U.S. Business Leader Warns of 'Double Dip' Recession

Business Roundtable chairman warns credit crunch will contintue until end of year.

The head of a U.S. business executives group warned April 17 that the world's largest economy could endure a "double dip" recession if efforts by the authorities fail to spur growth. "If, after the economic stimulus package takes effect and we get into (20)09, and the ... lower interest rates do not kick in, there is a probability of (a) double-dip recession," said Harold McGraw, chairman of Business Roundtable. "That could have serious effects on the other developed countries," said McGraw, who is also head of publishing giant McGraw-Hill.

McGraw, who was in Tokyo for a one-day business summit with fellow business leaders from the Group of Eight (G8) richest nations, warned that the credit crunch would continue until the end of this year. "I think it will take the rest of this year to unwind but I think it will. It turned (out) to be bigger and broader and deeper than we thought," he said.

A growing number of economists fear the world's largest economy will experience a recession during the first half of 2008 amid a housing slump and related credit crunch. There is also growing nervousness that the economy might slip back into recession again after a brief recovery in a W-shaped "double dip recession."

Copyright Agence France-Presse, 2008

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