Don't pay too much attention to financial markets, they always over-react: Citigroup

CNBC-TV18's Latha Venkatesh spoke to Willem Buiter Chief Economist of Citigroup and asked him his advice to investors for this year where the financial markets seem to be bumpy.

Financial markets do what financial markets do, they are all over the place. One moment they are realistically optimistic and buoyant and then like last week we get a 6 percent decline just in response to increased fear. The key thing is don’t pay too much attention to financial markets, they always over-react, he said.

Do take the threat of trade war seriously and prepare for it. Be ready, should there be an expected interruption of imports or steep increase in import cost, to adjust to that and to respond to that, he added.

There is no doubt that even if we don’t get trade war, there will be a significant US-led retreat from multilaterism, said Buiter.