Economies that use the euro probably will shrink further as governments cut spending and banks seek to lend less, said New York University Professor Nouriel Roubini.
“It’s like a slow-motion train wreck,” Roubini, the economist who predicted the 2008 financial crisis, said today at a conference in Santiago, Chile.
Greece won’t be the last euro-zone country to restructure debt and may exit the euro in 2013 or 2014 along with another small country, the co-founder of Roubini Global Economics LLC said. Roubini also said he doesn’t expect a self-sustaining recovery in the U.S. anytime soon.
The so-called BRIC countries of Brazil, Russia, India and China are “over-hyped” and require reforms to sustain growth, he said. China, which may face a “hard landing” in a few years, needs to grow private consumption as a percentage of gross domestic product, Roubini said.