Political Unrest Around The World is Threatening the Global Economy

  on Jun 18,2012 Posted in International
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The global economy is facing huge political challenges and may be moving toward recession. This is sure to add stress to the G20 summit held in Mexico this week. The kind of global recession facing world leaders was last seen in the 2007-09 financial crises.

The managing director of the Institute of International Finance, Charles Dallara said “The world is facing some very difficult times, economically and financially, socially and politically”, “We need once again a global coordinated approach.”

The G20 summit represents more than 80 percent of world economic output, with the participation of 20 industrialized and developing nations’ leaders. They are all expected to coordinate their efforts to battle budget deficits at a meeting in Los Cabos, Mexico, on Monday and Tuesday.

The prevailing gloom among politicians over the spending of more than $1 trillion to help stimulate growth, might be a preview for a slowdown in the growth of the global economy. The political turmoil in Egypt, violence in Syria, and a leadership change in China are creating political differences over the shape of future global economy. There are a lot of differences in U.S. Congress over fiscal policy concerning global politics.

If the same turbulence prevails in the financial markets, the only calm might come from the efforts of central bankers to inject emergency cash, which central bankers stand ready to deliver in case financial market stress becomes extreme after Sunday’s election in Greece. The overall economic figures show a slowdown in the global economy and the vulnerability of world’s major economies.


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