The world is facing a serious recession but must strive to avoid a repeat of the Great Depression that struck in the 1930s, warned a leading American economist in an interview published on Sunday.
Jeffrey Sachs, special advisor to the Secretary-General of the United Nations, stated in an interview with the Spanish daily El Pais that he believes the current recession will be more severe than others but will not be as strong as the Great Depression. Sachs, who is also the director of the Earth Institute at Columbia University in New York, also expressed his belief that Asia should be able to maintain positive levels of economic growth. Allowing the collapse of the investment bank Lehman Brothers was a huge mistake that worsened the economic crisis, he added, warning that new mistakes of such magnitude – like allowing the collapse of the struggling American automotive sector – would inevitably lead to depression. The International Monetary Fund (IMF) forecasted a decline in activity in the U.S. economy of 0.7 percent in 2009, compared to the October forecast of growth of 0.1 percent. In the eurozone economies, the decline in activity is likely to be 0.5 percent in 2009, as opposed to the growth forecast of 0.2 percent in October. (H)
