Former International Monetary Fund (IMF) managing director Dominique Strauss-Kahn on Thursday expressed fears that the US might face another shutdown and debt ceiling crisis, severely affecting the emerging economies.
Dominique Gaston André Strauss-Kahn is often referred to in the
media as DSK. He is a French economist, lawyer, politician, and member of the French Socialist Party.
He expressed his concerns about the prolonged low growth trend of the global economy amid a lack of leadership and cooperation.
"There will be no big collapse or big threat, but I'm personally pessimistic (about the global economic outlook)," he said while addressing a conference in Seoul.
Strauss-Kahn said that the global economy would maintain a low growth trend for the time being due to a lack of leadership and cooperation, noting that major economies, including the US and Europe, would seek to focus on their own problems.
He worried that the US economy would face another budget crisis down the road, saying that while the world's No.1 economy seems to be going back to normalcy, the economy may be faced with another shutdown and debt ceiling crisis.
Touching on the possible impact from the Fed's tapering of its monthly bond purchases, Strauss-Kahn said that it would have an impact on the emerging economies as well as advanced economies like Europe, which can be resolved and addressed.
He said the role of the US dollar will not be dented, saying that though concerns spread about the collapse of the dollar following the global financial crisis, nothing of these kinds of things has happened.