Goldman Sachs CEO Blankfein on Europe (growth is still slow), China, US, Japan, Emerging markets
Goldman Sachs Chief Executive Officer Lloyd Blankfein, interview with the Nikkei press:
- Japan is the No. 3 economy, and it’s not No. 3 by that much. It’s not that far from the size of China’s economy. So that’s a big source of growth the world has done without for a long time. It would suit not only the Japanese but also everybody else for Japan to grow.
- After experiencing slow growth for almost two decades, you have to take more aggressive moves, which the government looks like it is. We believe the steps taken have been appropriate.
On structural reform in Japan:
- It’s easy to say but really hard to accomplish
- Growth in Europe is still slow
- growth in China is at a kind of inflection point.
the U.S. economy?
- I think 3% growth is attainable. There are many signs indicating positive growth. Banks have reduced leverage and corporate balance sheets are strong.
- Emerging economies have higher growth and higher risk. Whenever you have fast growth, you run the risk of over-investment in certain areas. If you grow at 2%, you’re more likely to get more things right than if you’re growing at 9%.
Emerging markets depend a lot on external investment. There will be times when the spigot will open and a lot of investment will flow into them, and then times when it’ll be shut a bit. So I think they’ll be riskier, subject to more volatility.
The fact that there is volatility now is making everybody nervous, but it’s not a surprise. I have a bullish view on most (emerging markets) over a long period of time, but they have challenges to work through.