Krugman: global economy on track

Krugman: global economy on track
The Financial Express, May 26, 2009, Page 11

Reuters, Abu Dhabi

The world economy has avoided “utter catastrophe” and industrialised countries could register growth this year, Nobel Prize-winning economist Paul Krugman said on Monday.

“I will not be surprised to see world trade stabilise, world industrial production stabilise and start to grow two months from now,” Krugman told a seminar.

“I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year.”

The Princeton professor and New York Times columnist has said he fears a decade-long slump like that experienced by Japan in the 1990s. He has criticised the US administration’s bailout plan to persuade investors to help rid banks of up to $1 trillion in toxic assets as amounting to subsidised purchases of bad assets.