The global economy appears to be trapped in Japan-style stagnation, HSBC's high-profile senior economic adviser said on Tuesday, adding his voice to the chorus of economist warnings.
Stephen King said economic activity around the world was slowly deflating, with undershoots in both growth and inflation.
"These shortfalls are reminiscent of Japan's difficulties in the 1990s and beyond. Relative to projections five years earlier, Japan was nursing a 24 percent nominal GDP shortfall by the turn of the century. And many of Japan's problems are now being replicated elsewhere: Low bond yields, falling bank share prices and deleveraging," King said in a report.
He said that Japan was the "ultimate slow puncture economy," having stagnated since the mid-1990s and that Italy was a "carbon copy."
King, who was previously HSBC's chief economist, added that both the U.S. and the U.K. had ended up on a lower growth path since the global financial crisis of 2007-2008. The two economies are seen growing by 2.6 percent and 2.2 percent respectively this year by the International Monetary Fund (IMF).
Several financial institutions have warned this year about rising risks to the global economy, which is seen expanding by 3.4 percent in 2016 by the IMF.
This month, Morgan Stanley hiked the probability of a global recession within the next year to 30 percent from 20 percent and the IMF urged governments to take action to combat rising economic danger signs.
In February, Citigroup strategists led by Jonathan Stubbs warned of the possibility of a "significant and synchronized" global recession and a "modern-day equity bear market."
Follow CNBC International on Twitter and Facebook.
