Page 24 - ARUBA TODAY

Monday 26 June 2017 BUSINESS
A24

Debt, protectionism could drag down improving global economy

By DAVID McHUGH been largely fueled by sion levels for reasons that
AP Business Writer people being willing and aren’t always clear to
FRANKFURT, Germany (AP) able to spend more. economists.
— But that trend could fall The BIS urged governments
The global economy has victim to higher levels of around the world to take
picked up and prospects debt as interest rates rise in advantage of the eco-
for the next few months are some countries and as the nomic recovery as an op-
the best in a long time. amount people need to portunity to make growth
But the recovery is matur- spend to service their debts more resistant to trouble by
ing and faces risks from takes a bigger chunk of in- implementing pro-business
populist rejection of free come. and pro-growth measures.
trade and from high debt Countries that were In particular, the report
that could burden con- slammed by collapsing real warned against a back-
sumers and companies as estate markets during the lash against globalization,
interest rates rise. A laborer takes bath after the day’s work at a site where he Great Recession seem less saying that trade and inter-
Those were key takeaways makes cement blocks used for construction, in Bangalore, In- vulnerable now, such as connected financial mar-
from a review of the global dia, Saturday, June 24, 2017. the United States, the U.K., kets had led to higher stan-
economy released Sunday Associated Press and Spain. dards of living and lifted
by the Bank for Internation- But debt burdens are more large parts of the world’s
al Settlements, an interna- reach 3.5 percent this year, by governments and inter- worrisome in a range of population out of poverty.
tional organization for cen- according to a summary of national organizations as other countries mentioned It called for domestic poli-
tral banks based in Basel, forecasts, not quite what well as by private analysts in the report, including Chi- cies to address inequality
Switzerland. it was before the Great point to “further gradual na, Australia and Norway. and lost jobs, saying that
The report said that “the Recession but in line with improvement” in coming Another risk comes from changing technology was
global economy’s perfor- long-term averages. months. weak business investment, often to blame, not free
mance has improved con- Meanwhile, financial mar- Key risks include a possible typically the second stage trade.
siderably and that its near- kets for stocks and bonds weakening of consumer of recovery after consum- “Attempts to roll back glo-
term prospects appear the have been unusually buoy- spending across different ers start spending more; balization would be the
best in a long time.” ant and steady. economies. yet that kind of spending wrong response to these
Global growth should On top of that, forecasts So far, the recovery has has lagged its pre-reces- challenges,” it said.q
Takata files for bankruptcy, overwhelmed by air bag recalls

By TOM KRISHER and MAR- ruptcy protection in Tokyo U.S., affecting 42 million ve- the problem with the in- crash.
CY GORDON and the U.S., overwhelmed hicles. flators despite reports of U.S. lawmakers have criti-
Associated Press by lawsuits and recall costs Under the agreement with deaths and injuries. Even- cized the pace of the re-
UNDATED (AP) — Japa- related to its production of Key, remnants of Takata’s tually they were forced calls. At the end of April,
nese air bag maker Takata defective air bag inflators operations will continue to to recall tens of millions of only 22 percent of the 69
Corp. has filed for bank- that are linked to the death manufacture inflators to be vehicles. Because of the million recalled inflators
of at least 16 people. used as replacement parts size of the recall, some car in the U.S. had been re-
The company announced in recalls. The recalls, which owners face lengthy waits placed, leaving almost 54
the expected action Mon- are being handled by 19 for replacement parts, million on the roads, ac-
day morning Tokyo time. affected automakers, will meanwhile operating their cording to the National
Takata confirmed that continue. Although Takata cars worried that the air Highway Traffic Safety Ad-
most of its assets will be will use part of the sale pro- bag could malfunction in a ministration website. q
bought by rival Key Safety ceeds to reimburse the au-
Systems, based in suburban tomakers, experts say the
Detroit, for about $1.6 bil- companies still must fund
lion (175 billion yen). a significant portion of the
Takata’s inflators can ex- recalls themselves.
plode with too much force “It’s likely every automaker
when they fill up an air bag, involved in this recall will
spewing out shrapnel. Be- have to subsidize the pro-
sides the fatalities, they’re cess because the value of
also responsible for at least Takata’s assets isn’t enough
180 injuries, and touched to cover the costs of this re-
off the largest automotive call,” said Karl Brauer, ex-
recall in U.S. history. So far ecutive publisher of Kelley TK Holdings Inc. headquarters is shown in Auburn Hills, Mich.,
100 million inflators have Blue Book and Autotrader. Sunday, June 25, 2017. Japanese air bag maker Takata, over-
been recalled worldwide Takata and the automak- whelmed by lawsuits, recall costs, filed for bankruptcy protec-
including 69 million in the ers were slow to address tion on Monday.
Associated Press