate of 5.5 percent on average, Biglari said.

With the US recovering and China and other emerging markets developing, he predicted the global economy would grow 3.1 percent next year and by between 3.5 percent and 3.75 percent from 2015 to 2017.

At the same venue, Muhamad Chatib Basri, chairman of the Indonesia Investment Coordinating Board, said his government is still in negotiations with Foxconn Technology Group (富士康) about an investment plan in the Southeast Asian country.

Foxconn is the trading name of Hon Hai Precision Industry Co (鴻海精密), which is the world’s largest contract maker of Apple Inc’s products.

“There are certain issues still under discussion, such as land usage and local partners,” Basri said at the forum.

The investment plan would help send Indonesia to a new era of industrial production, which depends not only on cheap labor, but also innovation and technology, he said.

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