US Federal Reserve chairman Mr Alan Greenspan said today he is confident the United States will "recover and prosper" despite a severe short-term economic impact from last week's terrorist attacks.
"The terrorism of September 11th will, doubtless, have significant effects on the US economy over the short term," Mr Greenspan said in remarks prepared today for delivery to the US Senate Banking Committee.
"But as we struggle to make sense of our profound loss and its immediate consequences for the economy, we must not lose sight of our longer-run prospects, which have not been significantly diminished by these terrible events."
Mr Greenspan said the US economy over the past few decades "has become increasingly resilient to shocks. Deregulated financial markets, far more flexible labor markets and more recently, the major advances in information technology, have enhanced our ability to absorb disruptions and recover."
The Fed chief said the terrorist strikes on New York and Washington did disrupt the economy and created a high degree of uncertainty that will be reflected in economic data.
"But the foundations of our free society remain sound, and I am confident that we will recover and prosper as we have in the past." He added.
Mr Greenspan said the response from the global community has created a new atmosphere and boosted prospects for an agreement on a new round of multilateral trade negotiations.
"A successful round (of trade talks) would not only significantly enhance world economic growth but also answer terrorism with a firm reaffirmation of our commitment to open and free societies," he said.
Mr Greenspan said before the September 11 attacks, the US economy was showing "tentative, but on the whole, encouraging" signs toward recovery from its downturn.
"Consumer spending moved higher in August and appeared to be reasonably well maintained in the first part of September," he noted.
AFP