Global economy at risk from Asian slowdown and European stagnation

A sharp slowdown in Asia and stagnation in Europe are putting the global economy at risk of a prolonged slump, economists say, marked in places by sky-high unemployment, sluggish wage growth and some of the worst economic conditions in decades.

On Monday, Japan said it had entered its fourth recession in six years - this one despite aggressive efforts by Prime Minister Shinzo Abe to boost growth. Meanwhile, British Prime Minister David Cameron warned that the world economy could be headed towards another disaster.

"Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy," Cameron wrote in Britain's newspaper.

Two of the world's economic powerhouses - Europe and Japan - are failing to bolster global growth, and their economies appear to be getting worse. With an unemployment rate of 11.5 per cent, the euro zone is experiencing conditions some economists say echo the Great Depression.

Emerging markets, which helped lift the world out of the ugly downturn that followed the 2008 financial crisis, are also lagging. Russia and Brazil have been dogged by recession, and China's double-digit growth has slowed rapidly as the country has matured and a speculative real estate bubble has let out air.

China is "the thousand-pound gorilla in the emerging world and a big, big question mark", said Nariman Behravesh, chief economist at the consulting firm IHS.