The Hindu Business Line : US economy to see slight improvement: McCormick

Even as Indian exporters’ worry about the US recession, a senior US Treasury Department official on Thursday said that the US economy would see “slight improvement” in the second half of 2008 with the Federal Government proposing to kickstart its $150-billion fiscal stimulus package in May.

“The ambitious fiscal package of $150 billion would begin to be injected in the economy in May. Beginning May 2, there will be tax rebate of $100 billion (out of $150 billion) that taxpayers will get in May and June. This we expect would add 5 lakh new jobs in 2008 and hopefully be an important stimulant to the economy”, the visiting US Under Secretary for International Affairs, Mr David H. McCormick told reporters here.

By providing this fiscal package, the US Federal Government hopes to see slight improvement in the economic outlook in second half of 2008 and continue to see momentum in 2009.

“Make no mistake, these are very challenging times for the US economy. 2008 is a very challenging year. US economy will continue to be very slow in the first and second quarter”, McCormick said.

He also said that there would be more write-downs due to the US sub-prime crisis. “I do not presume that this is all behind us. I do think we made a lot of progress. Some of the financial institutions have taken aggressive write-downs. I think we have seen a great deal of this behind us. That does not mean it is all behind us”, Mr McCormick said when asked about the US sub-prime crisis.

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