Rubini, who is known as Doctor Doom because of his gloomy predictions, believes that many jobs simply will not be able to be restored after the crisis.The economist, who predicted the global financial crisis in 2008, said that even if the global economy began to recover later this year, growth would be “anemic”.
“During the global financial crisis, it took about three years before we saw a sharp drop in production. Now it has happened in a few weeks in almost all sectors,” Rubini said in an interview with the BBC.
He does not believe in forecasts for a quick V-shaped economic recovery, but believes that it will rather be in a U-shaped or even L-shaped shape, which would lead to a prolonged economic depression.
In the U-shape, the economy declines significantly and then recovers, but after a relatively long period of slow or almost no growth. The L-shaped scenario is even more bleak, as it envisages the retention of weak economic indicators for a long period of time.
The main reason for the negative prognosis, according to Dotcor Doom, is the huge number of jobs lost in both rich and developing countries due to measures to curb the pandemic.
“These jobs will only be partially restored at lower pay. In addition, they will become more precarious for the average employee, and this will affect income,” Rubini said.
The economist’s warning comes amid data showing that there are now more than 5 million people infected with COVID-19 worldwide. In some countries, there is a second wave of infection, which makes it difficult to restart their economies, recalls the BBC.
“The state can shop, but the question is whether customers will return to them. We see that the Chinese malls, which were opened weeks ago, are still empty. Half of the flights are still missing. In Germany, shops are also open, but few people they shop in them “, adds Rubini.
The American economist also predicts that political tensions between the United States and China will continue to grow, and smaller Asian economies will have to choose which of the two superpowers to choose as an “ally.”
Each of the two countries will send a message to the rest of the world – either you are with us or against us. Either you will use our 5G technology, our artificial intelligence and our robots, or those of the “enemy”. Ultimately, this will lead to more greater global division, “Rubini said.
The BBC recalls that Dother Doom was often criticized for constantly predicting negative scenarios, including during the record positive “bullish” trend in US capital markets. Asked if it is true that if you predict failures and crises long enough, at some point you can’t help but be right, Rubini commented that he prefers the nickname Doctor Realist to Dr. Doom.
In 2015, everyone claimed that China was heading for an “emergency” landing, and I said it would rather be “slightly uneven.” Then I was more optimistic even than Wall Street. that I stopped a clock that showed the exact time twice a day, they just didn’t follow my forecasts carefully enough, “said the economist.