8 October 2001, 12:26  IMF's Rogoff says US could hit recession, but slowdown will be brief

FRANKFURT (AFX) - IMF chief economist Ken Rogoff said there is evidence the US will briefly slip into recession, but the slowdown will only be short-lived. Speaking in an interview with the Frankfurter Allgemeine Zeitung, Rogoff said while there is evidence of an oncoming recession in the US, the economy there is in much better condition than Japan. "We (the IMF) are as before convinced that the current weakness (in the US) is only a pause, and is not the end of the long term economic boom." Rogoff said it is likely the recent drops in productivity will be recouped after only 1-2 years of weakness. He noted that the advances in IT have brought lasting advantages for economic developments. The terrorist attacks on the US have not changed the fundamental strength of the long term US economy. However he added in the current climate, the Federal Reserve and other central banks need fast action in their monetary policies. "Its not the aim of the Fed or any other central bank to overshoot their inflation target. But no one is saying US rates should stay on 2.5 pct for ever."

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