Former IMF deputy director of research Carmen Reinhart—now an economist at Harvard University—warns that Hong Kong’s unrest could trigger a global recession.
In an interview tie Bloomberg Television on Friday, she said that Hong Kong prolonged protests could prove a tipping point for the world economy.
She added that Hong Kong is among her main concerns and the turmoil in the city could impact growth in China and Asia in general, according to the interview.
“These are not segmented regional effects, these have really global consequences. So what could be a tipping point that could trigger a very significant global slowdown, or even recession -- that would be a candidate, that could be a candidate,” Reinhard said during the interview.
The anti-China-extradition bill protests in Hong Kong started in June and has escalated in the past two months.
Reinhard’s warning came days after Federal Reserve Bank of Boston President Eric Rosengren said Hong Kong’s crisis is on his global worry list.
He was quoted in another Bloomberg report as saying that the problems in Hong Kong could spill over to international markets.
“Hong Kong is one of the great global cities so we do have to be concerned about how that all gets resolved,” he was quoted as saying in the report.
Hong Kong’s economic growth remained sluggish in Q2 at 0.6% year-on-year.
While consumption expanded by 4% year-on-year, it was slower than Q1’s 4.5%.
Growth in investment went down future to -12.1% year-on-year from -7% in Q1.