Paulson expects economic rebound in second half
Treasury secretary Henry Paulson said on Friday financial markets are “considerably calmer” now than they were two months ago.
By Agencies |
WASHINGTON: Treasury secretary Henry Paulson said on Friday financial markets are ���considerably calmer��� now than they were two months ago. He predicted the economy will be rebounding by the second half of this year. In a speech to business executives, Paulson said the drag from housing, which he characterised as still the biggest risk to the economy, will soon be lessened by nearly $100 billion in economic stimulus payments to US households.
���The fiscal stimulus will provide support to the economy as we weather the housing correction, capital markets turmoil and higher energy and food prices,��� he said. The economy has been pushed to the brink of a recession by a prolonged housing slump, a credit crisis, soaring energy prices and more than a quarter-million job layoffs over the past four months. Paulson never used the word recession, although many economists believe US is in one.
But he did forecast that the stimulus checks going to 130 million households would help spur growth in the second half of the year. He said that those checks along with business tax breaks in the $168-billion stimulus package would add 500,000 jobs by the end of the year over what would have been created without the stimulus boost.
���Although we are still working through housing and capital markets issues, and expect to be doing so for some time, we also expect to see a faster pace of economic growth before the end of the year,��� he said. Paulson said both the ability to obtain loans and investor confidence are gradually improving, raising hopes that the financial market crisis which hit last August was beginning to recede. ���In my judgment, we are closer to the end of the market turmoil than the beginning,��� he said.
���The fiscal stimulus will provide support to the economy as we weather the housing correction, capital markets turmoil and higher energy and food prices,��� he said. The economy has been pushed to the brink of a recession by a prolonged housing slump, a credit crisis, soaring energy prices and more than a quarter-million job layoffs over the past four months. Paulson never used the word recession, although many economists believe US is in one.
But he did forecast that the stimulus checks going to 130 million households would help spur growth in the second half of the year. He said that those checks along with business tax breaks in the $168-billion stimulus package would add 500,000 jobs by the end of the year over what would have been created without the stimulus boost.
���Although we are still working through housing and capital markets issues, and expect to be doing so for some time, we also expect to see a faster pace of economic growth before the end of the year,��� he said. Paulson said both the ability to obtain loans and investor confidence are gradually improving, raising hopes that the financial market crisis which hit last August was beginning to recede. ���In my judgment, we are closer to the end of the market turmoil than the beginning,��� he said.
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