Worst is over

According to world famous economist Paul Krugman, the worst is over for the world. World economies are recovering, but these will take longer than expected, something like at least two years. In Malaysia we are optimistic, as the government put in several stimulus plans and other economic activities to move the economy out of recession, we are seeing some results. Hopefully by second quarter next year we may see a positive economic growth. Considering the facts, Malaysia is doing fairly well.

KUALA LUMPUR: The worst is over in the world economy, but full recovery will be a long time coming, said Nobel prize-winning economist Paul Krugman.

He said measures such as sustained government spending, coupled with fiscal stimulus had brought the world to the point of "rough stabilisation", adding a technical recovery in the US was currently in the works.

"The US is roughly at a turning point as we speak," he said at the World Capital Markets Symposium on Aug 10.

Krugman, who is also professor of economics at Princeton University, said it appeared the global economy had avoided "Depression 2.0".

He said, however, there was every reason to believe a recovery would be characterized by higher growth and industrial output, but lagging employment.

"The world looks like it is heading towards becoming a globalised version of Japan in the '90s," he said.

He said a full recovery was at least two years away, and governments would need to try all different measures to bring recovery, such as implementing more stimulus packages.