The US economy looks set to pick up next year or early in 2010, although this scenario is by no means certain, the IMF managing director Dominique Strauss-Kahn said in a newspaper interview on Thursday. "There is a reasonable probability ... of the US economy starting to recover at the end of 2009 or the start of 2010," he told Spanish newspaper Expansion.
He based this view on the likelihood that the housing market has touched a low point and as demand reacts to fiscal stimuli but added: "We recognize, however that the possibility of a recovery is plagued with uncertainty." If the US housing market continued to fall then deflation could not be ruled out, the former French finance minister said. "We are faced with an abrupt fall in activity and we should use all instruments available with the aim of simultaneously tackling three aims, the first restoring the stability and confidence of national financial markets." He reiterated that the IMF would cut its current 2.2 % forecast for global growth next month.
Dec 20, 2008
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