'Dr Doom' Nouriel Roubini predicts financial meltdown to last a decade

Economist Nouriel Roubini, nicknamed 'Dr Doom', who successfully predicted the sub prime crisis in 2008 is now predicting the current financial slowdown could last a decade unless Europe radically reforms itself and the United States gets serious about its own overwhelming debt deficit.

He painted a grim picture of the euro zone in recession and key emerging markets in China, India, Brazil and South Africa slowing down. The biggest uncertainty is the possibility of a conflict with Iran over its nuclear programme - which could lead oil prices to spike to US$150 per barrel, and lead to a global recession, he said.

Calling for a major change in policy priorities, Dr Roubini said: "We have to shift our investment from things that are less productive like the financial sector and housing and real estate to things that are more productive like our people, our human capital, our structure, our technology, our innovation."

Slow growth in advanced economies will likely lead to "a U-shaped recovery rather than a typical V", and could last up to 10 years if there is too much debt in the public and private sector, he said.

At a panel discussion yesterday, Dr Roubini also said Greece will probably leave Europe's single currency within 12 months and could soon be followed by Portugal.

» Fallout from financial meltdown could last a decade, says 'Dr Doom' | TODAY Online