rice stresses resilience of us economy

From correspondents in Davos | January 24, 2008
US Secretary of State Condoleezza Rice said overnight the US economy was "resilient" and its structure sound, addressing fears about a possible looming recession.

”I know that many are worried by the recent fluctuations in US financial markets, and by concerns about the US economy,'' she told delegates in Davos at the opening ceremony of the World Economic Forum.

”The US economy is resilient, its structure is sound, and its long-term economic fundamentals are healthy,'' she said.

World stock markets have plunged this week on fears that a US recession linked to the subprime crisis and tightening credit conditions will drag global growth down.

”Our economy will remain a leading engine of global economic growth,'' said Ms Rice.

”So we should have confidence in the underlying strength of the global economy.''

On Tuesday, the US Federal Reserve announced an aggressive 75-basis-point cut in borrowing costs after a slew of data pointed to a slowdown in the world's biggest economy.

It was the first time the Fed had changed interest rates outside its regular rate-setting meetings since 2001, days after the September 11 attacks. It was also its deepest cut since 1984.

The action came after US President George W. Bush announced a stimulus package last week that many analysts saw as confirmation of the recession danger.

In recent years the annual Davos meeting in the Swiss ski resort has been against a backdrop of bumper corporate profits, strong economic growth and tame inflation.

But as the 38th World Economic Forum opened overnight, the mood was gloomy and the first day of debates were littered with mentions of recession, sliding stock markets and the subprime mortgage crisis