US retaliation can push world economy into depression
The global economy faces the spectre of a depression amid US threats to punish those responsible for the attacks on New York and Washington, Southeast Asia's biggest banking group said Monday, September 16.
"The attacks have substantially raised the recession risk in the US," Singapore-based DBS Bank said in a weekly report, which painted a grim picture of the Asian region's prospects in the near term. "And with other major economies like Japan and Euroland already in recession or hardly growing, this could tip the world into a global depression," it said.
Any military strikes ordered by US President George W. Bush would inevitably affect oil prices and with most major economies struggling, a rise in crude prices could bring them closer to a depression, the bank said. Most central banks have already cut interest rates in a bid to boost their sagging economies and "the last thing they need is a protracted rise in oil prices," said the bank.
It is still not clear how the Bush administration intends to punish those behind the attacks that have left more than 5,000 people dead or missing but the "risk is tilted towards an all-out war," said the bank. ― (AFP, Singapore)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)