4 Sep 2009

Gloomy economic picture seen in imbalances

9:16 pm on 4 September 2009

A visiting international economics researcher says financial imbalances between countries are jeopardising the speed and strength of the recovery of the global economy.

Steven Dunaway, a research fellow with the Council on Foreign Relations of New York, is visiting New Zealand as part of an Institute of Economic Research programme.

Dr Dunaway says the global financial crisis largely sprang from the large and persistent imbalances between countries that save, and countries that borrow.

He says growth in the United States will slow dramatically in coming years, and that could result in the current growth in China and other parts of Asia becoming unsustainable.

He says that paints a gloomy picture for New Zealand, which is becoming increasingly reliant on these markets for exports.