THE chief executive of GlaxoSmithKline, the world's second-largest drug maker by revenue, said the global economy could remain sluggish for some time as tight credit markets and cautious corporate investment hampers growth.

Mr Andrew Witty, Glaxo's CEO, said banks remain leery of lending and companies are still 'risk averse' as the impact of a credit crisis that began in the US sub-prime mortgage sector in 2007 undermines investment.

'I still see significant economic contraction,' Mr Witty said on Tuesday at a news conference in Singapore, where Glaxo was opening a vaccine plant. 'We're working on the basis that this could be a relatively anemic economic backdrop for a while.'

Stock markets have surged around the world since early March on expectations the worst of the global downturn is over.

'I'm not yet confident that anything is very different today than it was three months ago,' Mr Witty said. 'I think we're still seeing an environment very similar to the one we saw in the second half of last year.'

Glaxo said in April its first quarter profit fell 13 per cent on weak US pharmaceutical sales. -- AP