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1/26/2003

Little good news at world economic summit

The Associated Press

DAVOS, Switzerland — Global economic and political leaders who gathered for their annual mountaintop meeting last week heard a depressing prognosis for the world economy, and blamed the situation on one country: the United States.

“Sadly, it’s a U.S. story,” said Stephen Roach, chief economist at Morgan Stanley in New York, one of five prominent forecasters on a panel to set the scene on the world economy.

With the U.S. economy “still mired in a post-bubble hangover,” he said, “the world is going to remain a sluggish place.”

The gloomy view reflected the mood at the World Economic Forum, back in the Swiss Alpine resort of Davos after it was held last year in New York in a show of post-Sept. 11 solidarity.

A year of corporate scandals, executive sackings and turbulent markets, along with the threat of terrorism and fears of war in Iraq, cast a pall over this year’s meeting, whose motto is “Building Trust.”

About 2,300 participants are expected, down from 3,200 two years ago. About two dozens heads of state signed up, down from more than 30 in 2001. Organizers even called off Saturday’s traditional black-tie evening gala.

Economists at one session warned that the threat of war was also big unknown threatening economic recovery in 2003.