Could we be facing another Great Depression?

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The economy needs to turn around fastInternational economists are warning that unless the U.S. economy sees signs of a turnaround in the near future, the country could be headed for a deeper recession – or even a depression.

The IMF’s top economist, Olivier Blanchard, told French newspaper Le Monde that the next few months are likely to be "very bad."

"It is imperative to stifle this loss of confidence, to restart household consumption, if we want to prevent this recession developing into a Great Depression," he said, according to Agence France Presse.

His comments come after the U.S. government announced that the country’s economy contracted by 0.5 percent in the third quarter.

If the GDP contracts during the fourth quarter as well, it will embody the traditional definition of a recession – two consecutive quarters of negative growth. There is little doubt that this criteria will be met.

During the third quarter of 2008, personal consumption fell by 3.8 percent, while exports and imports stalled and the construction industry suffered losses.

Gross domestic purchases, which reflect purchases made by Americans for all goods and services regardless of where they were made, also decreased by 1.5 percent, according to the US Bureau of Economic Analysis.
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