Rising crude and energy prices not good for India: Nouriel Roubini

CNBC TV18

Speaking at the CNBC TV18 ICICI Lombard India Risk Management Awards ceremony in Mumbai, American economist Nouriel Roubini on Friday said that India and its markets have seen an acceleration of growth in the last few quarters and have shaken off the effects of demonetisation.

However, Roubini also said that rising crude and energy prices may negatively impact India.

The economist, who teaches at the Stern School of Business, NYU, pointed out that emerging markets have had difficult years between 2013 and 2015, but have grown from 2016 onward.

He pegged global growth to be better than previous years at around 3.7 percent this year, assuming emerging markets grow at over 5 percent. “Slowdowns don’t necessarily mean periods of recession, as much as decelerated growth,” Roubini said.

According to the Turkish-born economist, who also runs his own consultancy firm, countries should carefully assess what China does. "China avoids hard landings by increasing CapEx and infrastructural spend. China has to accelerate supply-side reform and cleaning up banks. Increased capex in China could lead to global imbalance," he said.

He went on to say that India and China have the potential to grow much faster than 5 percent.

Talking about geopolitical concerns, Roubini talked about the possibility of wars between countries like the United States and North Korea, Syria and Iraq, and many others that could affect world markets.