THE GLOBAL economy will expand only very slowly in the second half of the year, the Centre for Economics and Business Research (CEBR) predicted today.
The CEBR expects growth of about one per cent over the second six months of the year, with inflation in danger of turning negative.
Douglas McWilliams at the CEBR said: “Today the world economy is again slowing sharply. The US and China are grinding to a halt. Europe is already in recession and growth is falling.”
The report argues that Keynesian stimulus is not always an appropriate policy, but says it will be if deflation is likely; if the measures considered are temporary and reversible; if the measures fund useful activity; and if monetary measures are ineffective.
“The G20 now needs to act together to prevent deflation,” the CEBR’s report will urge of international policymakers.