WASHINGTON: Federal Reserve chairman Ben Bernanke said Tuesday he sees a “reasonable prospect” for an end to the deep US recession this year if he numerous rescue and stimulus programs work as intended.

In his semiannual economic address to Congress, Bernanke was guarded in his outlook and noted that the US economy is in the midst of a “severe contraction” that has continued into the first quarter of 2009.

Despite numerous downside risks to the outlook, Bernanke said a variety of initiatives appear to be steadying jittery financial markets, and if these work as intended, the recession could end in 2009.

“It is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets,” he said.

“If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.”

But he argued that Fed policymakers believe “that a full recovery of the economy from the current recession is likely to take more than two or three years.”

source: economictimes

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