World economy not to restore earlier 2010: U.S expert

Business Materials 12 August 2009 11:06 (UTC +04:00)

Azerbaijan, Baku, August 11 / Trend A. Badalova /

World economy will restore not earlier 2010, professor, director of research at the Acton Institute, Canada, Samuel Gregg, said.

"I think that world economy will restore not earlier 2010. But restoration of unemployment level will be held slowly," Gregg told Trend via E-mail. 

According to forecasts of the International Currency Fund, level of economic drop of developed countries will hit 3.6 percent in 2009 compared to 1.5-percent growth in developing countries. Economy in developed countries will increase 0.6 percent in 2010 but 4.7 percent in developing countries. According to WB forecast, world economy will reduce 2.9 percent in 2009 compared to 1.7 percent forecasted earlier.     

Economist, Nobel laureate, Paul Krugman, said this week that full restoration of world economy will take at least two years and even more. He said that protracted slump will cover world economy compared to gone ten years of 1990 in Japanese economy.

Gregg does not rule out possible appearance of the second financial crisis. But it will not be so great as in late 2008.

Much depends on state of property market in the USA and term of its restoration, as well as determination of number of existing toxic financial assets by bank system, Gregg said.

"If budget deficit continues to increase in the USA, trust of consumers and investors will remain low," Gregg said.

Expert said that most of measures taken to combat with financial crisis in EU countries and the USA are inefficient. At present, there is no necessity in new measures, Gregg said.

"These measures have no result. One could even say reverse effect," Gregg said.

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