In the past few months, Citi’s chief economist Willem “Gold is a 6000 year old bubble” Buiter, has been making increasingly more hyperbolic and grandiose predictions about the future, which doesn’t make them wrong. First, in August, after the US stock market tanked in the matter of days, he predicted that “Only “Helicopter Money” Can Save The World Now” the reason for which being that just a few days later, Citi made a “global recession in 2016” its base case scenario.

Then today, Buiter released another forecast, where while backtracking somewhat on his global recession call, he does cut Citi’s global economic growth forecast for 2016 for the fifth consecutive month, now expecting just 2.8% growth, down from 2.9% a month ago.  Buiters said that “if we adjust for the probable mis-measurement of China’s GDP growth in official data, “true” global growth is probably around 2¼% this year and also is likely to be below 2½% in 2016 (i.e. well below the 3% long-run norm). EM growth on this measurement-adjusted basis probably is about 2½% YoY this year, the lowest since the late 1990s. Even after these downgrades, risks to our global forecasts probably lie to the downside.”

Some more details:

The global economy is being hit by the third major disinflationary wave of the past ten years, with the Great Financial Crisis of 2007-09 and the Euro Area crisis of 2011-12 now followed by a major and widespread EM slowdown. We have been gloomy on China’s growth prospects for a while, and remain so even with the apparent resilience in the official data. With the twin supports from China’s credit boom and the commodity-related investment boom fading, YoY growth of GDP for EM ex-China is now below 2% YoY.

So why a far more muted stance on what a month ago was a mega bearish “base case” for a global recession in 2016? Simple: more central bank interventions to kick the can, and buy a few more months of time. Much moar.

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