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“Emerging markets key to global recovery” says Citigroup ceo

Wednesday 12 May 2010 - by Iain Anderson

Citigroup chief executive Vikram Pandit has said an economic recovery in emerging markets will be a key plank of a recovery in the global economy.

Speaking at the Chatham House Global Financial Forum on 26 April, Pandit said: “The world needs new growth drivers besides US consumption and credit creation. Emerging markets offer one potentially powerful source.”

Pandit called for the US economy to be at the vanguard of reform to create wider global growth. He said: “The US – with 23 per cent of global economic activity - is such an important player and must be at the forefront of reform.”

He said US policymakers should focus on delivering the right policies to train and maintain local and international talent; to trade strongly with emerging nations and create demand for US goods and services; and to have an energy policy that reduces the costs to business and which deals with global imbalances with renewened vigour.

Pandit said: “In the future, credit should grow in line with GDP - not as a multiple - and the savings rate must increase.”



He acknowledged the possibility of a double-dip recession but said he believed that the US economy is “likely to avoid slipping backward”.

Pandit also reiterated recent calls for responsible finance, urging strong and clear regulatory reform, including a level playing field for the global financial industry and “a clear regulatory authority to resolve the fate of systemically important institutions that become endangered”.

He is not yet convinced a global bank tax that was ringfenced for specific national policy purposes would be the right solution. He said: “I cannot really say if this would be workable.”


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