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He indicated that the economic slowdown in the United States, and in particular the slowdown in the property market, was bound to affect growth but should not lead to a recession, thanks notably to businesses' sound financial footing, sustained growth in the emerging countries and the reactivity of monetary policy. He also reviewed the economies of Europe, Japan, China and India.
In the Euro Zone, despite financial conditions which remain favourable to investment, a boom in consumption and sustained external demand, numerous structural problems have still to be resolved: the drift in public finances, reforms of the goods and services market as well as of the job market.
In Japan, the economic upturn is continuing at a moderate pace. The Yen should become progressively stronger against the Dollar. However, the vital clean-up of public finances has still to be carried out.
As regards to China, the economy's potential remains enormous with solid growth of more than 10%, controlled inflation and a strictly-regulated exchange rate. In the realm of external finances, China has become one of the leading players in terms of official reserves. However, special attention must be paid to the growing commercial and social tensions, the recent acceleration in credit, and to the higher prices of raw materials which make businesses more vulnerable.
India is developing in very favourable business conditions: growth has now reached 8%, and demand is strong. India remains relatively distanced from international financial fluctuations. A few weaknesses should however be noted: the continued high growth in credit, the increase in the budgetary deficit, insufficient savings, and the deepening of the external deficit.
For more information, consult Philippe Arvisenet's support document (3,466 Mo).
* Head of Economic Research at CIB – Corporate and Investment Banking
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