The European economy is headed for a U-shaped downturn, according to Prof. Norbert Walter, chief economist at Deutsche Bank and one of the keynote speakers at last week's annual conference of the International Council of Shopping Centers in Barcelona. 'US stocks have booked a recovery these past few weeks and there are some who are now hoping for a V-shaped recovery. It will not happen. It may look like a W because of the volatility, but will be a long wide open U with a long bottom.'
The European economy is headed for a U-shaped downturn, according to Prof. Norbert Walter, chief economist at Deutsche Bank and one of the keynote speakers at last week's annual conference of the International Council of Shopping Centers in Barcelona. 'US stocks have booked a recovery these past few weeks and there are some who are now hoping for a V-shaped recovery. It will not happen. It may look like a W because of the volatility, but will be a long wide open U with a long bottom.'
Pointing to rising unemployment and savings rates, particularly in the US but also in Europe, Prof. Walter said consumption in the retail sector was set to contract significantly. Even countries like Switzerland and Germany which did not see a major real estate bubble in the last decade are being hit, he added. 'The world economy fell off a cliff after the collapse of Lehman Brothers on 15 September. 'Will we get out of the crisis in 2010? I hope so and there are chances that we will. I see stablilsation in 2010 if no new troubles arise.'
He noted, however, that it was extremely difficult to make a prediction. 'This is the most dramatic downturn in my lifetime, we still cannot judge the outcome. You can so easily be wrong.'
