A new World Economic Forum report warns that global long-term growth is at risk due to high worldwide debt and political instability. To share insights on this economic outlook, World Economic Forum Managing Director Saadia Zahidi joins Catalysts. Zahidi paints a mixed picture of economist opinions. Most are cautiously optimistic, with 54% saying the economy is "relatively stable." However, 37% believe it "could get a little bit worse," while only 9% expect improvement. However, she mentions that economists are particularly upbeat about US growth prospects. The real worry, Zahidi explains, lies with developing countries. These nations face mounting debt that could spread problems to other emerging economies. She highlights a startling fact: "There’s about 3.3 billion people that live in economies where the debt servicing levels are actually higher than what those economies are spending on… health and education." This situation creates a difficult balancing act for these countries. "Now that’s particularly a developing economy problem," Zahidi explains, noting it means that there are a lot of "trade-offs" between social spending and servicing debt. "So overall there is a fiscal squeeze," she states.
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