Do not expect a recovery till 2011, Mr Paul Donovan, global economist at Swiss investment bank UBS has warned.

He believes there is still a lot of deleveraging - the shedding of debt - to be done by banks, consumers and companies before economic growth resumes.

Depending on exactly how much deleveraging is required, and how willing banks are to lend out money, the downturn may even last five years, he said.

Now that coordinated bank bailouts appear to have 'solved the banking crisis' he said central banks need to cut interest rates further to boost anaemic growth.

He expects the US Federal Reserve to cut the US benchmarket rate to 1 per cent between now and December. He also expects cuts by the Bank of England and the European Central Bank.

Read the full story in Thursday's edition of The Straits Times.