‘We could be five years away from next economic crisis’

The next global economic crisis is expected to hit the world in only five years’ time, says Yves Zlotowski, chief economist for the Coface Group. Speaking at the Country Risk Conference 2010 in Sandton last week, Zlotowski said this was at least two to three years sooner than what it should be. “Economic crisis is nothing new to the world and every eight or so years a crisis is experienced. The global economic meltdown was considered to be just another crisis of this nature until the collapse of Lehman Brothers when it became apparent that the world had a dramatic crisis on its hand.” Zlotowski says while a crisis every seven to eight years is nothing unusual – as this has been proven in the history of Coface to be the norm – the impact of the 2008/2009 global economic meltdown was so vicious that the next crisis is expected to take place no later than five years from now. “The economic crisis was exceptional in its violence, not its length. Never before has the world experienced such huge degrees of nonpayment. If, however, we don’t deal with financial globalisation in an effective manner now, the next crisis will hit us even sooner, with some predictions in the region of three years’ time.” According to Zlotowski decent growth is expected for most of the world in the next year or two, with emerging markets having shown the most resilience post-recession. “While the average growth expected is in the region of about 3 to 3.5%, there are emerging markets showing growth of up to 6%.”