The Worst Is Not Over for Global Economy: Analyst

Global markets and economies can be pretty much be summed up in three words -- worst not over. That's what one economist told CNBC's Asia Squawk Box Tuesday.

"It's going to be very very difficult for the next few months" said, Kevin Grice, senior economist at Standard Chartered Group.

"There are three negative things that are going on at present which will continue to overhang the markets," Grice said. "Firstly, the credit crisis is far from over. Secondly, the U.S. economy is going to deteriorate ... in the second half of 2008 and will stay very weak until the end of next year". (Watch the complete Kevin Grice interview on the state of the global economy.)

"Thirdly, in the macroeconomic sense, you're getting spillovers from the U.S. to the rest of the other major economies. Those three things interacting is going to take time for markets to work their way through," Grice concluded.

Grice expects more writedowns to the tune of $1 trillion, more losses for financials, the U.S. housing situation to worsen and a technical recession in Europe and Japan (two quarters of negative growth).

However, Grice adds that Europe and Japan aren't plagued by the serious kinds of imbalances and economic problems that the U.S. is having to work through. So it's a case of Europe and Japan being weak, but not facing serious troubles.