July 10, 2017

One More Question with Ruchir Sharma

We asked Ruchir Sharma, Morgan Stanley's Chief Global Strategist, which country was best poised for economic growth and which country presented the greatest risk to the global economy. See what he said.

 

"I think the country which has the best economic prospects on a risk/reward basis is possibly Poland. And this is a bit of a surprise choice but here's why: That over the past 25 years Poland has grown without having a single down year. And that is an extremely unusual development. And now I think that Poland is poised to become the next rich nation the classic way, which is its manufacturing its way to prosperity, and the turnaround that's taking place in the European economies is likely to lift Poland along with it. Now as far as the country which I think poses the biggest risk to the global economy, it's possibly China. And that is because China has taken on a lot of debt over the past few years. In fact no developing country has taken on as much debt as China has done over such a short time horizon in the entire history of economic development that I know. And there will be a payback time for this, and the problem is that what happens in China doesn't remain in China. It matters to the rest of the world. And the single biggest predictor of economic slowdowns and financial crises historically has been a rapid expansion of debt. And so therefore I think China faces the kiss of debt in the coming few years. "

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