World Economy 2012 To Experience Below-Trend Growth: U.S. Economist

BANGKOK, January 12 (TNA) - A leading U.S. economist says the world economy is likely to experience below-trend growth in 2012, as the world now returns to its normal phase of uncertainty. Describing the global financial system as still reeling to the point of recovery, Harvard University Professor Dr. Kenneth S. Rogoff told a seminar in Bangkok on Wednesday that the world public debt now remains at an all-time high. Rogoff cautioned that most global advanced economies, in particular, should be affected by the high debts or “debt overhang” for a longer period of time in terms of their slow growth, coupled with a record high of their unemployment figures in the post-WWII period. Rogoff also warned of impacts from a large amount of capital inflows in emerging Asian markets in terms of a possible “boomerang effect” over the next four to six years when economic growth of the world most powerful countries pick up again. Turning to Southeast Asia, the leading U.S. economist said that the 10-member Association of Southeast Asian Nations (ASEAN), including Thailand, and its three key dialogue partners in East Asia, namely China, Japan and South Korea, hold great economic potential in integrated future trade with free mobility of labour, noting that flexibilities along the border are key to regional success. In case of Thailand, where there are smaller population compared to other neighbouring countries in the region, the U.S. professor acknowledged the Thai private sector will further benefit from the liberalization of the regional labour market. The seminar, entitled “Economic Outlook 2012 – Is This Time Different?” and organised by Thailand’s Kasikornbank Group, was attended by Governor of the American Chamber of Commerce in Thailand Kenneth White, World Bank Lead Economist Mathew Verghis, Chief Representative for Thailand, Cambodia, Laos and Myanmar of the Japan Bank for International Cooperation (JBIC) Hiroshi Hanaoka and delegates of regional state and banking sectors. (TNA)