Bullish on China, India: Nouriel Roubini

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Nouriel Roubini, Co-Founder and Chairman, RGE Monito, said the recession will continue through the end of the year. He added that due to financial imbalances of the economy, advanced economies, especially US, Europe and Japan, will see growth below the potential for the next couple of years.

With respect to the Asian economies, Roubini said China's policy actions will lead to recovery and that demand from China for commodities will also help the recovery of Asia. "India, also, might observe an economic recovery given that they have better economy demand than other countries in the region," he said.

Going forward, Roubini said, demand from China and India will increasing the prospects of commodity exporters.  

Here are the excerpts of Nouriel Roubini's comments. Also watch the accompanying video.

On recession

Recession is going to continue through the end of the year and in advanced economies, especially, US, Europe and Japan, I see growth below the potential growth for the next couple of years because of their financial imbalances of the economy.

On recovery

There is a risk of a double dip but because the problem we are facing right now is that we have very large budget deficits in the US and other countries. These deficits are being monetised by monetary policy authorities and at some point if the deficits aren't reduced then the recession is going to continue. Long-term bonds yields may go higher and that might drown out the recovery leading to a double dip recession.

On China and India

Certainly looks like China, now, is doing the policy actions that will lead to recovery of China and then the demand from China for commodities is another thing that will help the recovery of Asia. India also might observe an economy recovery given that they have better economy demand than other countries in the region. So it is going to be a story of China and India and of demand from China and India increasing the prospects of commodity exporters.