THIS year will be a bad one for the economy after a ‘catastrophic’ end to 2008, but that the prospect was of a recession rather than a depression, European Central Bank (ECB) governor Guy Quaden was quoted as saying at the end of January 2009, Reuters reported.
Quaden, who is the governor of the Belgian central bank, was quoted by Reuters as saying that “the economy faces a recession worse than those of the 1970s and 1980s,” adding that he had never witnessed such a sharp fall-off of economic growth.
“The fourth quarter in particular was truly catastrophic with a negative quarterly growth of at least minus 1 percent,” he said. “Let's hope the bottom has been reached.”
It was not clear whether Quaden was referring to the Belgian economy or the entire euro area.
Falling raw materials prices that support spending, the rapid response of financial institutions and the stimulus packages of governments should all help pull the economy out of recession, Quaden said, as reported by Reuters.
“One needs to learn the lessons of economic history from the 1930s and the 1970s and 1980s and act with targeted and temporary measures,” he said.
The central bank governor urged steps that will encourage consumers and investors to spend.
“These positive measures are in the pipeline but you need some time for them to come out of the pipe,” he said.
2. Feb 2009 at 0:00 | Compiled by Spectator staff from press reports