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To Doubters and Need-to-knowers..

February 3, 2010

The good news from Martin Wolf(FT) moderating a recent Davos discussion..

For me, the highlight of the programme was the economic outlook session on Saturday. This is not only because I was moderator. The starting point for the discussion was an obvious one: the policy interventions of late 2008 and 2009 have been a resounding success. The outcome has been a far briefer and shallower recession than most participants imagined a year ago. That is obvious from the successive consensus of forecasts for 2010. For almost every significant economy, the forecast for growth this year is higher than it was a year or even six months ago. The world economy survived the heart attack in the financial system.

It did so as a result of fiscal and monetary stimuli that are unprecedented in peacetime. These actions were essential and successful. It was inevitable, in particular, that the largest increases in fiscal deficits occurred where the private sector’s credit bubble had been greatest: the US, UK and Spain above all. China also mounted a massive stimulus programme, as Zhu Min, deputy governor of the People’s Bank of China, noted in the discussion.

Well said that man!

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