January 26, 2008 / 10:03 AM / 12 years ago

Key quotes on the global economy

DAVOS, Switzerland (Reuters) - Following are highlights of comments by participants at the World Economic Forum on the global economy:


“What we need...is a more strong system of coordination. This coordination is going on among the central banks, but it is not enough on its own.

“We can’t speak day after day about globalization without at the same time having in mind that...we need multilateral solutions.”


“As we look out into 2008 I think there will continue to be downward pressure on home prices, that will continue to put downward pressure on all mortgage related securities.

“Unfortunately I think there is more downside from mortgage and mortgage-related products.

“The problems in the credit market are spreading, spreading to the consumer sector.

“Focusing on the consumer, the consumer sector is still going to be concerned. It will be a while before you see a return of normalcy in banking and (capital) markets.

“The fed (rate) cut and the fiscal stimulus package are not going to help declining house prices in the U.S., that problem is likely to continue.”


“Europe is the largest economic power today and it has, rightly or wrongly, a very strong currency.

“The economic competitiveness of Europe is going to be put to the test. We are going to go through a period of back to reality. The race for raw materials, for energy sources is an expression of that.

“Having said that, I think we need a combination of monetary and fiscal policy.

“My president is very keen to at least have a forum where political bodies can be engaged in discussing monetary policy. On fiscal policy, we have in the stability pact that applies to Europeans, buffers.

“Those buffers allow us to not exceed 3 percent deficit. Clearly some member states will be in a better position - Germany will have more room to maneuver, France will have a little less room to maneuver.

“All in all am I terribly pessimistic? No.”


In the case of India the drivers of economic growth are investment and economic consumption. (There are) very high savings, demand for credit is very high, projects in the pipeline are moving forward — there is no slowdown.

“My view is India’s economy will continue to cruise along at 8-8.5 percent in 2008, we will continue to grow at a fast rate.

“A two or three quarter slowdown in the United States will not have a major impact in India.”

For full coverage, blogs and TV from Davos see: here

Reporting by Natsuko Waki, Mike Dolan and Clara Ferrira-Marques; Editing by xx

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