- HONG KONG (Xinhua
via COMTEX) -- The Economist Intelligence Unit (EIU), which operates under
the Economist magazine, predicted that the world would suffer a massive
recession if Iraq were attacked and Middle East oil producers protested
by pushing up the oil price.
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- Robin Bew, the chief economist of the EIU, told Xinhua
in a written commentary Thursday, "Our forecasts assume that the United
States does attack Iraq, and that the Middle East oil producers oppose
the US action and team up to cut oil production, and thereby, pushing the
oil price to, say, 70 US dollars a barrel or more, that would deliver a
massive supply-side shock to the global economy and probably trigger a
massive recession, similar to the oil shocks in the 1970s," Bew said.
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- Turning to the US economy, Christopher Nailer, the Singapore-
based regional economist of the EIU, also told Xinhua in the commentary
that the current imbalance in the US economy is severe, saying that sluggish
growth is forecast for both 2002 and 2003.
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- "We expect the US economy to grow only 2.4 percent
in 2002 and accelerate to only 2.8 percent in 2003. This is better than
2001 when the US economy grew only 0.3 percent, but still very weak.
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- "However, the imbalance in the US economy is severe,
and we rate the possibility of a major recession - worse than the 2001
one - within the next two years as a 30 percent probability," Nailer
said.
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