Jacob Frenkel: "The only problem facing the world economy is the rapid growth of global debt"

Speaking at the Davos World Economic Forum, Jacob Freenkel, chairman of J.P.Morgan International, said he was worried only by the fast-growing world debt. "My main concern is the fact that all problems arise when investors are too optimistic." "This is also the main problem we have learned during the recent crises," he added.

The International Monetary Fund has revised its global growth forecast for 2018. and 2019. on Monday, saying the revision was partly due to the recently approved US tax reform. Global growth forecasts for 2018. and 2019. were revised upwards by 0.2 percentage points to 3.9%.

Freenkel said the apparent optimism among the global business and political leaders who attended Davos this year is "justified" because the economic performance of each region in the world is better than the previous year. Fröckel of J.P.Morgan argues that the main challenge is to ensure that emerging economies globally "base" their growth based on real investment activities and not just by increasing debt.

Global debt rose to a record $ 233 trillion. in the third quarter of 2017.

To the question of what he sees as the most risky on the market, Freenkel replied: "The rapid growth of government, municipal and corporate debt, but do not get me wrong, I'm optimistic about the world economy."

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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